Interview With Magzum Mirzagaliyev, CEO Of KazMunayGaz

1.  What place does KMG occupy within the nationwide financial system?

Thanks to your curiosity in our firm. KazMunayGas, it’s not an overstatement to say, is the main oil and fuel firm of Kazakhstan. We handle belongings throughout the whole manufacturing cycle – from hydrocarbons exploration and manufacturing to their transportation and refining in addition to companies we offer within the oil and fuel sector. Our firm was based in 2002 and, as a state-owned firm, we signify the nation’s oil and fuel business pursuits. In February 2022, KazMunayGas celebrated its 20th anniversary. Since December 8, 2022, KMG’s shares are listed on two Kazakhstan inventory exchanges – AIX and KASE, free float is 3%.

The overall quantity of oil manufacturing in tasks with KMG participation is 76 million tons, of which KMG’s share is 23 million tons. This implies 85% and 26% of all oil manufacturing within the Republic of Kazakhstan, respectively. KMG in partnership with such world oil majors as Tengiz (20%), Kashagan (16.88%), Karachaganak (10%) additionally participates in all of the three oil megaprojects we’ve in Kazakhstan, that are the world’s largest fields.

To offer you an understanding of the corporate’s scale, let me additionally make clear that by the tip of 2022, KMG’s share in fuel manufacturing was 15%, in oil refining – 84% and in oil transportation (together with trunk pipeline and offshore oil transportation) it was 53%. The Firm controls the three largest oil refineries in Kazakhstan. 

2. What are the principle oil and fuel exploitation websites within the nation? How do you see the way forward for the nationwide firm, notably within the Atyrau area?

KMG runs business manufacturing operations at 13 tasks with its share starting from 8.6% to 100% in 5 administrative areas of the nation: Atyrau, Mangistau, Aktobe, Kyzylorda and West Kazakhstan areas.

KMG’s enterprise improvement is intently linked to the tasks within the Atyrau area. Firstly, this area has the most important manufacturing share within the nation as a result of largest fields (Tengiz, Kashagan) and 37 fields of Embamunaigas – our subsidiary (100% owned by KMG). Hydrocarbon rate-plateau development tasks at the moment are in progress at Tengiz and Kashagan. So, we count on a outstanding enlargement mission launch on the Tengiz discipline, which can allow annual manufacturing development by 12 million tons. Initiatives on the Kashagan discipline one after the other can be commissioned till 2030. Nevertheless, I must also point out such giant fields in Mangistau area as Uzen, Zhetybai, Kalamkas and Karazhanbas, the share of which is 15% (roughly 14 million tons) of the overall nation’s manufacturing.

Secondly, we at the moment are actively working over the high-margin petrochemical tasks. They’re positioned within the Atyrau area. Kazakhstan Petrochemical Industries Inc. – a large-scale built-in fuel chemical advanced with an annual design capability of 500,000 tons of polypropylene was launched final 12 months. This equates to 1% of worldwide polypropylene manufacturing. The Atyrau polypropylene advanced is likely one of the largest within the CIS.

We at the moment are implementing the second fuel chemical mission – a Polyethylene Plant Building (annual capability is 1.25 million tons). The completed merchandise are deliberate to be bought each on the home market and for export. In keeping with the specialists’ estimates, the annual development in demand for this polymer on this planet till 2030 is anticipated to be 4%.

3. What main exploration tasks are underway?

We plan to additional preserve our exploration and manufacturing management within the oil and fuel business of Kazakhstan. Given the extent of oil and condensate manufacturing in 2021, we’ve the 1P class reserves enough for 16 years, which is relatively greater than the KMG’s friends have. Our 2P reserves throughout all KMG tasks elevated to five.5 mln boe.

On the similar time, KazMunayGas pays particular consideration to the hydrocarbon reserves improvement. We now have fashioned a diversified portfolio of 11 exploration tasks, each onshore and offshore. The biggest of them are Abay, Bekturly Vostochny, Turgay Paleozoic, Al-Farabi. We’re delivering a lot of the tasks with the participation of such worldwide strategic companions as ENI, LUKOIL and different.

As well as, we’re working the exploration tasks at our present fields (Ozenmunaigas, Embamunaigas, Mangistaumunaigas, and many others.). We’re implementing as effectively the Karaton Podsolevoy – a brand new promising exploration mission.

Nevertheless, there are 15 sedimentary basins in Kazakhstan with an unexplored useful resource potential, particularly within the deep subsalt sediments of the Pre-Caspian Basin. The enormous Tengiz, Karachaganak and Kashagan fields had been beforehand found inside its boundaries. These promising websites should be ready for geological exploration, extra exactly, regional seismic survey. Subsequently, we wish to maintain a worldwide highway present to draw funding for promising areas exploration. The scope of those works contains the GE tasks, the Caspian Sedimentary Basin Mission and quite a lot of different promising and energetic KMG tasks.

In 2022, KMG has already began seismic surveys as a part of subsoil geological exploration (GE) at 5 tasks (Berezovsky, Mugodzhary, North Ozen, Bolashak, Zharkyn), which counsel that the brand new promising buildings want additional engineering.

4. In Japanese Europe, KMG owns fuel stations. How do you diversify your group’s actions internationally? What are your enlargement plans in Europe, and notably in Germany?

In Europe, we’ve our footprint within the markets of Romania, Bulgaria, Georgia, Turkey and Moldova via our 100% subsidiary KMG Worldwide N.V. Our core enterprise actions are buying and selling and logistics, petrochemicals and oil refining (Petromidia Refinery, Vega Refinery, petrochemical advanced), petroleum merchandise retailing via a community of filling stations underneath the Rompetrol model, and industrial companies. KMG continues to be one of many key gamers within the Romanian market and yearly offers as much as 4 million tons of feedstock to the Petromidia Refinery.

KMGI’s present technique is to develop and implement petrochemicals and enterprise decarbonization tasks, considering the altering environmental necessities of the EU.

On the similar time, Kazakhstan continues to be one of many main oil exporters to the international locations of the European Union, and yearly we enhance the provides quantity. The principle shoppers of Kazakh oil in Europe are Italy, the Netherlands, Greece, France, Turkey and Spain.

Moreover, we’re looking for for cooperation enlargement. Earlier, as you understand, the Authorities of Germany addressed Kazakhstan with a request to produce Kazakh oil via the Druzhba pipeline to the PCK Raffinerie (Schwedt). In February 2023, we began provides of oil from Karachaganak Petroleum Working (KPO) reserves to PCK Raffinerie (Schwedt). Throughout February-October 2023, we’ve already transported 690 thousand tons of oil to Germany. The anticipated quantity of Kazakh oil transportation (from KPO) via the Druzhba pipeline in 2023 is 890 thousand tons.

5. KMG signed a cooperation settlement with the French firm Air Liquide in 2022? What does the latter encompass, and what new alternatives does it open up?

We extremely respect the partnership with Air Liquide – a world’s chief within the gases manufacturing for business, healthcare and environmental safety. We now have already efficiently carried out 5 tasks on the three KMG crops – Pavlodar Plant, Atyrau Refinery and KPI.

Following the official go to of the President of the Republic of Kazakhstan Ok. Tokayev to France in 2022, we signed a Cooperation Settlement with Air Liquide on a brand new hydrogen manufacturing unit development on the Pavlodar Plant. On June 8, 2023 we signed a Supplementary Settlement. This doc will permit us to maneuver to the sensible realization of the mission. We are going to use hydrogen from the brand new unit to provide diesel gasoline within the quantity of as much as 160 thousand tons per 12 months, in addition to to extend the manufacturing of jet gasoline.