KMG EP 9M2016 Operating Results

Operating results for the first nine months of 2016

Astana, 25 October 2016. JSC KazMunaiGas Exploration Production ("KMG EP" or "Company") announces its operating results for the first nine months of 2016.

Production

Overall, KMG EP, including its stakes in Kazgermunai ("KGM"), CCEL ("Karazhanbasmunai") and PetroKazakhstan Inc. ("PKI"), produced 9,134 thousand tonnes of crude oil (246 kbopd) for the nine months of 2016, which is a 1% decrease over the same period of 2015.

Ozenmunaigas JSC ("OMG") produced 4,181 thousand tonnes (112kbopd), a 2% increase as compared to the same period of 2015. Embamunaigas JSC ("EMG") produced 2,122 thousand tonnes (57kbopd), which is 1% more than it has produced in the same period of 2015. The total volume of oil OMG and EMG produced was 6,303 thousand tonnes (169kbopd), which is a 1% increase compared to production for the same period of 2015.

The Company's share in production from CCEL, KGM, and PKI for the first nine months of 2016 amounted to 2,831 thousand tonnes of crude oil (77kbopd), which is 6% less than in the same period of 2015, mainly because of forecasted decline in production of oil by PKI.

Crude oil supplies and sales of petroleum products

In the first nine months of 2016, the Company's combined sales from OMG and EMG were 6,283 thousand tonnes (166kbopd) including 3,743 thousand tonnes (99kbopd) of oil for export which is 60% from the total sales volume; and 2,540 thousand tonnes (67 kbopd) of oil to the domestic market. Additionally, 4 thousand tonnes of oil products were sold to the domestic market.

In the first nine months of 2016, out of 2,540 thousand tonnes (67 kbopd) of oil supplied by OMG and EMG to the domestic market, 1,981 thousand tonnes (52 kbopd) was supplied to Atyrau Refinery; and 559 thousand tonnes (15 kbopd) was supplied to Pavlodar Petrochemical Plant.

In first quarter of 2016, before the Company switched to independent oil refining scheme, domestic supplies were 830 ktonnes of oil. Between April and September 2016, 1,710 ktonnes of oil was[1] supplied to the domestic market for further refining. 

As per the independent oil refining scheme, sales of petroleum products for the first nine months of 2016 was 1,519 ktonnes of petroleum products. For more details on petroleum product sales, please see Table No.2 below.

The Company's share in the sales from CCEL, KGM, and PKI was 2,769 thousand tonnes of crude oil (75 kbopd), including 1,416 thousand tonnes (37 kbopd) supplied to export markets, or 51% of total sales volume. The domestic sales volume was 1,353 thousand tonnes (38 kbopd).

In the first nine months of 2016 there is a shift in use of production streams: as percentage of total production Export is up from 50% to 56% , domestic supply up from 38% to 43% and Russia Supply (Intergovernmental Agreement) down from 11% to nil%.

Table 1. Production and sales of oil for the nine months of 2016

Table 2. Production and sales of oil for the nine months of 2016

NOTES TO EDITORS

KMG EP is among the top three Kazakh oil producers. The overall production in 2015 was 12.4 million tonnes (251 kbopd) of crude oil, including the Company's share in Kazgermunai, CCEL and PKI. The Company's volume of proved and probable reserves excluding shares in the associates, at the end of 2015 was 193 million tonnes (1,409 mmbbl). The Company's shares are listed on the Kazakhstan Stock Exchange and the GDRs are listed on The London Stock Exchange. The Company raised over US$2bn at its IPO in September 2006.

For further details please contact us at:

KMG EP. Investor Relations (+7 7172 97 5433)

Saken Shoshanov

e-mail: [email protected]

KMG EP. Public Relations (+7 7172 97 7887)

Bakdaulet Tolegen

e-mail: [email protected]

Brunswick Group (+44 207 404 5959)

Carol Cable

e-mail: [email protected]

Bell Pottinger (+44 203 772 2500)

e-mail: [email protected]

Gavin Davis

Henry Lerwill

Forward-looking statements

This document includes statements that are, or may be deemed to be, ''forward-looking statements''. These forward-looking statements can be identified by the use of forward-looking terminology including, but not limited to, the terms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include, but are not limited to, statements regarding the Company's intentions, beliefs and statements of current expectations concerning, amongst other things, the Company's results of operations, financial condition, liquidity, prospects, growth, potential acquisitions, strategies and as to the industries in which the Company operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur. Forward-looking statements are not guarantees of future performance and the actual results of the Company's operations, financial condition and liquidity and the development of the country and the industries in which the Company operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this document. The Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements or industry information set out in this document, whether as a result of new information, future events or otherwise. The Company does not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved.