KazMunayGas National Company JSC (KMG) announced operating and financial results for the first half of 2019. KMG’s net profit for the reporting period increased by 73% compared to the same period of 2018.
According to the data published on the Company’s website, KMG’s revenues for the first half of 2019exceeded 3.4 trillion tenge, or more than $8.9 billion, which is 1.4% higher than in the same period last year.
“The main positive effect on the revenue dynamics came from an increase in gas export sales and tengedepreciation against US dollar,” the Companyreports.
Export of Kazakhstani gas to China increased by almost 47%, amounting to $896 million.
At the same time, the cost of the Company’sproductsexceeded $6.6 billion, which is 3.9% lower compared to the first half of 2018.
“The decrease was caused by a fall in the average price of Brent crude oil, which is partially offset by an increase in the volume of purchased gas and tenge depreciation against US dollar,” the Company explains.
The total cost of KMG International (KMG I) for the purchase of oil decreased by 49.3% and amounted to $530 million. The costs of KazTransGas JSC for the purchase of gas increased by 23.1% to $519 million.
In general, the Company’s net profit in the reporting period increased by 73% compared to the first half of 2018 and amounted to 622 billion tenge, or more than $1.6 billion.
At the same time, taxes and other obligatory payments increased by 16.1%, amounting to 731 billion tenge, or more than $1.9 billion.
The capital expenditures amounted to 167 billion tenge, or $440 million, decreasing by 5.8%, which was caused by “the completion of the modernization of Kazakhstan’s oil refineries”.
KMG’s total debt as of June 30, 2019, decreased by 3.8% compared with the figure as of December 31, 2018, and amounted to almost 4 trillion tenge, or about $10.5 billion.
Production and output
KMG’s oil and gas condensate production output for the first half of 2019 exceeded 11.7 million tons of oil, which is 0.5% lower than the figure for the first half of 2018. Associated and natural gas production increased by almost 1% to 4.1 billion cubic meters.
At the same time, according to the Company, oil production at the Kashagan field for the first half of the year decreased by 7.6%, amounting to about 5.7 million tons of oil, or 250 thousand barrels per day. KMG’s share in the production output amounted to 472 thousand tons of oil and 278 million cubic meters of gas, which is 7.6% and 6.3% lower than in the first half of last year, respectively.
“The decrease in oil production was caused by the regular overhaul of the onshore and offshore complexes with a complete shutdown from April 14 to May 19, 2019,” KMG explains.
Oil production at the Karachaganak field decreased by 5.4%, amounting to 535 thousand tons per KMG’s share. Gas production reached 982 million cubic meters, which is 0.5% lower than in the first half of 2018. According to the Company, “the decrease in oil and condensate and gas production was caused by an increase in the gas factor and water cut in wells.”
KMG’s share in the oil production output at Tengiz exceeded 2.9 million tons, which is 1.5% higher than in the first half of 2018. Gas production output increased by 1.3% and amounted to 1.6 billion cubic meters.
KMG’s share in the output of operating assets (in subsidiaries and joint ventures) decreased by 0.5% to 7.7 million tons.
“The decrease in output of operating assets is mainly due to the production decline rate growth,” the report said.
Meanwhile, in the first half of 2019, KMG sold over 11.6 million tons of oil and gas condensate, including more than 8.2 million tons for export, which is 0.5% higher than last year.
About 3.4 million tons were delivered to the domestic market, including 1.6 million tons of crude oil supplies to refineries for further sale of petroleum products.
The hydrocarbon throughputreached almost 10 million tons, which is 1.7% higher than in the same period last year.
Over 6.6 million tons of oil were processed at Kazakhstani refineries, which is 1.8% more than in the first half of 2018.
About 2.7 million tons of oil were refined at the Atyrau oil refinery, 2.5 million tons at the Pavlodar petrochemical plant, 1.3 million tons at the Shymkent oil refinery (KMG’s share is 50%), and181 thousand tonsat CaspiBitum (KMG’s share is 50%). The throughput of KMGI’s plants exceeded 3.3 million tons.
In the first half of 2019, the output of petroleum products increased by 1.6% and reached 9.3 million tons, including more than 1.5 million tons of gasoline, almost 2 million tons of diesel fuel, 231 thousand tons of jet fuel and over 2.3 million tons of other petroleum productsproduced at Kazakhstan’s refineries.
The output of petroleum products produced at KMGI plants reached 3.2 million tons, including 802 thousand tons of gasoline, more than 1.4 million tons of diesel fuel, 200 thousand tons of jet fuel and 816 thousand tons of other petroleum products.
Oil and gas transportation
The volume of KMG’s oil transportation for the first half of 2019 increased by 5% compared to the same period last year and exceeded 38.9 million tons.
The main increase in the volume of oil transportation came from an increase in the sea transportation provided by NMSK KazmortransflotLLP (KMTF). The company transported over 5.4 million tons of oil, which is 59.3% more than in the same period last year.
The growth was caused byan increase in oil transportation in the Mediterranean and Black Seas thanks to the delivery and transportation agreement concluded between KMTF, KMG and KMG Iat the end of 2018.
The redistribution of oil transportation volumes from the Kenkiyak-Atyrau oil pipeline to the Kenkiyak-Kumkol oil pipeline affected an increase in oil transportation volumes of the Kazakhstan-China Pipeline LLP (KCP) by 4.6% in the amount of 180 thousand tons and a decrease in oil transportation by MunaiTasNWPC LLP(MT) by 17.6% in the amount of 190 thousand tons.
KazTransOil JSC (KTO) showed a decrease in oil transportation volume by 1% in the amount of 229 thousand tons due to a decrease in oil supply to the KTO pipeline system by shippers, which was caused by a decrease in third-party production.
The volume of gas transportation through the KMG’smain gas pipelines decreased by 8.7%, amounting to 50.1 billion cubic meters. The decrease in the total volume of gas transportation through the main gas pipelines was mainly caused by a decrease in gas transit due to redistribution of Russian gas flows by Gazprom PJSC and a decrease in gas supplies from Uzbekistan and Turkmenistan to China.
The increase in export volumes of gas transportation to China offset the decline in export volumes from Tengiz to Russia.