8th Apr 2008 08:31
JSC KazMunaiGas Exploration Prod08 April 2008 PRESS RELEASE KazMunaiGas Exploration Production may revise its investment plans due to introduction of crude oil export duty Astana, 8 April 2008, As reported by newswires, the Government of Kazakhstan hasmade a decision today to introduce in the near future a crude oil export duty inKazakhstan at the rate of USD109.91 per tonne (approximately USD15 per barrel)in the near future. JSC KazMunaiGas Exploration Production ("KMG EP" or the "Company",) has not yet received detailed official information regarding thetiming and application of the export duty. It is expected that the level of theexport duty will depend on the world crude oil prices. Applicability of the export duty to the Company's individual contracts isexpected to be clarified in the near future. Based on the currently availableinformation the export duty would be applicable to some or all of the exportedcrude oil out of that produced by the Company's production branches Uzenmunaigasand Embamunaigas. The total exports from these two entities amounted to 7.3million tonnes (147 kbopd) in 2007. Kazgermunai and CCEL ("Karazhanbasmunai"),each 50%-owned by KMG EP, have explicit customs stability clauses in theirproduction contracts and are therefore expected to be exempt from the new exportduty at this stage. Should the new export duty of USD109.91 per tonne be applied to the entireexport volumes of Uzenmunaigas and Embamunaigas, the estimated annualisedfinancial impact, before income taxes, would be approximately USD800 million.The export duty is deductible for the purposes of the corporate income tax andexcess profit tax. In light of an increase in the tax burden KMG EP will be undertaking a review ofits production, financial and investment plans. In particular, this review willfocus on the capital investment budget, projected crude oil production levels,estimates of the recoverable reserves as well as plans for new acquisitions. Commenting on the subject, the Company's CEO Mr Askar Balzhanov said: "As aresponsible corporate taxpayer, we shall comply with this governmental decision.With the increased fiscal burden and diminished investment capacity we willcontinue to focus on the most attractive growth opportunities supported by tightcost control." *** - ENDS - Notes to Editors KMG EP is the second largest Kazakh oil producer with over 10.6 mmt (217 kbopd)of crude oil production in 2007 including shares in production of Kazgermunaiand CCEL, and 240 mmt (1.8bn bbl) of proved and probable reserves at the end of2007 (over 2 bn bbl including interests in Kazgermunai and CCEL). The Company'sshares are listed on Kazakh Stock Exchange and the GDRs are listed on LondonStock Exchange. The Company raised over US$2bn as a result of its IPO inSeptember of 2006. For additional information please contact: KMG EP Public Relations (+7 7172 977908, +7 7172 977924) Ms Zukhra Sultanova Email: [email protected] KMG EP Investor Relations (+7 7172 975433) Mr Alexander Gladyshev Email: [email protected] WMC Communications Ltd / Pelham PR (+44 203 178 44 18) Mrs Elena Dobson Email: [email protected] Future related announcements/ statement This document contains announcement that are, or may be deemed to be "futurerelated announcements". These announcements can be identified by the use offuture related terminology, including, but not limited to, the terms "believes","anticipates", "estimates", "intends", "plans", "sets", "will" or"should" or, ineach case, by their matching or comparable terms, or by references to thediscussions, plans, objectives, goals, prospective events or intentions. Thesespecified announcements include all the matters that are not historical facts.These include and are not limited to, the announcements related to the Company's intentions, beliefs, and statements of current expectations concerning,amongst other things, the Company's expectations on operation results, financialcondition, liquidity, prospects, growth, potential acquisitions, strategies andthe industries in which the Company operates. Naturally, the future relatedannouncements bear a risk and uncertainty, since they are related to futureevents and circumstances, which may or may not occur. These announcements arenot guarantees of the Company's future performance and the actual results ofits operations, its liquidity and financial condition; and the development ofthe country and the industries in which the Company operates may differ fromthose described in, or suggested by, the future related announcements containedin this document. The Company does not intend, and does not assume anyobligation, to update or revise any future related announcement or industryinformation set out in this document, whether as a result of new information,future developments or otherwise. The Company does not make any representation,warranty or prediction that the results anticipated by such future relatedannouncements will be achieved. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Kazmunaigaz Exploration