KazMunayGas Performance in 2020
JSC NC “KazMunayGas” (KMG) took stock of its performance in 2020 at the extended meeting attended by Akhmetzhan Yessimov, Chairman of the Management Board, NWF Samruk-Kazyna JSC.
During the meeting it was noted that despite all the last year’s challenges, KMG Group retained stability, prevented stopping of production processes, ensured financial stability and continued implementation of priority projects.
“One of the last year’s key goals was to improve financial stability of the entire KazMunayGas group. I believe, we achieved this goal. We did not solicited external loans, did not borrow money from the state, and preserved the resources saved earlier. In the last year, the company generated a positive free cash flow, which allowed us not only to continue reducing the debt, but also to fulfil the obligations to the shareholders on paying the dividends for 2019, which were the largest in the entire history of KazMunayGas”, noted Alik Aidarbayev, Chairman of KMG’s Management Board.
The total of 86 billion tenge of dividends was paid for 2019. Taxes and other company payments for 2020 amounted to 1,2 trillion tenge.
The KMG Group’s debt taking into account the existing guarantees for 2020 was reduced by $472 million including early repayment. Also, debt reduction is observed at the level of joint ventures, by over $1.1 billion, over half of which is due to the fact that KMG Kashagan B.V. KMG Eurobonds were successfully refinanced for $907 million, which made it possible to resolve the issue of large lump sum debt repayments. The next large lump sum repayment is expected only in 2025. The company prevented lowering of credit ratings from Moody’s, Fitch and S&P.
The company made several achievements In the production area. Specifically, in December, two wells were put into pilot operation at Eastern Urikhtau field as part of phase one. In case of a full-scale implementation of the project, the expected production may reach 1,5 billion cubic meters of gas and 500 thousand tons of oil per year. Oil free-flowing was achieved at exploration block Bekturly East in Mangystau Region and at S. Nurzhanov field in Atyrau Region.
Positive changes were also observed in oil processing and petrochemistry. The last year saw improved indicators of the light oil products yield, the depth of processing at the three oil refineries increased on average to 84,8% (from 86,3% to 87,2% at POCR, from 75% to 77,2% at AR, from 84,8% to 90,1% at PKOP).
Significant progress was made in the construction of a gas and chemical complex in Atyrau Region, which in 2020 grew from 53% to 80%. And despite the quarantine and suspended transport communications, we ensured an uninterrupted performance of construction-and-assembly works at the site, delivery of cargo and materials from abroad.
An extensive work was done in the social sphere.
Thanks to the comprehensive work on preserving the social stability among labour collectives and improving social welfare of population in the regions of industrial presence, the KMG Group social welfare index grew from 72% in 2019 to 74% in 2020 according to the study by the Social Engagement and Communications Centre of Samruk-Kazyna JSC.
Despite the cost reductions, the work on improving the working conditions of employees at the production sites was continued. New accommodation facilities were commissioned at Karazhanbas and Asar fields, a rotational camp was built in Aktobe Region, employees of the Atyrau Refinery received the keys to 100 apartments.
An important achievement for KMG in the last year was the absence of work-related fatal accidents. The company has achieved it for the first time.
“In the long run, the issues of labour protection and industrial safety, management of greenhouse gas emissions and reduction of gas flaring, management of water resources, reclamation of lands and increasing the energy efficiency, management of production waste will remain the company’s priorities”, A. Aidarbayev, head of KMG, summed up.
In the current year, the company intends to focus its efforts on further optimization of expenses, attraction of investment into geological exploration, implementation of major projects and achievement of sustainable development goals.