Introduction
This report is a summary of payments made by KazMunaiGas Exploration Production (KMG
EP, Company) to the state budget in 2015, and is made in accordance with The UK Reports on Payments to Governments
Regulations 2014 (amended in December 2015). The regulations transpose into UK law Chapter 10 "Report on payments to governments"
of the revised 2013 EU Accounting Directive. They require large and publicly listed oil, gas, mining and logging companies
incorporated (registered) in the UK to annually disclose the payments they make to governments on a country-by-country and
project-by-project basis.
The obligation to disclose under the new regime applies to KMG EP as a UK-listed extractive issuer
- extractive company whose securities are publicly listed on a UK-regulated stock market - and whose "home state" is the UK.
"Home state" is defined in the FCA rules: for issuers registered outside the EU - where in the EU its shares were first offered
to the public or where in the EU it made its first application for admission to trading on a regulated market.
About the company
KazMunaiGas Exploration & Production ("KMG EP" or "Company") was established in March 2004 by
merger of Ozenmunaigas ("Ozen") and Embamunaigas ("Emba").
The company is engaged in exploration, development, production, processing, and export of raw
hydrocarbons and in acquisitions of oil and gas assets. Its shares and global depositary receipts are listed on the Kazakhstan
Stock Exchange and the London Stock Exchange, respectively. The majority shareholder of the Company is National Company
KazMunaiGas which represents national interests in the Kazakh oil and gas sector. The Company's core oil and gas assets run their
business in the Caspian Depression, Mangystau and South Turgai oil basins.
Based on its performance in 2015, the Company remained one of the top three oil producers in
Kazakhstan.
The Company runs its principal business through its wholly-owned subsidiaries Ozenmunaigas and
Embamunaigas. Besides, the Company has other subsidiaries and shares in joint entities, associates and in other mostly non-core
entities in which the Company has either majority or minority stake.
While being aware that its operations are directly related to the use of natural resources, KMG EP
assumes its social responsibility for conservation of resources and for preservation of environment.
This report contains information about payments made to government agencies in 2015.
Reporting companies
This report includes information on payments to governments made by the Company and its
subsidiaries and affiliates including joint ventures and an associate for operations relating to exploration, development, and
production of oil and gas.
Reporting period and scope of the report
The reporting period is 2015.
The use of reporting system helps provide information on payments to governments. It focuses on
improving transparency of the Company in terms of payments to government bodies, increasing accountability of extractive
companies in terms of income from the sector, raising awareness among people about operations of the Company in the regions, and
enables to compare the report with reports made by leading global oil and gas producers.
Starting with this year, the Company is going to make reports on payments to governments in
accordance with applicable laws and best disclosure practices.
The report covers the Company and two producing companies that are controlled by the Company -
Ozen and Emba, other wholly-owned subsidiaries that mostly render oil operations support services, and joint ventures Kazgermunai
and Ural Group Limited, and the associate PetroKazakhstan Inc. KS EP Investments BV, the joint venture, has not been incorporated
into the report because of complete impairment of this investment in 2015.
Government
Government means local executive authorities (akimats), State Revenue Committee under the Kazakh
Ministry of Finance, and some other government agencies.
Companies
Company means a company whose payments have been incorporated into this report.
Payments to governments
The information is presented according to the following types of payments:
Taxes
All taxes, except for corporate income tax payable by non-residents, value added tax (VAT),
property, transport, and land taxes, and taxes and deductions from salaries (individual income tax (IIT), social tax, mandatory
pension contributions and social deductions), and any other taxes that are not associated with income from company's core
operations.
Mineral Extraction Tax
Mineral extraction tax is a mandatory tax payable by a subsoil user for each mineral, oil, ground
water or therapeutic mud individually that is produced in Kazakhstan.
The taxable item is the physical volume of crude oil, gas condensate or natural gas produced by
subsoil user over tax period.
