KMG income soars on higher oil price in H1
Net income at Kazakhstan's national oil company KazMunayGas (KMG) soared to 644bn Kazakh tenge ($1.5bn) in the first six months of 2021, from just 21bn tenge in the year-earlier period, as higher oil prices more than offset a decline in its production.
KMG noted that Dated Brent oil traded at $65/barrel on average in January through June, versus $40 a year before. But the company suffered a 5.3% slide in oil production to 10.74mn metric tons (435,000 barrels/day), with the decline spread across Kazakhstan's largest fields Karachaganak, Kashagan and Tengiz, as well as KMG's three main oil-producing subsidiaries.
Kazakhstan joined other OPEC+ members last year in making deep cuts to its production in a co-ordinated effort to rebalance supply with demand in the wake of the coronavirus pandemic. But its natural gas supply was also down 5.6% yr/yr at 4.08bn m3, owing to lower sales both in Kazakhstan and China, again because of the pandemic's impact.
KMG's core earnings (Ebitda) almost doubled to 1.06 trillion tenge in January through June, on the back of a 38.5% upswing in revenues. Free cash flow recovered to 291bn tenge from negative 5bn tenge a year earlier, while net debt had fallen 8.8% to 2.37 trillion tenge by the end of June. Besides higher oil prices, KMG also benefited from a 5% drop in the value of the Kazakh tenge, which inflated the value of its exports.