Kazmunaigas Exploration Production Releases Its Annual Report for 2012
Total Page:16
File Type:pdf, Size:1020Kb
KazMunaiGas Exploration Production releases its Annual Report for 2012 Astana, 30 April 2013. JSC KazMunaiGas Exploration Production has published today its Annual Report for 2012*. The report is posted on the Company’s website at www.kmgep.kz. Further, the Company provides below the extracts from its Annual Report in unedited full text as required in accordance with DTR 6.3.5 (1) * Information presented in this annual report is as of April 18, 2013. COMPANY OVERVIEW Mission: KMG EP’s mission is to maximize benefits for the shareholders of the Company, by producing hydrocarbons in an efficient and expedient way, creating long-term economic and social value for the regions in which we operate and providing the development of each employee to reach their potential. Vision: KMG EP – a leading company in the field of hydrocarbon exploration and production in Kazakhstan, among the leaders of oil and gas business in the Caspian region, able to compete globally. KazMunaiGas Exploration Production JSC (“Company” or “KMG EP”) was formed in March 2004 through the merger of JSC Ozenmunaigas (“OMG”) and JSC Embamunaigas (“EMG”). KMG EP is one of the top three leaders in terms of oil production in Kazakhstan. By consolidated production volumes KMG EP controls around 15% of Kazakhstan’s total production and by consolidated proven reserves about 3%. The volume of proved and probable reserves including the Company’s share in Kazgermunai, CCEL and PKI as of 2011 year end were about 285 million tonnes1 (2,083 million barrels). Shares of the Company are listed on the Kazakhstan Stock Exchange (KASE) and global depositary receipts (GDRs) on the London Stock Exchange (LSE). Compared to other companies, KMG EP has unique advantages, which include a relationship with the parent company the National Company KazMunaiGas (“NC KazMunaiGas” or “NC KMG”), through which KMG EP has prioritised access to oil and gas assets and the infrastructure in the territory of Kazakhstan. FINANCIAL AND OPERATIONAL HIGHLIGHTS 2011 2012 Change in % 2P Reserves1, mmbbl 2,083 2,083 0% Production2, kbopd 250 247 -2% Sales2, kbopd 253 244 -4% Export2, kbopd 193 191 -1% Revenue3, US$m 4,919 5,346 9% Net profit4, US$m 1,425 1,079 -24% Capex3, US$m 716 725 1% Net cash5, US$m 4,240 4,637 9% Dividend per share, KZT 1,300 1,619 25% Dividend per GDR, US$ 1.46 1.81 24% Brent, US$/bbl 111 112 0.4% 1 Reserves of OMG, EMG, KGM and CCEL as of 2011 year end and PKI as of 2010 year end. Reserves of OMG, EMG, KGM and PKI according to the reports of Gaffney, Cline & Associates and CCEL according to the report of Miller & Lents, Ltd. 2 Including interest in KGM, CCEL and PKI. 3 Excluding interest in KGM, CCEL and PKI. 4 Including impairment charge in the amount of 75 billion tenge (around US$500m) in 2012. 5 Cash funds, cash equivalents and other financial assets (including NC KMG Bond) less borrowings (including non- recourse debt of KazMunaiGas PKI Finance B.V.). 1 The oil and gas industry of the Republic of Kazakhstan Industry Overview2 Kazakhstan is in the top 15 countries in the world by proven volumes of reserves, having 2% of the global reserves of oil according to the “BP Statistical Review of World Energy”. Oil and gas- rich regions take up 62% of the area of the country and account for 172 oilfields, of which over 80 are in the development stage. Over 90% of oil reserves are located in the 15 largest fields – Tengiz, Kashagan, Karachaganak, Uzen, Zhetibai, Zhanazhol, Khalamkas, Kenkiyak, Karazhanbas, Kumkhol, Severnye Buzachi, Alibekmola, Central and Eastern Prorva, Kenbai, Korolevskoe. The fields are located in the territory of 6 out of the 14 regions of Kazakhstan. These are Aktobe, Atyrau, Western Kazakhstan, Karaganda, Kyzylorda and Mangistau regions. At the same time about 70% of carbon reserves are located in the Western part of Kazakhstan. The most developed oil reserves are in the Atyrau region, as 75 oilfields have been discovered here with commercially exploitable reserves totaling to 930 million tonnes. The largest field of the region is Tengiz with initial extractable reserves of 781 million tonnes. Other fields in the region contain a total of 150 million tonnes. Over half of these reserves are concentrated in two fields: Korolevskoe (55 million tonnes) and Kenbai (31 million tonnes). Within the territory of the Mangistau region over 70 discoveries with commercially extractable oil reserves of 725 million tonnes and 5.6 million tonnes of condensate have been made. Less than half of these fields are currently in production. Most of them are in late stages of development. The greater part of reserves are in the "difficult to extract" category. The largest fields are Uzen, Zhetybai, Kalamkas and Karazhanbas. The largest field in the Western Kazakhstan