KazMunaiGas to Reduce Oil Output in 2018
JSC KazMunaiGas Exploration Production (KMG EP) plans to reduce oil output in 2018 by 2%, the company says in a press release.
“Planned production in 2018 is 5.6 million tonnes (113 kbopd) from JCS OzenMunaiGas (OMG) and 2.9 million tonnes (58 kbpod) from JSC EmbaMunaiGas (EMG). The total planned production volume in 2018 from OMG and EMG is 8.5 million tonnes (171 kbopd), a 2% decrease on the approved production plan in 2017 mainly due to a reduction in the base production level at OMG in 2017,” the press release says.
KMG EP’s share in the planned production of Kazgermunai (KGM), CCEL and PetroKazakhstan Inc. (PKI) in 2018 is 3.4 million tonnes (68 kbopd), 5% less than the approved production plan in 2017 due to an anticipated natural decline in production at PKI and KGM.
“By 2022 the company plans annual oil production volumes at OMG and EMG to increase to 6.2 million tonnes and 3.0 million tonnes, respectively, 6% higher than approved production plan in 2017. This increase in production is a result of the comprehensive measures with existing well stock and additional geological and technical measures. Meanwhile, production from KGM, CCEL and PKI is planned to be 1.9 million tonnes by 2022, 46% lower than the approved production plan in 2017, due to the natural decline of production at KGM and PKI by 64% and 66% respectively,” the press release says.
Overall, by 2022 the total combined production of KMG EP, including its stakes in KGM, CCEL and PKI, is planned to be 9% lower than approved production plan in 2017.
In 2018 KMG EP plans that OMG and EMG will supply approximately 36% of total sales, or three million tonnes of oil (60 kbopd) directly to the Atyrau refinery and Pavlodar Refinery for processing into oil products, which will then be sold in accordance with the independent crude oil processing scheme effective from April 2016.
Of the three million tonnes of oil supplied to the domestic market, 1.9 million tonnes (38 kbopd) will go to the Atyrau refinery and 1.1 million tonnes (22 kbopd) will go to the Pavlodar refinery in 2018. The annual average share of oil supply to the domestic market in 2019-2022 from OMG and EMG is planned to account for approximately 33% of total sales.
Net revenue achieved from the sale of refined oil products (net of all processing and marketing costs) in 2018 is planned to be 62,616 tenge per tonne at the Atyrau refinery and 65,072 tenge per tonne at the Pavlodar refinery.
Net revenue from these sales will be affected by the prices of oil products (except for government-regulated petrol AI-80) and the output of oil products from refineries, according to the press release. Current FOREX rate is 331.22/$1.
It is expected that after the planned completion of the modernization program at the Atyrau and Pavlodar refineries in 2018, output of light oil products will increase and additionally beginning from the 4th quarter of 2018 production of petrochemicals will increase at the Atyrau refinery. These company’s expectations may be adjusted to account for changes in the domestic fuel market situation of the RoK.
It is planned that KMG EP’s share in the volume of oil supply to the domestic market in 2018 from KGM, CCEL and PKI will amount to 1.6 million tonnes (34 kbopd) or roughly 49% of total sales from these companies.
Between 2019-2022 the volume of oil supply to the domestic market from KGM, CCEL and PKI is planned to account for no more than 50% of these companies’ total sales, the press release says.