/IRBIS, January 9, 2012/ - KazMunayGas EP in the light of shares in the LLPJV "Kazgermunai" (KGM), "Karazhanbasmunai" (CCEL), "PetroKazakhstan Inc" (PKI) in 2011 extracted 12,341 thousand tonnes (of oil 250 thousand barrels per day), which is 944 thousand tons, or 7% less than in 2010, the press service of the company.

Reportedly, the production Branch "Ozenmunaygaz" (OMG) has extracted 5,082 tons (102 thousand barrels per day), which is 884 thousand tons less than last year. "Embamunaygaz" (EMG) has extracted 2,818 tons (57 thousand barrels per day), which is 18 thousand tons more than last year, making the total production volume of OMG and the EMG 7,900 thousand tons (159 thousand barrels per day), which is 866 thousand tons or 10% less than in 2010.

As noted, the results of mining have been adversely affected by the illegal rally, held at OMG in May and August of 2011, as well as outages and restrictions on electric fields in the January-April this year due to adverse weather conditions.

"The company has taken several measures to restore production, thanks to the measures taken to increase the dynamics of observed daily oil production, which as of December 31, is 14.2 tons per day (105 thousand barrels per day)," - the report says.

"The share of Exploration Production "KazMunayGas" in the production of companies CCEL, KGM, and PKI in 2011 amounted to 4,442 tons (91 thousand barrels per day), which is 78 thousand tons, or 2% less compared with the production in 2010, that the plans for data mining joint ventures", - the report stated.

However, as stated, budget of Exploration Production KazMunayGas in 2012, taking into account the price per barrel of Brent crude oil of U.S. $ 80 according to official projections to the Government and NC "KazMunayGas" anticipates capital expenditures of 126.5 billion tenge (U.S. $ 852 million), which is higher than the projected costs for 2011 for the same purpose by 19%.

As noted, growth capital investments primarily due to increased spending on exploration and increase the cost of creating additional service businesses, the goal of which is described below. The company is planning to invest about $ 64 million to continue exploration work on Fedorovskoye block in which the Company owns a 50% share, the account which is based on the equity method of consolidation.

Thus, as noted at the end of 2011 the Company was requested to state agencies to work to create jobs to improve the social situation in Mangistau region. Sharing the view of state bodies, the Board of Directors decided to create two new service companies, shipping and drilling with total staff strength of more than 2000 people who will provide services of EP KazMunayGas and other companies working in Mangistau region.

"According to preliminary estimates, such measures will lead to an increase in operating expenses of 12.3 billion tenge (U.S. $ 83 million) and capital investments by 8.3 billion (U.S. $ 56 million). These costs are included in the budget of 2012 and may be partially offset by additional income from providing services to third parties. The Board shall consult with the Government and the Foundation of SK to the fact that shareholders' interests are properly taken into account", - was stated in the message.

[2012-01-09]