KazMunayGas E&P asks Kazakh government for help as impact on low oil prices grows

By bne IntelliNews May 4, 2015

KazMunayGas Exploration & Production, an upstream subsidiary of national oil and gas holding company KazMunayGas, has asked the government for help as low oil prices are draining its profits. The company suggested tax breaks and keeping domestic crude oil price at the highest possible level, its CEO Abat Nurseitov has revealed.

The company is holding talks on export duty breaks and is seeking a tax holiday on mineral extraction tax for EmbamunayGas, one of the company’s main production units. The early presidential election that was held on April 26 slowed down the talks but the company hopes to renew negotiations in May.

The company has reported a dramatic 99% drop in its net profit for the first quarter. In January-March, KazMunayGas E&P’s net profit amounted to KZT1.6bn (€8mn), down from KZT123bn reported in the same period of the previous year. Revenues fell by 47% y/y to KZT117bn. The company blamed low oil prices for such a bad result.

The company is also afraid that the Energy Ministry will not accept the price it has set for domestic crude sales, which is KZT23,000 (over $126) per barrel, down by 53% from the same period of last year. Still, Kazakhstan’s blend was trading at $64 per barrel at the last weekend of April.

Despite this adverse development, the company is determined to fulfil its production plan for this year. In the first quarter, output went down by 0.4% y/y to 3.037mn tonnes because of naturally declining production at minor subsidiaries. Despite this, the company’s production is 55,000 tonnes above the plan. The company has closed 200 unprofitable wells to optimise production.

KazMunayGas E&P was created in 2004. It is an upstream arm of state-owned KazMunayGas. The company’s shares are listed on the local stock exchange KASE and its GDRs are traded on the LSE. KazMunayGas E&P is among the three largest oil producers in Kazakhstan. 

Related Articles

Hungarian PM's "proxy" moves into the nuclear industry as Paks tenders approach

Firms controlled by Hungarian oligarch Lorinc Meszaros have purchased a 51% stake in the Hungarian subsidiary of Czech nuclear ... more

CEZ set to place Czech nuclear assets in new unit

Czech state-controlled energy group CEZ is set to place all nuclear-related activities into a new division, local media reported on May 17. The move raises speculation that the company is ... more

TAP suspends work on Albania pipeline after uncovering ancient settlement

Trans Adriatic Pipeline (TAP) AG company, which is in charge of the construction of the TAP gas project, has temporarily suspended works on the pipeline near the Turan village in Korca in the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss