Exploration Extraction KazMunaiGas reported on its activities in 2004

/Exploration Extraction KazMunaiGas, March 31, 05/ - On March 31 of the currebt year management of Exploration Extraction KazMunaiGas JSC hosted a news conference of company's activities in 2004. In 12 months of 2004 EE KazMunaiGas JSC produced 8 892.8 th tons of crude and 26.1 th tons of condensate (103% to the planned figure) and 113% to the corresponding level of the last year. Increase in production relative to last year level totaled 1 m tons. Incremental increase was made possible largely thanks to intensive crude production methods implementation and application of new technologies. In 2004 881 well operations were held aimed at increasing the oil recovery effectiveness of layer with the implementation of new technologies, additional production totaled 788 th tons of oil. Production plan of the Company for 2005 allows for production of 9.3 m tons of crude. In 2004 the volume of oil delivery to the domestic market totaled 2,994 th tons, plan overproduction - by 22.7%, the volume of oil refinery increased in comparison with 2003 and totaled 2,900 th tons, plan overproduction totaled 21.3%. The Company is the main revenue source for NC KazMunaiGas JSC and the largest taxpayer in the republic. For 2004 the Company paid KZT63.3 bn in form of taxes and other compulsory payments and collections to the budget, which is KZT17.516 higher than planned amount. At the expense of additional oil sales volume and surging oil price, the revenue part from main activities totaled KZT245.3 bn versus KZT193.4 bn. Relative to previous year revenues grew by KZT64.203 m. In 2004 198 new wells were introduced into exploitation, 129 wells from nonproducing condition, 109 wells were transferred into mechanic means, and 156 into electric skewed engine, 1 390 wells were capitally repaid and at 15 744 underground repairment was performed. In 2005 it is planned: to finish the construction of 229 new exploitation wells, 8 exploration wells, 2 water supply wells; to restore 55 nonfunctioning wells and to conduct capital repairment of 1451 wells. Exploration EE KazMunaiGas JSC with the purpose of resource base extension in 2004 perofromed 2D seismic research in a volume of 500 running meters at perspective arear in Atyrau oblast (block P-9). As a result of interpretation of received seismic data and works done earlier a number of perspective structures was identified and prepared at this territory, which will then be explored additionally. Exploration program at this area is planned for 6 years and allows for drilling of at least 17 exploration wells. 3d seismic research at Botakhan, Zabureniye and Akingen were also performed. Received materials are at stage of interpretation but preliminary results point at possible deposit increase at these fields. In 2005 the Company will increase the volume of explorations with the purpose of resource base extension. For 205 it is planned to perform seismic works at P-9 area in volume of 680 running meters and to drill 3 exploration wells. Same year reinterpretation of 1,000 running meters of old seismic materials is planned. In current year it is planned to complete the drilling of a well at Tepke structure. Currently works are done in respect of assemblage of a drilling facility. In case of positive result, drilling of wells at this structure will be continued. Petrochemicals On December 29, 2004 the Company was given a controlling stake in Atyrau ORP LLP (86.7%) in exchange for shares of EE KazMunaiGas JSC. Also in December 2004 EE KazMunaiGas JSC become a co-owner of property complex of Atyrau plant Polypropylene and Aktau plastic plant. Abovementioned enterprises are considered as cites for creation of petrochemicals technoparks. EE KazMunaiGas JSC jointly with Ministry of minerals and mineral resources of the RK and NC KazMunaiGas JSC takes part in development of the Concept of Creation of special economic zone (SEZ) "National industrial petrochemical technopark in Atyrau oblast". In December of 2004 the package of tender documentation was prepared and bids for the development of tentative technical economic justification of the integrated petrochemical complex creation. Capital markets tap On December 29, 2004 shares of EE KazMunaiGas JSC were included in "A" listing of Kazakhstan Stock Exchange. Listing its shares with Kazakhstan Stock Exchange proves company's commitment to a further development of Kazakh securities market as well as of improvement