KazMunaiGas EP H1 net profit up on high oil prices

Sept 5. Reuters. ALMATY

* Strike consumed part of KMG EP’s H1 net profit
* Expected 2011 underproduction 800,000 T due to strike

KazMunaiGas EP H1 net profit up on high oil pricesKazMunaiGas Exploration Production (KMGq.L) said on Monday it had boosted first-half net profit by 14 percent year on year to 114 billion tenge ($783 million), owing mainly to high oil prices.

Earnings per share amounted to 1,581 tenge ($1.8 per GDR), an increase of 15 percent, KMG EP said in a statement.

“Profit after tax … is mainly explained by an increase in oil price, partly offset by production decline due to the illegal strike, increase in operating taxes, production costs and selling, general and administrative expenses,” it said.

London-listed KazMunaiGas EP, the Central Asian nation’s second-largest oil producer, majority owned by Kazakh state oil and gas firm KazMunaiGas , was hit by a labour dispute over its wages system that dragged on for three months until the end of August.

In the first six months of 2011, KMG EP’s consolidated output was 6.311 million tonnes (which averages out at 258,000 barrels per day), or 216,000 tonnes less than during the same period of 2010.

“Impact on annual production of the company will depend on how quickly the company can restore production at Uzenmunaigas to planned level,” the company said in a reference to its production unit in western Kazakhstan, which had been affected by the strike.

“The expected underproduction compared to the plan for the full year of 2011 is currently estimated at 800,000 tonnes, or 6 percent of the consolidated volume of KMG EP’s production (including the stakes in the jointly controlled entities where production targets are expected to be exceeded),” KMG EP said.