Kazakhstan’s KazMunaiGas EP to cut capex by a third
Baku, Azerbaijan, April 3
By Elena Kosolapova - Trend:
Kazakhstan's KazMunaiGas Exploration Production (KMG EP) said the capital expenditure in 2015 is expected to be 84 billion tenges ($457 million), which is 30 billion tenges ($164 million) or 26 percent less than the capital expenditure plan for 2015 approved in December 2014.
"This is 34 percent lower than the actual capital expenditure in 2014," said the company. "The decrease in capital expenditure compared to the earlier approved plan is primarily due to the reduction in development drilling from 257 to 179 wells and the postponement of a few longer-term projects not related to production."
The budget adjustment was carried out at KMG EP's regular board of directors meeting on March 30.
The board of directors approved the revision of the 2015 budget based on an average Brent oil price of $50 per barrel.
"This revised budget requires further work on certain aspects to achieve, at least cash and profit neutrality for 2015. Progress on these aspects will be monitored and reported to the board regularly and the budget will correspondingly evolve," said KMG EP.
It is expected that in 2015, at an oil price of $50 per barrel, the company's free cash flow will be negative.
KMG EP is among the top three Kazakh oil producers. The overall production in 2014 was 12.3 million metric tons (250,000 barrels per day) of crude oil, including the company's share in Kazgermunai, CCEL and PKI.
The company's total consolidated volume of proved and probable reserves including shares in the associates, as of late 2013 was 200 million metric tons (1.5 billion barrels), out of which 148.8 million metric tons (1.1 billion barrels) relates to Ozenmunaigas, Embamunaigas, and Ural Oil and Gas (Rozhkovskoye field, Fyodorovskiy block).
Edited by SI
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