Kazakh KMG EP to optimize its expenditures
Baku, Azerbaijan, Feb. 24
By Elena Kosolapova - Trend:
Kazakhstan's KazMunaiGas Exploration Production (KMG EP) oil producing company is working on optimizing its expenditures due to the ongoing decrease in oil prices, the company told Trend.
"Increasing the effectiveness of production will remain the company's priority," KMG EP said.
The company said it has a complex attitude, taking into account all factors for ensuring the profitability of production.
Meanwhile, KMG EP doesn't plan to reduce social expenditures.
"Social payments and the amount of the fixed element of wages for workers of the company's enterprises were maintained at the same level in the budget for 2015 approved by the KMG EP board of directors," the company said.
"All obligations of the company under the collective agreements are fulfilled: medical insurance for employees and their families, children's recreation in health camps, sanatorium-and-spa treatment."
World oil prices have fallen from almost $110 per barrel to below $50 in recent months.
Earlier, the Deputy Minister of Energy of Kazakhstan Uzakbai Karabalin said the average cost price of oil production in the country is about $50 per barrel. Thus, with the current oil prices, production at a number of fields in Kazakhstan can be unprofitable due to high cost price.
The portfolio of KMG EP includes many oil fields where the cost price of production in quite high.
Nevertheless, despite the decrease in oil prices, KMG EP increased its income to $24.996 billion Kazakh tenge (185.05 tenge=$1) in the first nine months of 2014, compared to 93.161 billion tenge in the same period of 2013. The results of the company's operating activities as of 2014 haven't been published yet.
Earlier, the State Revenue Committee of the Ministry of Finance of Kazakhstan told Trend that the owners of low-profit oil fields in Kazakhstan are entitled to pay lower taxes on mining of minerals.
"In the case of unfavorable market conditions, the subsoil user has the right to attribute the fields to the categories of low-profit, highly-viscous, watered, marginal and depleted fields in order to get a lower mining tax rate on the field, group of fields or a part of the field," the committee said.
KMG EP is among the top three oil producers in Kazakhstan as of 2014. The volume of consolidated proven and probable reserve of the KMG EP, given the shares in joint ventures, amounted to 200 million metric tons (1.5 billion barrels) in late 2013. Some 148.8 million metric tons (1.1 billion barrels) of this volume accounted for Ozenmunaigas JSC, Embamunaigas JSC and Ural Oil and Gas LLP.( Rozhkovsky field, Fedorov block).
Edited by CN
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