Kazgermunai ready to run at Nuraly field

Visor Capital 

June 19, 2009

KazGerMunai announces development at the Nuraly field complete, and will now be able to begin operations at the installed facilities. We expect some positive share impact for KazMunaiGas EP.

Kazgermunai (KGM), which is 50-50 owned by KazMunaiGas EP (RDGZ KZ) (KMG LI) and PetroKazakhstan (PKZ CN) announced yesterday that it is ready to start operating its new facilities on its Nuraly field, located 150km from Kyzylorda. The equipment was installed by KazStroyService, which added four key facilities: oil processing facilities, booster pumping stations at the North and South sites at the field, and the 32.7km Nuraly-Akshabulak gas pipeline.

The installed oil processing facilities have a capacity to process up to ca 20,000bpd, while planned production of the field is ca 12,800bpd. KGM sent a commission to confirm official approval and acceptance the facilities yesterday, which if it approves the work, will allow operations to begin at the field.

We expect some share impact as a result of the news for KMG EP and PetroKazakhstan. We currently have KazMunaiGas EP under formal research coverage available for our clients. We do not have PetroKazakhstan under formal research coverage.