KazMunaiGas Raised Oil Production in 2006
JSC KazMunaiGas Exploration Production (KMG EP) on Thursday its preliminary operating results for the previous year. In 2006 the company produced 9,551 thousand tonnes of oil and gas condensate---186,000 tonnes more than in 2005.
In 2006 the company supplied 9,419 thousand tonnes of crude oil through the system of oil-trunk pipelines, which is 2.2% more than in 2005, including exports of 6,876 thousand tonnes of oil, a 6.1% increase year on year.
Commenting on the production results for 2006, Askar Balzhanov, Chief Executive Officer of KMG EP, said: "We are satisfied with the production performance in the year 2006. Incremental oil production has been achieved primarily due to drilling of new wells, implementation of new methods of oil recovery and reduction of idle well stock."
KMG EP also announced changes to one of its subsoil use contracts. According to the amended contract for the Uzen and Karamandybas fields, the company will be contributing up to 900 million Tenge per year to social infrastructure programs in the Mangistau region. Previously, such contributions were made outside the framework of the contract on the basis of separate agreements with the local authorities.
The amended contract also introduced changes to and clarifications of a number of aspects of the contract, including the royalties, excess profit tax (EPT) and certain other taxes payable in respect of it. In particular, the royalty rate has been increased from 3% to 3.5%, the application of EPT has been clarified and the maximum rate of EPT payable under the contract has been reduced and brought into line with that applicable to most of the other contracts held by the company. The modified EPT rates will be applied retrospectively from the inception of the subsoil agreements.
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