KMG EP website

OVERVIEW

KazMunaiGas Exploration Production Joint Stock Company (“the Company” or “KMG EP”) is engaged in the exploration, development, production, processing, export of hydrocarbons and the acquisition of oil and gas assets. The Company’s core operations are oil and gas properties located in the Pre-Caspian, Mangistau, Southern Torgai basins. The Company’s majority shareholder is JSC National Company KazMunaiGas (NC KMG), the wholly state-owned joint stock company which represents the state’s interests in the Kazakh oil and gas industry. The Company conducts its core production activities at 47 oil and gas fields, including “Uzenmunaigas” (“UMG”), which consists of 2 fields, “Embamunaigas” (“EMG”), which consists of 40 fields and “Kazakh Gas Refinery” LLP which consists of 5 fields. The Company also has a 50% interest in the oil and gas production joint venture Kazgermunai LLP, CCEL, Ural Group Limited BVI (“UGL”) and a 33% interest in its associate PetroKazakhstan Inc.

Company is carrying out onshore exploration in the areas of Liman, Taisoigan, R-9, Karaton-Sarkamys, Uzen and Karamandybas, Fedorovskiy block (“UGL”), Karpovskiy Severniy (“Karpovskiy Severnyi JSC”), Temir, Teresken, Zharkamys Eastern-1 (“KMG EP Exploration assets”) and also holds 35% interest in the BG Group operated license in the United Kingdom Central North Sea – the production license which contains the White Bear prospect.

The Company’s total 2011 oil production, together with the share of its joint ventures and its associate company, was approximately 12,341k tonnes or 250kbopd. This includes oil derived from its 50% share in JV Kazgermunai LLP, its 50% share in ССEL and its 33% stake in PetroKazakhstan Inc. The stake in UMG and EMG produced 159kbopd with a further 41kbopd from PetroKazakhstan Inc., 32kbopd from JV Kazgermunai LLP and 18kbopd from CCEL.

Further details of the above joint ventures and associate are given in the section entitled: Overview of Associate and Joint Ventures Operations. Elsewhere in this Operating and Financial Review the discussion is limited to the core assets (UMG, EMG and 100% subsidiaries) of the Company unless indicated otherwise.