KazMunaiGas E&P Announces 18% Rise In 2007 Oil Reserves

Kazakh oil producer KazMunaiGas E&P reported an 18 percent rise in its 2007 proved and probable reserves to 1.8 billion barrels, saying its reserve replacement ratio was 490 percent. The company"s production rose 11.6 percent in 2007 to 10.6 million tonnes mainly due acquisitions of new oil-producing assets. "The main reason for the reserves increase is a revision of the Uzen field development plan," Chief Executive Officer Askar Balzhanov said in a statement.

"Under the new plan, approved by the appropriate authorities, the current production level can be sustained for approximately the next 10 years, at least five years longer than originally envisioned," he said. KazMunaiGas, which raised about $2 billion (1.01 billion pounds) in a London Initial Public Offering in 2006, said it expected to achieve the updated production profile through an additional capital investment of about $2 billion. "A significant portion of this increase is attributable to the drilling of approximately 1,800 additional new wells over the next 15 years," it said.

The company bought 50-percent stakes in smaller producers Kazgermunai and CITIC Canada Energy Limited last year. Its own production, however, was flat at 9.5 million tonnes. KMG E&P is controlled by Kazakh state company KazMunaiGas which by Kazakh law has the right to buy any oil assets before they are offered on the market. On 27 August 2007, KazMunaiGas bought 75% in The Rompetrol Group, thus boosting the value of the entire The Rompetrol Group to 3.616 billion USD.