KMG ANNUAL REPORT 2024
PRODUCING TODAY.
SHAPING TOMORROW
20
24
PRODUCING TODAY.
SHAPING TOMORROW
20
24
ABOUT THE REPORT
The analysis of financial performance must be viewed
in the context of the Company’s audited IFRS
consolidated financial statements for the year ended
31 December 2024.
The Annual Report includes statements that are,
or may be deemed to be, forward-looking statements
relating to KMG’s future operating performance
based on projections and estimates of the Company’s
management based on the current situation. Forward-
looking statements cover all matters that are not
historical facts. They include, but are not limited
to, statements regarding KMG’s intentions, beliefs
and current expectations concerning the Company’s
performance, financial condition, liquidity, prospects,
growth, strategies and the industries in which
the Company operates. By their nature, forward-looking
statements involve risk and uncertainty because they
relate to future events and circumstances that may
or may not occur, i.e., due to the influence of various
objective factors, actual performance may differ from
these projections and estimates.
In the comparison of periods, exact values were used
without rounding. The Company believes that
any possible adjustments related to rounding should not
have a material impact on its results.
CONTENTS
1 About the Report
2 Presentation sections
10 STRATEGIC REPORT
12 Company overview
20 Statement from the Chairman of the Board of Directors
24 Statement from the Chairman of the Management Board
28 Strategy
52 Operating review
106 Financial overview
118 Ensuring sustainable development
176 CORPORATE GOVERNANCE
178 Corporate governance framework
181 General Meeting of Shareholders
182 Board of Directors
201 Committees of the Board of Directors
212 Management Board
224 Remuneration Report
226 Corporate control
234 Business ethics
238 Shareholder and investor relations
244 FINANCIAL STATEMENTS
340 APPENDIX
342 Report on compliance with the Corporate Governance Code
346 Major and interested-party transactions
347 Glossary
350 Contacts
Report boundaries
The Report of JSC National Company KazMunayGas
for 2024 includes the performance results of the parent
company and its subsidiaries and associates, referred
to as JSC NC KazMunayGas (KMG, the Company,
KMG Group), which are compiled using the principles
of the KMG consolidated financial statements prepared
under International Financial Reporting Standards (IFRS).
In the Annual Report, a number of production
and economic performance indicators are determined
under IFRS and in relation to the aggregate
of KMG companies for the purposes of KMG’s IFRS
consolidated financial statements for the year ended
31 December 2024 and may differ from similar indicators
of KMG’s reporting documents prepared in accordance
with the requirements of the legislation of the Republic
of Kazakhstan.
However, some of the Company’s performance
indicators presented use the principles that are followed
in the preparation of management statements and other
statements. Due to variations in the procedures utilised
to generate the consolidated financial statements
and other statements, there may be inconsistencies
in the indicators calculated using these procedures. KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix
The analysis of financial performance must be viewed
in the context of the Company’s audited IFRS
consolidated financial statements for the year ended
31 December 2024.
The Annual Report includes statements that are,
or may be deemed to be, forward-looking statements
relating to KMG’s future operating performance
based on projections and estimates of the Company’s
management based on the current situation. Forward-
looking statements cover all matters that are not
historical facts. They include, but are not limited
to, statements regarding KMG’s intentions, beliefs
and current expectations concerning the Company’s
performance, financial condition, liquidity, prospects,
growth, strategies and the industries in which
the Company operates. By their nature, forward-looking
statements involve risk and uncertainty because they
relate to future events and circumstances that may
or may not occur, i.e., due to the influence of various
objective factors, actual performance may differ from
these projections and estimates.
In the comparison of periods, exact values were used
without rounding. The Company believes that
any possible adjustments related to rounding should not
have a material impact on its results.
CONTENTS
1 About the Report
2 Presentation sections
10 STRATEGIC REPORT
12 Company overview
20 Statement from the Chairman of the Board of Directors
24 Statement from the Chairman of the Management Board
28 Strategy
52 Operating review
106 Financial overview
118 Ensuring sustainable development
176 CORPORATE GOVERNANCE
178 Corporate governance framework
181 General Meeting of Shareholders
182 Board of Directors
201 Committees of the Board of Directors
212 Management Board
224 Remuneration Report
226 Corporate control
234 Business ethics
238 Shareholder and investor relations
244 FINANCIAL STATEMENTS
340 APPENDIX
342 Report on compliance with the Corporate Governance Code
346 Major and interested-party transactions
347 Glossary
350 Contacts
Report boundaries
The Report of JSC National Company KazMunayGas
for 2024 includes the performance results of the parent
company and its subsidiaries and associates, referred
to as JSC NC KazMunayGas (KMG, the Company,
KMG Group), which are compiled using the principles
of the KMG consolidated financial statements prepared
under International Financial Reporting Standards (IFRS).
