Update on the situation at Uzenmunaigas

PRESS-RELEASE

Update on the situation at Uzenmunaigas

Astana, 13 July 2011.JSC KazMunaiGas Exploration Production ("KMG EP" or the "Company") provides the following update on thesituation regarding the illegal protest action which is taking place at the production facility   Uzenmunaigas (UMG) in the city of Zhanaozen (Mangystau region).

Currently, about 1225 UMG employees are abstaining from work. The number of working employees has diminished due to the fact that last Saturday, some employees of transportation units refused to go to work. They have formally addressed the Company's management and the city authorities of Zhanaozen requesting that the situation is dealt with: either by satisfying the demands of protesters, should they be valid, or by stopping the protest in accordance with the law. Concerns were also voiced over the safety of those who go to work, as well as their families. Some of the workers who refused to join the illeagal strike said to have received anonymous threats.

Following court decisions, law enforcement agencies have taken the necessary measures to restore order. Despite this, the protestors gathered in the main city square where an illegal rally took place, and continued to make demands for higher wages and reinstatement of all dismissed for absenteeism.

KMG EP reiterates that these requirements are unlawful and unreasonable, and will not be satisfied. The Company stresses that this protest is not a lawful strike. This is confirmed by the decision of the judiciary, and the employer has the right to dismiss the participants of such protests in accordance with the Labour Code for absence from work without good cause. Currently, for this reason, 310 employees of UMG have been made redundant. Some of those dismissed have filed a lawsuit asking for reinstatement. However the city court of Zhanaozen denied the claims to reinstate the workers at the former place of work and of paying for time absent from work, thereby confirming the legitimacy of KMG EP's actions.

The Company is taking all necessary measures to restore the normal regime of operations at UMG. The workers are being addressed by the management, and the Company has organized alternative means of transporting work teams to the field. As a result of ongoing retraining the number of specialized technical units involved in the underground repair of wells has increased.

KMG EP intends to return to the daily production at the level prior the beginning of the strike by the end of September 2011. This will depend on restoring the number of personnel as soon as possible at UMG either by encouraging workers to return to work or as a result of hiring in their place new employees from the region. The Company is currently considering applications submitted for work at UMG.

Notes to editors

KMG EP is among the top three oil producers in Kazakhstan. The Company's 2010 production, including its stakes in LLP «JV «Kazgermunai», CCEL (JSC «Karazhanbasmunai»), «PetroKazakhstan Inc.», and LLP «NBK» amounted to 13.3 million tons (270 thousand barrels a day). As of late 2010, KMG EP's 2P reserves stood at 232 million tons (1.7 billion barrels); or, approximately 2.1 billion barrels including stakes in joint ventures. The Company's stock trades at KASE, and its GDRs are listed at LSE. During its September 2006 IPO, the Company raised in excess of USD 2 billion. The international agency Standard & Poor's confirmed KMG EP's «BB+» credit rating in July 2010 ã. and its «GAMMA-6» corporate governance rating in November of 2010.

Contact information:

JSC KMG EP, Public Relations (+7 7172 97 7600)

Daulet Jumadil

e-mail: [email protected]

JSC KMG EP, Institutional Investors Relations (+7 7172 97 54 33)

Asel Kalieva 

e-mail: ir@kmgep.kz 

Pelham Bell Pottinger (+44 207 861 3147)

Yelena Dobson

å-mail: [email protected]

Forward-Looking Statements

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