in corporate governance standards and transparency enhancement. Collaboration EE KazMunaiGas JSC follows a policy of active collaboration. New relationships were established and fields of cooperation with over 33 international companies as well as international ministries were defined. The most important event in this filed were September ratification of a Memorandum of mutual understanding between EE KazMunaiGas JSC and TengizChevroil LLP which regulates the issues of mutual support and understanding in area of employee training, technical safety and environment protection, professional development. At current stage similar draft documents are being prepared for the conclusion with Agip and Karachaganak Petroleum Operating. On November 19, 2004 at annual shareholders meeting of Kazakhstan Petroleum Association it was decided to accept EE KazMunaiGas JSC as voting member of KPA that includes 45 Kazakhstan and foreign companies from 20 countries over the world. Development and implementation of an integrated management system Under the program of realization of decree of the President and the Government of Kazakhstan on national system of standardization and certification, and Kazakhstan enterprises shift to international ISO standards, EE KazMunaiGas JSC developed a Plan for introduction of an integrated management system acceding to international standards - ISO 9001 (quality control system); ISO 14001 (environment management system); OHSAS 18001 (safety and healthcare management system). Capital construction The main purpose of the Company at realization of a construction program is the furnishing of a new and development of existing oil and gas fields at modern and quality technical level. Thus in 2004 the volume of investment in capital construction totaled KZT8,349 m. This said the volume of spent capital investments rose 1.54 times in comparison with 2003. Major funds with the principal value of KZT8,206 m were introduced to exploitation, which is in comparison with 2003 grew by 26%. A number of major and important objects were introduced, on PF OzenMunaigas - 80 oil and 20 inlet wells, arrangement and modernization of 2A blocks m/r Ozen, PK#1 "Installation on deep de-watering and de-salting of crude at TcPPN", Construction of PC-110/6 kW from UPSV (plato) with VL-110 kW, Service - tcenter on repairment and serving of specialized machinery, on PF Embamunaigas - 84 oil and 18 inlet wells, construction of objects enhancement and reconstruction of electricity supply at fields NGDU Zhaiykmunaigas, HNGDU Prorvamuanigas, m/r Karsak, East. Moldabek completed, 11.2 km of auto routes and dormitories at Kamyshitovoye, Zholamanova, Teren-Uzek and other were built. For 2005 approved plan for capital construction totaled KZT12,675 m with the focus on construction of objects of nonproducing and social designation. Social partnership Company's activities on realization of production projects is of special importance to social infrastructure in Western region of Kazakhstan. Social partnership of EE KazMunaiGas JSC aims to improve the standards of living in oil regions, development of healthcare services and culture. On December 3 2004 EE KazMunaiGas JSC and akimat of Atyrau oblast signed a memorandum on mutual understanding of social infrastructure and low income families of Zhylyoi, Isatai, Makat and Kyzylkogin regions for 2005. On December 23 the Company signed similar document with Zhanaozen akimat with the purpose of improvement and stability of functioning of energy supply systems, educational objects modernization, healthcare and communal purpose. Memorandums on social partnership are in line with legislative norms of Kazakhstan, articles of subsurface usage, that provides for social obligations of the Company. In 2004 wit the help of the Company several important event took place: June session of Foreign Investors Council at Kenderly resort, anniversary of 40 years of Uzen oilfield development and 300 th m ton of oil extraction. EE KazMunaiGas Joint Stock Company created in March 31, 2004 as a result of a merger of Uzenmunaigas JSC and Embamunaigas JSC became a second largest oil&gas company in Kazakhstan on production level and extractable reserves. Exploration Extraction KazMunaiGas JSC operates in Atyrau and mangistau oblasts where it develops 44 oil fields with residual oil reserves estimated at 1.2 bn tones and current extractable deposits of 269 m tons (as of Jan 1, 04). Total number of workers - 16 th employees. [2005-03-31]