region is Karachaganak, with extractable reserves of liquid hydrocarbons of about 320 million tonnes and over 450 billion cubic metres of gas. In September 2005 an announcement was made for the discovery of hydrocarbon reserves in the Fedorovskiy block, next to Karachaganak. The Kashaghan field was one of the largest discoveries in the world over the past 40 years and also the largest offshore discovery. The field is located in the Kazakhstan sector of the Caspian Sea and occupies an area of approximately 75x45 km. The reservoir is situated about 4,200 metres below the seabed in the northern part of the Caspian Sea. The development of the Kashaghan field in the harsh maritime conditions of the northern Caspian represents a unique combination of technological complexities and supply chain difficulties. These complexities are related to the provision of a safe working environment and the resolution of technical engineering, logistical and ecological tasks, which make Kashagan one of the largest and most complex energy projects in the world. The Tengiz is a giant oil field, related to the Pre-Caspian oil and gas province of the north Caspian Sea. The oil reservoir lies at a depth of about 4,000 metres. The Tengiz reservoir is 19 km long, and 21 km wide, and is 1.6 km high. Total discovered reserves in drilled and undrilled areas of the Tengiz reservoir are estimated at around 3.1 billion tonnes or 26 billion barrels. 2 Sources of information: Ministry of Oil and Gas of Kazakhstan, Annual Report of JSC "KazMunaiGas - Refining and Marketing", Analytical report of JSC "RFCA Rating Agency", Informational and analytical magazine «KazEnergy» #3 (53), June 2012, «BP Statistical Review of World Energy June 2012». 2 Another promising area from the point of view of oil and gas potential is the Aktobe region. About 25 fields have been identified here. The most significant geological discoveries in this region are the Zhanazhol group of fields with extractable reserves of oil and condensate of 170 million tonnes. In 2005 an announcement was made for a discovery in the central block of the eastern part of the Caspian depression of the new Umit field. The base of the oil production industry of Kyzylorda and Karaganda regions is the Kumkol group of fields - the fifth most important oil and gas province of Kazakhstan. In the summer of 2005, PetroKazakhstan, the oil company operating in this region, announced the finding of commercial oil reserves in the licensed territory of Kolzhan, which lies next to the northern perimeter of the Kyzylkia field. Key indicators According to data provided by the Ministry of Oil and Gas of the Republic of Kazakhstan, confirmed reserves of hydrocarbons on shore and on the sea shelf are estimated at 4.8 billion tonnes or over 35 billion barrels. For comparison, in 2001 the explored balance reserves of oil were only 2.9 billion tonnes. Moreover, the forecast oil reserves in the Kazakhstan sector of the Caspian Sea alone may exceed 17 billion tonnes or 124 billion barrels, according to some experts. Taking into account both the reserves of oil and gas and constantly growing production, in the foreseeable future, Kazakhstan will continue to be at the center of world oil production. According to information from the Ministry of Oil and Gas, production of oil and gas condensate in 2012 amounted to 79.2 million tonnes. This compares with oil production of only 25.9 million tonnes in 1998. Kazakhstan is also one of the top gas producers of the CIS member-states, producing 40.1 billion cubic metres in 2012. In 2012, Kazakhstan’s oil and gas-processing plants refined 14.2 million tonnes of crude oil and produced 2.2 thousand tonnes of LPG. Domestic consumption of natural gas last year was 10.5 billion cubic metres. Kazakhstan exports the bulk of its produced oil via pipelines. In 2012 the volume of oil exported was 68.6 million tonnes, of which 15.4 million tonnes were exporetd through the "Atyrau-Samara" pipeline and, 27.9 million tonnes through the Caspian Pipeline Consortium (CPC) line. A further 10.4 million tonnes was exported to China through the "Atasu-Alashankou" line. The value of crude oil exports amounted to the equivalent of US$56.4 billion, which is 60% of Kazakhstan’s total exports. The volume of gas exports from Kazakhstan in 2012 were 8.8 billion cubic metres. Meanwhile, the volume of international gas transit across the territory of the Kazakhstan last year was 96.5 billion cubic metres. In the future, the volume of production of oil and gas in Kazakhstan will have a tendency to a significant increase. The increase is connected to three main factors, these are the significant growth in capital investment, the expected growth in demand on international markets for hydrocarbons and the fruits of intensive exploration and development work in the hydrocarbon basins of both the Caspian and Aral seas.