KMG EP Revised 2015 Budget to Base It on $50 per Barrel
Friday 3 April 2015
ASTANA (KazInform) – JSC KazMunaiGas Exploration Production held a regular meeting of the Board of Directors. During the meeting, the Board of Directors approved 2015 budget adjustment and approved the agenda of the Annual General Meeting of shareholders scheduled for May 19. The Board of Directors reviewed the budget for 2015 and approved it on the basis of Brent crude oil average price of $50 per barrel.
The planned volume of production in 2015 of JSC OzenMunaiGas (OMG) is 5.4 mln tons (108,000 barrels per day) and of JSC EmbaMunaiGas (EMG) is 2.8 mln tons (56,000 barrels per day). The total planned production volume of OMG and EMG in 2015 is 8.2 mln tons (164,000 barrels per day) which is 69,000 tons or 1% below the production plan approved in December 2014.
Expected volume of domestic sales in 2015 has been revised downward. It is expected that the obligations of OMG and EMG for the supply of oil to the domestic market in 2015 was 2.3 mln tons (47,000 barrels per day), 1.9 mln tons of which (38,000 barrels per day) will be supplied to Atyrau refinery from OMG resources and 0.4 mln tons (9,000 barrels per day) to Pavlodar Petrochemical Plant from EMG resources. Additional 100,000 tons will be processed in Atyrau refinery for the company’s own needs.
2015 capital expenditures are equalled to KZT 84 bln ($457 mln), which is KZT 30 bln ($164 mln) or 26% lower than the capital investments approved in December 2014.
It is expected that in 2015, at an oil price of $50 per barrel, the company’s free cash flow will be negative.
Board of Directors also reviewed the terms of payment for crude oil export sales. From 1 April 2015 the permissible payment deadlines will be reduced from 90 to 30 days.
Board of Directors also decided to grant financial assistance to OMG in the amount of KZT 37 bln ($200 mln).
KMG EP is among the top three Kazakh oil and gas producers. In 2014 the production volume of the Company, including stakes in LLP JV Kazgermunai, CCEL (JSC Karazhanbasmunai) and Petro Kazakhstan Inc. amounted to 12.3 mln tons (250,000 barrels per day).