KazMunaiGas: Changes Board and Decreases Capital Expenditure

JSC KazMunaiGas Exploration Production held an Extraordinary General Meeting of shareholders on July 09, 2013. At the meeting a member of the Company’s Board of Directors, Lyazzat Kiinov, has resigned and Daniyar Berlibayev, First Deputy Chairman of the Managing Board for Corporate Development of National Company KazMunaiGas was appointed a new member of the Company’s Board of Directors for the whole term.

On July 10, 2013 the Board elected Daniyar Berlibayev as the Chairman of the Board of Directors of KMG EP.
KMG EP’s Board of Directors approved the revised budget for 2013. According to the revised budget capital expenditure for 2013 is expected to be 168bn tenge (US$1,121m)1, which is 17bn tenge (US$114m) less compared to 185 bn tenge (US$1,235m) approved in December 2012.

The decrease in capital expenditure is related among other factors to lower exploration drilling by 11 bn tenge (US$74m). The decline in exploration drilling expenditures is due to a change of the accounting methodology of LLP “Karpovskii Severnyi”2 (7bn tenge or US$49m) and to revision of schedule and targets of the drilling programme by 4bn tenge (US$25m).
Also the plan on implementation of the modernization program has been revised downwards by 7 bn tenge (US$47m). The decline in modernization program expenditures is largely due to the postponement of construction of some projects for later years.

According to the revised budget the development drilling expenses will be higher by 1bn tenge (US$8m) due to the drilling of additional 5 directional wells and 6 development wells at Embamunaigas JSC.

These measures are aimed to ensure sustainable use of funds based on the current economic and operational indicators.