Kazakh KazMunayGas suffers losses due to oil prices drop
BAKU, Azerbaijan. May 4
By Nargiz Sadikhova - Trend:
Kazakhstan’s KazMunayGas (KMG) national oil and gas company has suffered losses due to decline in oil prices, Chief Financial Officer of KMG Dauren Karabayev said, Trend reports with reference to Kazakh media.
He said that decrease of oil prices was more significant than in 2014 and in 2015.
“Currently it’s premature and difficult to make any forecasts regarding the future, but the current situation will definitely affect our financial performance. A number of our subsidiaries, joint ventures and oil refineries showed losses in 1Q2020. But the oil transportation and gas sectors are less affected by oil prices and therefore are in a better situation,” Karabayev said.
Karabayev also said that the company is expecting significant decrease in dividend payments in 2020 by the company’s joint ventures.
“Overall, we are expecting that company’s free cash flow will be negative in 2020, and most likely the company will have to partially use available liquidity reserve in order to maintain activity at our subsidiaries,” he said.
He also noted that the break-even oil price for KMG ventures varies from $10 to $36 for its oil-producing subsidiaries.
“Now we are working to decrease the break-even price by further expenditures decrease,” Karabayev said.
KMG is Kazakhstan's operator for exploration, production, refining and transportation of hydrocarbons, representing the state interests in the oil and gas industry of Kazakhstan.
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