KMG Update on the situation at Uzenmunaigas
KazMunaiGaz Exploration Production (“KMG EP” or “the Company”) provides the following update on the situation at the Uzenmunaigaz (UMG) production facility in Zhanaozen (Mangystau region).
As a result of the industrial action that commenced on 26 May 2011 the total loss of oil production to date amounts to 150 thousand tonnes.
The Company now believes that the annual production from the Uzen field will not reach the target level and will be lower by at least 600 thousand tonnes. KMG EP also expects that with likely small offsets from other producing assets the consolidated volume of production, including shares in the JV Kazgermunai LLP, CCEL (JSC Karazhanbasmunai), PetroKazakhstan Inc and NBK LLP in 2011 will be approximately 4% lower than previously planned 13.5 million tonnes. This estimate of the impact of the industrial action on the production level may change depending on how long the protest action will last and how quickly stable production at UMG is restored.
The Company is taking all necessary measures to maintain continuity of oil production and safety at the operational sites of UMG. KMG EP’s management continues its dialogue with the participants of the protest, stressing its readiness to consider the labour dispute under the procedures established by the law, but only after a complete cessation of illegal protests and the resumption of work by all employees of UMG without exception. The company also notes a significant reduction in the number of protesters – from the peak of 2,500 to 650.
The CEO of KMG EP, Askar Balzhanov, said: “As KMG EP continues with its strategy, the contribution from recently acquired assets and large-scale exploration activity becomes more tangible. The role of the mature fields, Uzen and Emba, will naturally diminish. However, we have full intention to continue maximizing their potential and to strengthen relations with the workforce throughout the Company.”