Delivering in challenging times
Annual Report 2015
Annual Report 2015
As of year-end 2015, the volume of KMG EP’s proven and probable reserves audited by DeGolyer and McNaughton, increased to around 152 million tonnes (1,115 billion barrels), some 15% more than at year-end 2014. This was mainly due to the involvement in the development of reserves through the implementation of more effective geological and technical measures, including the drilling of wells.
At the end of 2015 the Company maintained its position in the top three companies in terms of oil production in Kazakhstan. Working with Scientific Research Institute of Mining and Drilling Technologies LLP, we have focused on improving the efficiency of production activities.
This is mainly due to lower investments in maintenance Capex as well as a decrease in both drilling activity and the cost of drilling, which was the result of a 15% discount obtained from the drilling contractor.
The MTO and TORO projects will allow us to improve processes at all levels of control over the supply system, to lower stock levels in storage and also to shorten the lead times for organising purchases and sales. The overall benefit by the end of 2017 should be 3.3 billion tenge.
The time needed to restart well operations will be cut by 15-20%, the more economical mode of operating subsoil equipment will cut maintenance stoppages from 20 to 15 per year.
Social expenses in 2015 included funding for social programs and the environment in Atyrau and Mangistau of 1.9 billion tenge, and for local expert training of 0.7 billion tenge. The Company’s social policy strategy aims to promote the development of the regions.
KMG EP is aware that its activities are directly related to the use of natural resources and recognises its responsibility to society for the responsible use of these resources and for the preservation of the environment.
Since its formation, KMG EP has provided training and skills development for its employees. KMG EP holds various corporate training programmes to promote uniform corporate policies and strategic priorities.
In 2015 total attendance at all of the Company’s training sessions was 37,941, with many employees attending more than one session.
First Deputy Chief Executive of JSC NC KazMunayGas
Chairman of the Board of Directors of KMG EP
Over the course of 2015 and during the 2016 year to date, the Independent Non-Executive Directors (‘INEDs’) have experienced challenging times with respect to the corporate governance of KMG EP. The INEDs believe that shareholders should be aware of those challenges, and set out below a brief summary.>
Chief Executive Officer of KMG EP