Closed JSC "NNK "KAZAKHOIL" (Kazakhstan): brief information

/KASE, May 25, 00/ - Ties description of Closed JSC "NNK "KAZAKHOIL" has been compounded based on the Conclusion of the Kazakhstan stock exchange (KASE) Listing commission. The information is published in connection with inclusion of the Company's bonds in the KASE official list of securities at the "A" category. The closed joint-stock company "National oil and gas Company "KAZAKHOIL" has been created in April, 1997 according to Decree #3878 of the President of Republic of Kazakhstan from March 04, 97 "About creation of the National oil and gas company "KAZAKHOIL" and Decree #410 of the Government from March 24, 97 "About joint-stock company "National oil and gas Company "KAZAKHOIL". "NNK "KAZAKHOIL" is involved in exploring, development, production and processing of hydrocarbons. The Company has obtained the rights to possess, use and manage the state blocks of shares in joint-stock companies and state shares in other companies, and also Kazakhstan's shares in the agreements on partition of production, royalty, rights in other agreements on hydrocarbons prospecting, production and processing. "NNK "KAZAKHOIL" participates in the capital of the many biggest petroleum enterprises of Kazakhstan: its structure includes more than 40 legal persons, in 35 of which the Company possesses 5% of shares or more. The largest from 18 affiliated companies are: JSC "Kazahoil-Emba", JSC "Uzen'munajgaz" and JSC "Atyrau oil refining factory" (JSC "ANPZ"). JSC "Uzenmunajgaz' develops 2 petroleum and 6 gas fields, including Uzen which is the third oil field in Kazakhstan. From a beginning of the exploitation till January 01, 00 268 million tons of petroleum were recovered. The residual geologic and extracted reserves make 789 and 198 million tons accordingly. There are in total 5 537 working wells. Production of crude makes 8 282 tons a day. For financing of the project of the Uzen oil field rehabilitation the Company has obtained a loan of the World Bank of reconstruction and developing to the sum of $109 million, from which $11,70 million are already invested (on January 01, 00). JSC "Kazahoil -Emba" was formed in August, 1999 as a result of amalgamation of joint-stock company "Embamunaigaz" and joint-stock company "Tengizmunaigaz". Now in crude oil production 6 oil and gas producing enterprises are engaged: Zhaikneft, Dossorneft, Makatneft, Kajnarmunaigaz, Kul'saryneft, Prorvaneft, which have in total 1 713 wells and develop 33 oil and gas fields (January 01, 00). The initial geologic reserves were 528.9 million tons and recoverable reserves - 217.1 million tons. 129.1 million tons has been extracted till now and residual recovered reserves of petroleum on January 01, 00 has made 87.9 million tons. Residual gas reserves make 29.9 billion cube meters, reserves of dissolved gas - 5.4 billions cube meters, reserves of condensate - 1.51 million tons. JSC "ANPZ", located in Atyrau, is the oldest of three Kazakhstan's refineries. The factory capacity is 5 million tons of petroleum annually; depth of processing - 59%. During the last 2 years the loading of factory has fallen to 40%. In 1999 JSC "ANPZ" processed only 1.9 million tons of petroleum. With the purpose of increase of quality and magnification of volumes to 4.3 million tons "NNK "KAZAKHOIL" plans to reconstruct the factory at the expense of the credits to the sum of $412 from Japanese bank of international cooperation. Joint ventures Kazakhstan and Chevron Company originally created Ltd (TSHO) in 1993 for development of Tengiz oil field (about 900 million tons of petroleum). Now the participants of the project are: Chevron (50%), Mobil (20%), KAZAKHOIL (25%) and LukArko (5%). Within the last 4 years three quarters of the republican gain of crude oil production were provided by TSHO. The peak of production - 27 million tons annually is planned to be reached by 2010. Due to high quality and modern clearing system, the price of Tengiz petroleum exceeds the average export price of the Kazakhstan petroleum by about 50%. The total recovered reserves of Tengiz and Korolevskoe fields developed by TSHO make about 1 billion tons of petroleum or about 35% of all Kazakhstan's reserves. Besides JSC "Uzenmunaigaz", JSC "Kazahoil -Emba" and TSHO 6 other companies are oil producing, from which "Kazahoil-Telf" and "Embaved'oil" are Company's subsidiaries (NNK "KAZAKHOIL" shares - 69.0% and 52.7% accordingly), "Arman" and "Kazahturkmunai" - joint ventures (shares - 52.7% and 51.0%), "Kazahturkmunai" and "Gjural" - affiliated companies (shares - 40.0% and 37.2%). In 1999 their cumulative oil recovery has made 0.54 million tons, that is by 30% more than in 1998. The greatest growth has been achieved