Kazakhstan’s large oil producer sees dip in net profits
Baku, Azerbaijan, Nov.6
By Elena Kosolapova - Trend:
Kazakhstan's KazMunaiGas Exploration Production's (KMG EP) net profits from Jan. to Sept. 2015 was 138 billion tenge (US$703 million) compared to 242 billion tenge ($1.357 billion) earned in the same period last year, the company announced in a statement.
The decline in net profit was largely due to reduced revenue after the oil price decline, which was partially offset by a gain related to the increase in the exchange rate for the tenge versus the US dollar, according to the statement.
The revenues of KMG EP in the first nine months of 2015 amounted to 349 billion tenge ($1.783 billion), 49 percent lower than the amount earned in the same period in 2014.
The lower revenue was the result of a 48-percent decline in the Brent oil price and a 50-percent decline in the average domestic realized price from 48,000 tenge per ton in the first nine months of 2014 to 23,800 tenge per ton in the same period in 2015.
Net cash outflow from KMG EP's operating activities in the first nine months of 2015 was 14.9 billion tenge ($76 million) compared to the 250 billion tenge ($1.404 billion) inflow in the same period in 2014, mainly due to the decrease in revenues.
This is while, during the reporting period, the company recognized a foreign exchange gain of 262 billion tenge ($1.336 billion).
The company's production expenses in the first nine months of 2015 were 160 billion tenge ($817 million), an 11-percent increase compared to the same period in 2014, mainly due to increased employee benefit expenses related to production personnel.
KMG EP's capital expenditure in the first nine months of 2015 was 75 billion tenge ($384 million), or 18 percent lower than that in the same period last year, mainly due to lower investments in maintenance capital expenditure and a decrease in drilling activity.
Furthermore, 238 wells were drilled at OzenMunaiGas and EmbaMunaiGas compared to 248 wells in the same period in 2014.
KMG EP is among the top 3 companies producing the largest volumes of oil in Kazakhstan.
Follow the author on Twitter: @E_Kosolapova