Commercial Discovery Bonus
Commercial discovery bonus must be paid by a subsoil user under a contract for production of
minerals and/or joint exploration and production for each commercial discovery of minerals at a license area including discovery
made during additional exploration.
The taxable item is the physical volume of minerals approved by authorized government
agency.
Payments for infrastructure improvements
Payments for infrastructure improvements mean expenses for social and economic development of a
region, and development of its infrastructure. Basically they consist of contractual obligations.
Contractual obligations include contributions to social program fund and environmental fund as
well as commitments to train specialists in accordance with the terms of subsoil use contracts. However, for the purposes of this
report, the commitment to train experts has been removed as they are not paid to the government.
Miscellaneous
Payments of export customs duty (ECD) for export of crude oil.
Currency
The report is presented in Kazakhstan tenge ("KZT"), which is the functional and currency in which
financial statements of the Company are presented. Transactions in foreign currency must initially be recorded in the functional
currency at the exchange rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign
currencies must be converted to the functional currency rate prevailing at the reporting date.
SA
Subsidiaries and affiliates of the Company:
1) Ozenmunaigas
2) Embamunaigas
3) Kruz
4) Zhondeu
5) Ken Kurylys Service
6) KMG EP Catering
7) Kazakh Gas Processing Plant
8) Water Production and Transportation Office (UDTV)
9) Drilling and Well Servicing Office
10) Cooperatieve KMG EP U.A.
11) KMG EP Exploration Ventures
12) Support Service Vehicle and Well Servicing Office
Contacts
The report on payments to the state budget for 2015, and further details about the Company are
available on the company's website: www.kmgep.kz
Please send questions related to the information provided in this report to: Company Secretary
Office, Kabanbay Batyr 17, Astana, 010000, Republic of Kazakhstan
Tel. +7 7172 97 79 54
Email: L.Nurmagambetova@kmgep.kz
1. COUNTRY-BY-COUNTRY
REPORT IN 2015 (in millions of tenge)
|
|
|
|
|
Taxes
|
Mineral Extraction Tax
|
Commercial discovery
bonus
|
Payments for infrastructure improvements
|
Miscellaneous
|
Total
|
|
Government (country):
|
|
|
|
|
|
|
|
Kazakhstan
|
200 252
|
73 870
|
2 934
|
1 790
|
77 462
|
356 308
|
2. REPORT ON PAYMENTS TO THE STATE BUDGET IN 2015
(in millions of tenge)
|
|
|
|
|
Taxes
|
Mineral Extraction Tax
|
Commercial discovery
bonus
|
Payments for infrastructure improvements
|
Miscellaneous
|
Total
|
|
Government (including
akimats)
|
|
|
|
1 573
|
|
1 573
|
|
Department of public revenues
|
200 252
|
73 870
|
2 934
|
217
|
77 462
|
354 734
|
|
TOTAL:
|
200 252
|
73 870
|
2 934
|
1 790
|
77 462
|
356 308
|
3. REPORT ON COMPANIES for 2015 (in millions of tenge)
|
|
|
|
|
Taxes
|
Mineral Extraction Tax
|
Commercial discovery
bonus
|
Payments for infrastructure improvements
|
Miscellaneous
|
Total
|
|
KazMunaiGas Exploration & Production (including SA)
|
144 809
|
66 486
|
1 619
|
1 215
|
63 127
|
277 255
|
|
KGM*
|
28 117
|
4 267
|
0
|
358
|
6 669
|
39 411
|
|
UGL**
|
0
|
0
|
1 315
|
|
33
|
1 348
|
|
PKI***
|
27 326
|
3 117
|
0
|
217
|
7 634
|
38 294
|
|
TOTAL:
|
200 252
|
73 870
|
2 934
|
1 790
|
77 462
|
356 308
|
* KGM - share in expenditures is 50%
**UOG - share in expenditures is 50%
***PKI - share in expenditures is 33%