KMG EP is forced to reduce capital expenditures in 2015 by 14%

Dec 24. Kazpravda

KMG EP is forced to reduce capital expenditures in 2015 by 14%For the first nine months of 2014 KMG EP made a profit in the amount of KZT 242 bln, but this income is partly offset by the growth of export customs duties, transport costs and increase of payroll.

In 2015 the JSC “KazMunaiGas Exploration Production” will reduce the capital investment in production by 14%, said General Director of JSC “EP KMG” Abat Nurseitov in the interview to the newspaper “Kazakhstanskaya Pravda”.

“The plan of oil production for 2015 was approved at the meeting of the Board of Directors. We still expect a gradual increase in production of our core assets (“UMG” and “EMG”) by 4% by 2018 (compared with 2013 year). The remaining costs not directly related to the production and the current social obligations have been revised. In particular, the capital expenditures in 2015 are projected at KZT 115 billion. This is 14% lower than our planned expenditures in 2015, according to the business plan, which was approved last year. The cost reduction is planned mainly due to the decrease in investments that do not affect the level of production, reduction of the costs for infrastructure projects, as well as due to the prolongation of some long-term projects of the modernization program,”- he explained.

The head of the company assured that these changes will not affect the salary of oilmen and the company will comply with all the obligations stipulated in the contract.

“All obligations under the collective agreements concluded mainly until 2017, will be fulfilled. These are bonus payments, medical insurance of employees and their families, holidays for children in summer camps,” – said Nurseitov.