Exploration Production KazMunayGas JSC (Kazakhstan) comments possible changes of tax and customs regime

30.01.08 14:49
/KASE, January 30, 08/ - Exploration Production KazMunayGas JSC (Astana), shares of which are traded in Kazakhstan stock exchange's (KASE) category "A" official list, had spread the press-release in which the following is informed: Quotation begin Astana, January 29, 2008, In connection to many questions, coming to Exploration Production KazMunayGas JSC (EP KMG, Company) relative to possible changes of tax and customs regime, applied to activity of the company in Kazakhstan, EP KMG considers as necessary to make the next explanations. - Currently the Company is charging and paying taxes and other compulsory payments in accordance with acting contracts for entrails using. Nothing compulsory for execution decisions of state bodies, supposing changes of tax and customs regime in relation to EP KMG compared to acting on year 2007, was accepted currently. Along with it, by messages of Mass media, Government considers the possibility of change of compulsory payment regime, paid by oil companies, in particular by introduction of export customs since January 1, 2009; - It is supposed that customs for oil export, in case of their introduction, won't speared on contracts in which there is clause about stability of tax regime. In particular contracts of Kazgermunay and Karazhanbasmunay, in which EP KMG has 50%-ge stakes are supposing the stability of both tax and customs regime. In main contracts of EP KMG, including contract for development of Uzen field, there is no evident clause about stability of customs payments. Nevertheless, application of export customs, changing the balance of economic interest of entrails' user and state to these contracts need additional juridical expertise. Company intends to hold such expertise within nearest time. Total volume of export of oil by EP KMG in year 2007 without considering stakes of Kazgermunay and Karazhanbasmunay, made 7.4 m. tons (148 th. barrels per 24 hours). - Main taxes, paid by EP KMG currently are royalty, corporate income tax, tax for super-profits and number of other taxes, indicated in contracts of entrails user. In accordance with Kazakhstan legislation, tax terms of contracts for oil extracting, signed before January 1, 2004 are stable. It means, that tax terms of such contracts may be changed only by mutual agreement of entrails user and state. All contracts for entrails using, by which currently EP KMG is extracting the oil, and also contracts of Kazgermunay and Karazhanbasmunay were signed before January 1, 2004, so the clause about tax stability is spread on them. - EP KMG intends to undertake needed steps for maintain of constructive dialog with the government, directed for setting of stable and fair level of taxation, letting the Company to develop successfully in interests of all its shareholders. Along with it, determination of taxation level, and also other aspects of regulating of oil field are the prerogative of state and EP KMG will undeviatingly observe all applicable requirements of legislation and regulating bodies. EP KMG JSC, Public relations (+7 7172 977 600, +7 7172 977 924) Zukhra Sultanova e-mail: pr@kmgep.kz EP KMG JSC, Institution investors connection (+7 7172 975 433) Alexander Gladyshev e-mail: ir@kmgep.kz WMC Communications Ltd/Pelham PR (+44 203 178 44 18) Elena Dobson e-mail: Elena.dobson@wmccommunications.com Quotation end Full version of press-release of Exploration Production KazMunayGas JSC is available on KASE's web site at: - http://www.kase.kz/emitters/scan/rdgz/rdgz_reliz_290108k.pdf - in Kazakh language; - http://www.kase.kz/emitters/scan/rdgz/rdgz_reliz_290108.pdf - in Russian language; - http://www.kase.kz/emitters/scan/rdgz/rdgz_reliz_290108e.pdf - in English language. [2008-01-30]