Kazakh Premier Urges Speeding Up of Purchase of Major Oil Company’s Shares

Text of article by Yevgeniy Dmitriyev entitled: “Prime Minister calls for quicker purchase”, published by the Izvestiya Kazakhstan newspaper on 5 June

During yesterday’s government conference call, [Kazakh Prime Minister] Karim Masimov demanded that the management of KazMunayGaz, the manager of this company, the Samruk holding, and the Ministry of Energy, which is in charge of the oil and gas sector, complete the purchase of not less than 51 per cent of the shares in the Mangistaumunaygaz (MMG) company on behalf of the state “in the shortest possible time”.

The head of government recalled that he had already ordered several times that the shares in the MMG be purchased by the state but its implementation was being dragged out. Karim Masimov also specifically noted that shares in the Pavlodar refinery should in future be included in the state’s MMG package.

“Simultaneously, it is necessary to consider issues relating to expanding production at PNPZ [Pavlodar Oil Refinery], including the possibility of producing aviation kerosene, kerosene and high- octane petrol,” the head of government said, adding that the state was ready after coming to this plant to invest “resources and means” in order to supply the domestic market with high-octane petrol (information from the MEMP [probably Ministry of Energy and Mineral Resources] says that Kazakhstan has been providing itself with low- octane petrol already for a long period of time) and with aviation fuel.

Returning to the order on the purchase of the MMG’s shares, the head of government said that the delay with its implementation was “unjustified”.

“I order that you report to me about implementation within one week,” Karim Masimov said.

As was said earlier, KMG is holding talks with Central Asia Petroleum Ltd., which is registered in Indonesia.

The assets of MMG include 36 oil and gas fields, 15 of which are already being developed. The largest of them in terms of reserves are Kalamkas and Zhetybay.

Experts’ estimate is that the total reserves of oil in the MMG fields amount to 960m t, including over 180m t that is extractable. The company annually extracts about 5.7m t of oil, that is to say, nearly one-tenth of the liquid hydrocarbons [produced] in the country.

Mangistaumunaygaz is also the managing company of the Pavlodar refinery, and owns a blocking package of shares – 54.8 per cent. The possible price of the package being purchased by the state has not been made public yet. However, according to information from the Ekspert-Kazakhstan publication, as of the end of 2007 it was not less than 4bn dollars.

Originally published by Izvestiya-Kazakhstan, Almaty, in Russian 5 Jun 08 p 7.

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