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KMP EP slashes planned 2015 development drills and capex

02nd April 2015

KazMunaiGas Exploration Production (KMG EP) has been forced to slash its 2015 capex spending and reduce its planned development drilling by 78 wells because of the low oil price environment

KazMunaiGas Exploration Production (KMG EP) has been forced to slash its 2015 capex spending and reduce its planned development drilling by 78 wells because of the low oil price environment
Planned production in 2015 is expected to be 5.4 million tonnes (108 kbopd) from JSC OzenMunaiGas (OMG) and 2.8 million tonnes (56 kbopd) from JSC EmbaMunaiGas (EMG)

KMG EP has revised its 2015 budget and capital expenditure is expected to be USD 457m, which is USD 164m, or 26 per cent, less than the capital expenditure plan for 2015 approved in December 2014.

This is 34 per cent lower than the actual capital expenditure in 2014.

The decrease in capital expenditure compared to the earlier approved plan is primarily due to the reduction in development drilling from 257 to 179 wells and the postponement of a few longer-term projects not related to production.

It is expected that in 2015 at an oil price of USD 50 per barrel, the company’s free cash flow will be negative.

Planned production in 2015 is expected to be 5.4 million tonnes (108 kbopd) from JSC OzenMunaiGas (OMG) and 2.8 million tonnes (56 kbopd) from JSC EmbaMunaiGas (EMG). The total planned production volume in 2015 from OMG and EMG is expected to be 8.2 million tonnes (164 kbopd), which is 69 thousand tonnes or 1 per cent less than the 2015 planned production volumes approved in December 2014.

The company’s share in the planned production of Kazgermunai (KGM), CCEL (CCEL) and PetroKazakhstan Inc. (PKI) in 2015 remained unchanged compared to the earlier approved budget and is expected to be 1.5 million tonnes (32 kbopd), 1.1 million tonnes (19 kbopd) and 1.4 million tonnes (31 kbopd), respectively.

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