In the Annual Report, a number of production
and economic performance indicators are determined
under IFRS and in relation to the aggregate
of KMG companies for the purposes of KMG’s IFRS
consolidated financial statements for the year ended
31 December 2024 and may differ from similar indicators
of KMG’s reporting documents prepared in accordance
with the requirements of the legislation of the Republic
of Kazakhstan.
However, some of the Company’s performance
indicators presented use the principles that are followed
in the preparation of management statements and other
statements. Due to variations in the procedures utilised
to generate the consolidated financial statements
and other statements, there may be inconsistencies
in the indicators calculated using these procedures. KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix
•
Drilling has commenced
on a 5,500 m deep PZ-1
prospecting and exploration well.
• This marks the first time wells
of such depth have been
attempted in this region.
Turgai Palaeozoic block Karazhar block Taisoigan block Karaton Subsalt block
Kyzylorda
Region
Aktobe
Region1
Atyrau
Region1
Atyrau
Region1
• Drilling has begun on the first
prospecting well with a depth
of 5,500 m.
• This is a joint project between KMG
and Tatneft.
• The Company secured
an exploration and production
contract for this project during
the reporting year.
• Drilling has begun on the first
prospecting well with a depth
of 3,000 m.
• Drilling of the first prospecting
wells has begun.
• By the end of 2025, drilling
will expand to eight structures
with depths varying from 400
to 3,800 m.
Kalamkas-Sea offshore field development project
Caspian Sea
• This is a joint project between
KMG and LUKOIL.
• 2024 saw the initiation of design
document development (FEED
phase), with offshore platform
construction scheduled
to begin in 2026, paving the way
for production at the Kalamkas-
Sea field.
22 bln tonnes of gas
recoverable reserves
4 mln tonnes of oil
expected annual production
USD 6.4 bln
cost estimate of the project
86 mln tonnes of oil
~80 thous. bbl
per day
Implementation of promising exploration projects
in 2024, with total resources exceeding 800 mln tonnes
in oil equivalent
PROMISING EXPLORATION
INITIATIVES
KMG remains focused on adding new reserves sufficient
both for conventional oil and gas operations and new
promising areas of activity
Strategic goal: resource
base sufficient to support
the Company’s growth
800 mln tonnes
total resources of promising exploration
projects (in oil equivalent)
1. The project operates under the improved model contract, significantly enhancing the investment appeal of complex fields in Kazakhstan. 2 / 3 KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix
on a 5,500 m deep PZ-1
prospecting and exploration well.
• This marks the first time wells
of such depth have been
attempted in this region.
Turgai Palaeozoic block Karazhar block Taisoigan block Karaton Subsalt block
Kyzylorda
Region
Aktobe
Region1
Atyrau
Region1
Atyrau
Region1
• Drilling has begun on the first
prospecting well with a depth
of 5,500 m.
• This is a joint project between KMG
and Tatneft.
• The Company secured
an exploration and production
contract for this project during
the reporting year.
• Drilling has begun on the first
prospecting well with a depth
of 3,000 m.
• Drilling of the first prospecting
wells has begun.
• By the end of 2025, drilling
will expand to eight structures
with depths varying from 400
to 3,800 m.
Kalamkas-Sea offshore field development project
Caspian Sea
• This is a joint project between
KMG and LUKOIL.
• 2024 saw the initiation of design
document development (FEED
phase), with offshore platform
construction scheduled
to begin in 2026, paving the way
for production at the Kalamkas-
Sea field.
22 bln tonnes of gas
recoverable reserves
4 mln tonnes of oil
expected annual production
USD 6.4 bln
cost estimate of the project
86 mln tonnes of oil
~80 thous. bbl
per day
Implementation of promising exploration projects
in 2024, with total resources exceeding 800 mln tonnes
in oil equivalent
PROMISING EXPLORATION
INITIATIVES
KMG remains focused on adding new reserves sufficient
both for conventional oil and gas operations and new
promising areas of activity
Strategic goal: resource
base sufficient to support
the Company’s growth
800 mln tonnes
total resources of promising exploration
projects (in oil equivalent)
1. The project operates under the improved model contract, significantly enhancing the investment appeal of complex fields in Kazakhstan. 2 / 3 KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix
PETROCHEMICALS AS A NEW GROWTH
DRIVER
Leveraging our access to cost-effective raw materials and
responding to projected growth in global petrochemical
demand, KMG continues developing its petrochemical
business segment, which offers significant multiplier
effects for the entire national economy.
In September 2024, the construction of a polyethylene
plant started in the National Industrial Petrochemical
Technopark special economic zone in the Atyrau Region.