by Kazakhstan-Turkish joint venture "Kazahturkmunai" (growth of crude oil production 3.3 times) and "Karakudukmunai" (growth 5 times). Explored reserves of these 6 companies make about 50 million tons. A large part of the companies' investments has been direct on the prospecting projects. Due to it in the nearest years it is possible to expect an essential gain in the reserves. So volume of the investments of "Kazahturkmunaui" since 1994 till 1999 has made about $300 million, 58% has been directed on exploration works; 2 fields with reserves of 24 million tons were put into exploitation. The major agreements on production partition November 18, 1997 the companies Agip Karachaganak B.V., BG Exploration and Production Limited, Texaco International Petroleum Company, JSC LukOil Petroleum company, Closed JSC "NNK "KAZAKHOIL" and the Government of Republic of Kazakhstan have signed the Final agreement on partition of production from Karachaganak gas and condensate field. The Karachaganak integrated organization ("Contractor") formed by Agip Karachaganak B.V. (32.5%), BG Exploration and Production Limited (32.5%), Texaco International Petroleum Company (20.0%) and LukOil (15.0%) is the operator of the field. According to the agreement 60% of the hydrocarbons extracted belong to the Contractor's share as the compensatory raw material; 5% hydrocarbons are directed on the compensation of expenditure in construction of the KTK pipeline; 35% are distributed between the indicated parties in a following proportion: - before the payback of the project (roughly 2008) Contractor has 80% of this share, Republic of Kazakhstan - 20%; - than, with the project profitability growth, share of Kazakhstan will be step-by-step augmented to 80%. Major changes in the structure of the Company Since November, 1997 Closed JSC "NNK "KAZAKHOIL" carries out monitoring of an international consortium operating the Karachaganak gas and condensate field. The right on part of production (according to agreement mentioned above) belong directly to Republic of Kazakhstan. In March, 1998 half of 50% hare of participation of Kazakhstan in TSHO was sold to the Mobil company. Since that the share of "NNK "KAZAKHOIL" in TSHO makes 25%. On the moment of formation, "NNK "KAZAKHOIL" represented Kazakhstan in the OKIOC consortium, where it possessed 14.3% of the shares. In September, 1998 this share was sold to the companies Philip Petroleum and Impex for $481.5 million, from which $136 millions were given to "NNK "KAZAKHOIL". In May 1999 "NKTK "KazTransOil" was appointed as the representative of Kazakhstan in the project of the Caspian pipeline consortium. "NNK "KAZAKHOIL" has transmitted to "NKTK "KazTransOil" rights on possession and using of the share of Kazakhstan (19%). In August, 1999 JSC "Mangistaumunaigaz" and "Aktobemunaigaz" were removed from the Company's structure (till that the Company possessed 25% and 20.5% of the shares accordingly). Perspective fields The total volume of oil extracting by the all affiliated companies of "NNK "KAZAKHOIL" for the three last years has increased from 19.7 to 21.4 million tons, which is 81% from Kazakhstan's production. Thus the quantity of petroleum which fall to the share of the Company, somewhat decreased due to mentioned changes in the structure. The significant gain in the Company's recovered reserves is expected on the new fields located in the Aktyubinsk oblast - Alibekmola, Kozhasaj and Urihtau. The preliminary explored reserves make 71 million tons of oil and 74 billions cube meter of gas. Total amount of the recovered reserves of petroleum on the fields of all affiliated companies (with allowance for preliminary explored) is about 1 420 billion tons. At present volumes of cumulative recovery (about 16 million tons annually) it could supply production on average during 89 years. The probable resources of the perspective sites, on which the affiliated companies conduct the prospecting works, exceed 1 billion tons. In particular large reserves are expected on the shelf of Caspian See where the "Kazahstankaspishelf" conducts exploration works together with some foreign companies. "NNK "KAZAKHOIL" is the member of the World petroleum congress and a constant participant of the annual international exhibition "Petroleum and gas of Kazakhstan" (KIOGE). It is also member of the Kazakhstan Oil and gas Association (Kazakhstan Petroleum Association, KNA) - an uncommercial organization established with the purposes of collaboration of the oil and gas companies operated in Kazakhstan. Closed JSC "NNK "KAZAKHOIL" has representation in the Moscow. The number of the company's employees on March 30, 00 is 305 persons, including: 298 persons in headquarters and 7 persons in branches.