Baku, Azerbaijan, Feb. 20
By Elena Kosolapova – Trend:
The net profit of Kazakh KazMunaiGas Exploration Production company (KMG EP) decreased to 132 billion tenges ($385 million) compared with 244 billion tenges ($1.09 billion) in 2015, the company said its consolidated financial statement for 2016.
“The decrease in net profit is largely due to a foreign exchange gain of 449 billion tenges ($2.02 billion) in 2015,” the company said.
Net profit excluding this foreign exchange gain increased in 2016, primarily as a result of the 37 percent increase in revenue, as well as lower tax accruals related to positive rulings on tax issues.
The company’s revenue in 2016 was 727 billion tenges ($2.13 billion), which is 37 percent more compared to 2015. This increase is the result of the company’s switch to the new processing scheme, as well as the 54 percent increase in the average tenge – US dollar exchange rate, which was partially offset by a 17 percent decrease in the Brent price.
Production expenses in 2016 were 275 billion tenges ($804 million), up by 22 percent compared to 2015. This was mainly due to additional expenses related to the new processing scheme starting from April 2016 in the amount of 49 billion tenges ($142 million) in April-December 2016, as well as higher repair and maintenance, and energy expenses, partially offset by a change in the estimate of environmental remediation and asset retirement obligation in 4Q2016 and 1 percent reduction in employee benefit expenses.
Repair and maintenance expenses were up due to an increased hydrofracturing of wells. Energy expenses are up due to the increase in tariffs of energy suppliers.
Capital expenditure in 2016 totaled 115 billion tenges ($337 million), up by 17 percent compared to 2015. This was primarily due to an increase of expenses for construction of a gas treatment unit (GTU) for the Prorva group of fields and additional capital expenditures directed towards exploration drilling at Embamunaigas, which is 100-percent subsidiary of KMG EP. This was partially offset by a reduction in volumes and costs of production drilling at Ozenmunaigas owned by KMG EP and a 15 percent discount obtained from the drilling service contractor.
In 2016, KMG EP received a loss of 12.6 billion tenges ($37 million) from its shares in associate and joint ventures, compared to a loss of 20.1 billion tenges ($90 million) in 2015.
KMG EP received 4.3 billion tenges ($13 million) of income from its 50 percent share in Kazgermunai in 2016. A loss of 15.3 billion tenges ($45 million) was received from KMG EP’s 33 percent share in PetroKazakhstan Inc. Moreover KMG EP had 34.3 billion tenges ($103 million) as a receivable from Karazhanbasmunai (CCEL), a jointly controlled entity with CITIC Resources Holdings Limited as of 31 December 2016.
KMG EP is among the top three Kazakh oil producers based on the 2016 results. The overall production in 2016 was 12.2 million tons of oil, including the company’s shares in joint ventures.
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