KMG EP trading update January 2017

PRESS RELEASE

KMG EP trading update January 2017

Astana, 01 March 2017. JSC KazMunaiGas Exploration Production ("KMG EP" or "the Company") announces the following trading update for the month of January 2017.

Crude oil export and supplies to the domestic market

In January 2017, the Company's combined sales from Ozenmunaigas JSC ("OMG") and Embamunaigas JSC ("EMG") were 709 thousand tonnes (165 kbopd) of crude oil, of which 69% or 486 thousand tonnes (113 kbopd) of crude oil were exported and 223 thousand tonnes (52 kbopd) of crude oil were sold to the domestic market.

Out of 223 thousand tonnes (52 kbopd) of crude oil supplied by OMG and EMG to the domestic market, 180 thousand tonnes (42 kbopd) were supplied to the Atyrau Refinery ("ANPZ") and 43 thousand tonnes (10 kbopd) were supplied to the Pavlodar Refinery ("PNHZ") for further refining as per the independent oil processing scheme.

The share of domestic supplies from the resources of OMG and EMG decreased to 31% in January 2017 as compared to 41% in 2016. As previously reported, it is expected that the share of domestic supplies in 2017 will be 2.9 million tonnes of oil (57 kbopd) or around 33% of the total sales.

Net revenue from refined oil products

According to preliminary data, net revenue achieved from the sale of refined oil products (net of all processing and marketing costs1) in January 2017 was 58,409 Tenge per tonne at ANPZ and 55,733 Tenge per tonne at PNHZ. This is compared with net revenue of 42,366 Tenge per tonne at ANPZ and 51,743 Tenge per tonne at PNHZ achieved from the sale of refined oil products in April-December 2016.

On January 1, 2017 the Company ceased using JSC KazMunaiGas - Refining & Marketing ("KMG RM") as its sales agent and started marketing refined products on its own account2.

Net cash

The net cash position3 at 31 January 2017 was 1,163bn Tenge (US$3.6bn4), representing a US$72m increase over the net cash position as of 31 December 2016. Approximately 97% of cash, cash equivalents and other financial assets were denominated in US Dollars and other foreign currencies, with the remainder denominated in Tenge.

Free cash flow generated in January 2017

According to preliminary data, the Company was cash flow positive over the month of January 2017.

Notes to Editors

KMG EP is among the top three Kazakh oil producers based on the 2016 results. The overall production in 2016 was 12.2 million tonnes (245 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 Shoshanove-mail: [email protected] 

KMG EP. Public Relations (+7 7172 97 79 08)Bakdaulet Tolegene-mail: [email protected]

Bell Pottinger (+44 203 772 2500)

Henry Lerwill

e-mail: [email protected]

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.