The project is expected to be completed in 2029.
1.25 mln tonnes per year
plant capacity
The project is being implemented following an order
of Kazakhstan’s President Kassym-Jomart Tokayev and
will represent the largest processing industry project in
the country.
The plant’s launch will enable:
• substitution of imported polyethylene with that
manufactured domestically
• growth in high value added exports.
Strategic goal: business
diversification and product
portfolio expansion
Project implementation will deliver:
8,000
jobs during the construction phase
800
permanent jobs following
production launch
1.2 %
potential
contribution
to GDP growth
Polyethylene project
Gas separation unit
construction project
The gas separation unit (GSU) is designed for deep
processing of natural gas and separation of valuable
components, ensuring stable supplies of ethane and
propane for the petrochemical industry. Project operator:
KMG PetroChem, a subsidiary of KMG. On 14 September
2024, KMG’s Investment Committee resolved to proceed
to the Implementation Phase
The gasochemical complex of KPI Inc. continues its
active development, making a substantial contribution to
reducing Kazakhstan’s import dependency.
249 thous. tonnes
of polypropylene made by the plant in 2024
230 thous. tonnes
exported to China, Europe, Turkey, and Russia
Domestic market
supplies have reduced
product imports to
17% compared to 34%
in 2023.
34% 2023
2024 17%
KPI Inc. project Gas separation unit
construction project
USD 3 bln
preliminary cost estimate of the project
GSU construction and installation are scheduled to
commence in 2Q 2025. The commissioning is scheduled
for 2028.
↓ ↓
↓
KMG has established large warehouses in Almaty and
Astana, ensuring uninterrupted deliveries to processing
companies. The Company continues to service the
Kazakhstan market while simultaneously increasing
export volumes to Russia, Turkey, and other countries.
10
target grades of polypropylene
USD 7.4 bln
project investments
Planned production portfolio: 20 grades of polyethylene,
with 40% classified as premium segment. The project
is run by Silleno, whose shareholders are KMG (40%),
Sinopec Overseas Investment Holding (30%), and
SIBUR Holding (30%).
KPI Inc. project Polyethylene project 4 / 5 KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix
DRIVER
Leveraging our access to cost-effective raw materials and
responding to projected growth in global petrochemical
demand, KMG continues developing its petrochemical
business segment, which offers significant multiplier
effects for the entire national economy.
In September 2024, the construction of a polyethylene
plant started in the National Industrial Petrochemical
Technopark special economic zone in the Atyrau Region.
The project is expected to be completed in 2029.
1.25 mln tonnes per year
plant capacity
The project is being implemented following an order
of Kazakhstan’s President Kassym-Jomart Tokayev and
will represent the largest processing industry project in
the country.
The plant’s launch will enable:
• substitution of imported polyethylene with that
manufactured domestically
• growth in high value added exports.
Strategic goal: business
diversification and product
portfolio expansion
Project implementation will deliver:
8,000
jobs during the construction phase
800
permanent jobs following
production launch
1.2 %
potential
contribution
to GDP growth
Polyethylene project
Gas separation unit
construction project
The gas separation unit (GSU) is designed for deep
processing of natural gas and separation of valuable
components, ensuring stable supplies of ethane and
propane for the petrochemical industry. Project operator:
KMG PetroChem, a subsidiary of KMG. On 14 September
2024, KMG’s Investment Committee resolved to proceed
to the Implementation Phase
The gasochemical complex of KPI Inc. continues its
active development, making a substantial contribution to
reducing Kazakhstan’s import dependency.
249 thous. tonnes
of polypropylene made by the plant in 2024
230 thous. tonnes
exported to China, Europe, Turkey, and Russia
Domestic market
supplies have reduced
product imports to
17% compared to 34%
in 2023.
34% 2023
2024 17%
KPI Inc. project Gas separation unit
construction project
USD 3 bln
preliminary cost estimate of the project
GSU construction and installation are scheduled to
commence in 2Q 2025. The commissioning is scheduled
for 2028.
↓ ↓
↓
KMG has established large warehouses in Almaty and
Astana, ensuring uninterrupted deliveries to processing
companies. The Company continues to service the
Kazakhstan market while simultaneously increasing
export volumes to Russia, Turkey, and other countries.
10
target grades of polypropylene
USD 7.4 bln
project investments
Planned production portfolio: 20 grades of polyethylene,
with 40% classified as premium segment. The project
is run by Silleno, whose shareholders are KMG (40%),
Sinopec Overseas Investment Holding (30%), and
SIBUR Holding (30%).
KPI Inc. project Polyethylene project 4 / 5 KMG Annual Report 2024 Strategic report Corporate governance Financial statements Appendix