29th Jan 2008 14:07
JSC KazMunaiGas Exploration Prod29 January 2008 Statement regarding tax and customs regime Astana, 29 January 2008, JSC KazMunaiGas Exploration Production ("KMG EP" or the"Company") would like to make the following comments regarding the tax andcustoms regime applying to it in Kazakhstan. 1. Currently the Company is accruing and making tax and other mandatory payments to the Kazakh State in accordance with its existing exploration and production contracts. The Government made no decision so far this year to change any tax and customs terms as compared to those effective in 2007. However, according to press reports, it is considering revising the regime of tax and other mandatory payments for the oil sector and, in particular, the introduction of a crude oil export duty from 1 January, 2009. 2. Should an export duty be introduced, it is understood that it would not be applicable to the contracts which explicitly provide for the stability of its customs terms. In particular, the Company believes that contracts held by Kazgermunai and Karazhanbasmunai (each 50% owned by KMG EP) have customs stability in addition to tax stability. The core assets of KMG EP, including Uzen field, are operated under contractsthat do not explicitly stipulate stability of customs payments. Nevertheless,applicability of export duties that would change the balance of economicinterests between the State and the subsoil user requires legal examination andthe Company intends to seek legal advice on this matter in the near future. KMG EP, excluding its share in Kazgermunai and Karazhanbasmunai, exported 7.4million tonnes (148kbopd) in 2007. 3. The main taxes currently paid by KMG EP include royalties, corporate income tax, excess profit tax and a number of other taxes stipulated in the exploration and production contracts held by the Company. According to Kazakh law, tax terms of the contracts signed before January 1, 2004, are stabilized. The tax terms of such contracts can only be changed by mutual consent of the oil company and the State. All current production of KMG EP as well as Kazgermunai and Karazhanbasmunai is performed based on pre-2004 contracts that enjoy such tax stability. 4. KMG EP intends to take appropriate steps to have a constructive dialogue with the Government in order to work out a stable and fair tax and customs regime that would support the successful development of the Company in the interest of all its stakeholders. However, setting taxation and other aspects of regulation of the oil industry is the State's prerogative and KMG EP will fully comply with all applicable laws and regulations. - END - Notes to Editors KMG EP is the 2nd largest Kazakh oil producer with over 10.6 mmt (217 kbopd) ofcrude oil production in 2007 including shares in production of Kazgermunai andKarahzanbasmunai. The Company's shares are listed on Kazakhstan Stock Exchangeand the GDRs are listed on London Stock Exchange. The Company raisedapproximately US$2bn in its IPO in September of 2006. For further details please contact us at: KMG EP, Public Relations (+7 7172 977 600, +7 7172 977 924) Zukhra Sultanova E-mail: [email protected] KMG EP, Investor Relations (+7 7172 975 433) Alexander Gladyshev E-mail: [email protected] WMC Communications Ltd / Pelham PR (+44 20 3178 4418) Elena Dobson 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 identifiedby the use of forward-looking terminology, including, but not limited to, theterms ''believes'', ''estimates'', ''anticipates'', ''expects'', ''intends'', ''may'', ''target'', ''will'', or ''should'' or, in each case, their negative orother variations or comparable terminology, or by discussions of strategy,plans, objectives, goals, future events or intentions. These forward-lookingstatements include all matters that are not historical facts. They include, butare not limited to, statements regarding the Company's intentions, beliefs andstatements of current expectations concerning, amongst other things, theCompany's results of operations, financial condition, liquidity, prospects,growth, potential acquisitions, strategies and as to the industries in which theCompany operates. By their nature, forward-looking statements involve risk anduncertainty because they relate to future events and circumstances that may ormay not occur. Forward-looking statements are not guarantees of futureperformance and the actual results of the Company's operations, financialcondition and liquidity and the development of the country and the industries inwhich the Company operates may differ materially from those described in, orsuggested by, the forward-looking statements contained in this document. TheCompany does not intend, and does not assume any obligation, to update or reviseany forward-looking statements or industry information set out in this document,whether as a result of new information, future events or otherwise. The Companydoes not make any representation, warranty or prediction that the resultsanticipated by such forward-looking statements will be achieved. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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