Mini–plan of the oil market

Who is producing oil in Kazakhstan. This question will always remain quite vital to the citizens of our republic, the development of which mostly depends on this resource. Just as in previous years, Exclusive is once again continuing in its efforts to further open this industry through publishing the structure of the domestic oil and gas market.

Akzhol Sadeshov

As in last year’s Oil & Gas issue, we refrain from including an unabridged list of all companies and fields, instead choosing to focus on the major players and projects that define the development of the industry.
Over the previous 12 months, the oil and gas sector has been characterized by a great number of transformations, starting from restructuring and finishing with mergers and acquisitions. If before, major deals for the acquisition of petroleum assets dominated among those companies operating inside Kazakhstan, at present the picture has altered greatly.
On January 18th, President Nursultan Nazarbayev noted, while presenting to members of Parliament the strategy for Kazakhstan’s entry into the list of the 50 most competitive nations, that the state must support growth in operations of domestic oil companies, both within the nation and abroad. The objects of the President’s goodwill acted quickly on their own. And so, the state-operated oil and gas company, KazMunayGas (KMG), which represents the government’s interest in the sector, actively participated in acquiring petroleum assets both within the country and abroad over the period of this survey.
The state-owned gas transportation company, KazTransGas (KTG), a subsidiary of KMG, purchased 100% of the shares in JSC AlmatyGas during Q2 of the current year. While internationally, KTG bought out Georgia’s gas distribution company, JSC Tbilgasi.
KMG announced its intention to acquire half of the Orenburg Gas Refinery from Russia’s Gazprom during 2006, thus creating a JV on a par basis with the Russian gas monopoly. Additionally, KMG is considering the possibility of constructing new oil refineries on the territories of Turkey and China.
However, just at the beginning of this summer, KMG’s defeat in the fight for Lithuania’s Mazeikiu Nafta oil refinery became known. At the same time, Exploration and Production KMG, a subsidiary of the national company, was taken out of the running for the Russian company, JSC Udmurtneft, which operates on older oilfields. Nonetheless, KMG continues its hunt for petroleum acquisitions in order to increase its own resource base, develop vertical and horizontal integration, and continue its plan of strategic expansion. Therefore, at the start of July KMG purchased a 33% share in PetroKazakhstan and a 50% stake in Valsera Holding BV (PetroKazakhstan Oil Products).
The latest major purchase by KMG was a 50% share in KazGerMunay on July 11th, which permits the state-operated giant to share the company on an equal basis with PetroKazakhstan Kumkol Resources.
The list of companies, projects, and shareholdings are given as of mid-July 2006.

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