OREANDA-NEWS. JSC KazMunaiGas Exploration Production (“KMG EP” or “the Company”) announces its operating results for the first half of 2014, an update on the modernization programme, details of a memorandum signed with the environmental agency, information on the start of trial production on Liman block and an update on the decision on the sale of shares in Kazakh Oil and Gas Institute (KOGI).

In the first half of 2014, the Company's consolidated production, including its stakes in Kazgermunai (KGM), CCEL (CCEL) and PetroKazakhstan Inc. (PKI), was 6,106 thousand tonnes (250 kbopd), which is a 0.2% increase compared with the same period of 2013.

The Company remains committed to its 2014 production plan of 8,170 thousand tonnes (165 kbopd) for Ozenmunaigas JSC (OMG) and Embamunaigas JSC (EMG).

As part of the modernization programme, two units have been put into operation.

Trial Production at the Novobogat SE field (suprasalt) of the Liman Block has been initiated.

A Memorandum of Cooperation to support environmental measures was signed.

The Company has decided to sell its shares in the Kazakh Oil and Gas Institute.

Abat Nurseitov, KMG EP Chief Executive, says: “KMG EP's results for the first six months of 2014 are in line with our expectations. The modernization programme is in progress. We have also focused our efforts on supporting the environment and a Memorandum of Cooperation for the clean-up of historical contamination and accumulated wastes has been signed between governmental authorities and National Company KazMunayGas. We are also pleased to announce that we are very close to resolving an issue with gas utilization at our two oil and gas production units in Atyrau; and that we have launched a project which will decontaminate radioactive tubing in Mangystau Province”.

Operating activity in the first half of 2014

KMG EP produced 6,106 thousand tonnes of crude oil (250kbopd), including the Company's stakes in KGM, CCEL and PKI, which is a 0.2% increase compared with the same period of 2013.

Ozenmunaigas JSC and Embamunaigas JSC

OMG produced 2,627 thousand tonnes (107kbopd) during the period, which is 88 thousand tonnes (3.6 kbopd) or 3% more than in the same period of 2013. EMG produced 1,391 thousand tonnes (57kbopd), which is similar to the same period of 2013. The volume of oil produced at OMG and EMG in the first six months of 2014 totaled 4,018 thousand tonnes (163kbopd), which is a 2% increase versus the same period of 2013.

As of July 2014 the level of daily oil production is in line with the Company's expectations. The Company remains committed to the approved production plan of 8,170 thousand tonnes for 2014, including 5,350 thousand tonnes at OMG and 2,820 thousand tonnes at EMG.

In the first six months of 2014 the Company's export and domestic sales from OMG and EMG were 2,938 thousand tonnes (117kbopd) and 1,010 thousand tonnes (40kbopd), respectively. The Company expects the domestic sales from OMG and EMG to be 1.9 million tonnes for 2014.

Joint Ventures

The Company's share in the production from KGM, CCEL and PKI for the first six months of 2014 amounted to 2,088 thousand tonnes of crude oil (86kbopd) which is 3% less compared with the same period in 2013 and which is in line with the production plan.

The Company's share in the sales from KGM, CCEL and PKI was 2,086 thousand tonnes of crude oil (86kbopd), including 1,084 thousand tonnes (44kbopd) or 51% supplied to export markets.