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National Company National Company ““KazMunayGasKazMunayGas””::

Contribution to Energy Security Contribution to Energy Security

Palais des Nations, Geneva

28 November 2007

UNECE Energy Week “Investing in Energy Security”

16th Session Committee on Sustainable Energy

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«Currently we should focus on diversification and ensure of sustainable routes of energy resources supply from Kazakhstanto global markets».

President of the Republic of Kazakhstan Nursultan Na zarbayev

Main components of JSC NC “KazMunayGas” activity in global energy security:

I. Development of hydrocarbons resource base

II. Expansion of existing transportation routes and creation of a new ones

III. Development of refining and oil chemistry in compliance with international demands

IV. Implementation of modern standards of corporate governance

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Position of Kazakhstan in world oil & gas industry

38

264

138

115102 98

80 79

4236 30

17 16 15 14 12 12 10 9 7

Sau

di A

rabi

a

Iran

Iraq

Kuw

ait

UAE

Ven

ezue

la

Rus

sia

Liby

a

Kaz

akhs

tan

Nig

eria

USA

Can

ada

Chi

na

Qat

ar

Mex

ico

Alg

eria

Bra

zil

Nor

way

Ang

ola

Aze

rbai

jan

World’s oil reserves by countries, bln. bbl / bln. tons

Kazakhstan:9th place among all countries of the world

2nd place among non-OPEC countries

36,3

15,514,013,0

11,5 10,9

18,9

5,5 4,9 3,7 2,4 2,22,0 1,7 1,5 1,7 1,1 1,2 1,0

5,5

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Добыча нефти и газового конденсата в Казахстане

Oil and gas condensate production

Dynamics of main indicators of the JSC NC “KazMunayGas”

148 158 179 188 191 191

6568

79 7199

152

0

100

200

300

400

2002 2003 2004 2005 2006 2007 (plan)

Thousand bbl / day

JSC NC “KazMunayGas" JV share

17 16214 50312 96612 88611 32710 646Thousand

tonsOil and gas condensate production

200720062005200420032002Unit of measurementIndicator

213 226

290

259258

343

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Transit & transportation hydrocarbon potential of Kazakhstan

Diversification of oil transportation routes

POLANDGERMANY

Belarus

UKRAINE

RUSSIA

IRAN

TURKEY

BLACK SEA

CHINA

MEDITERRANEAN

ROMANIA

KAZAKHSTAN

Uzbekistan

Turkmenistan

Kyrgyzstan

Atyrau

Aktau

Baku

BULGARY

NovorossiyskMakhachkala

Neka

Supsa

Ceyhan

Primorsk

Butinge Lithuania

Gdansk

Kuryk

Kenkiyak Kumkol

Kashagan Tengiz

Atasu

Alashankou

ASTANA

BTC

CPC

Atyrau-Samara

Atasu-Alashankou

Eskene-Kuryk

Eskene

Kenkiyak-Kumkol

KCTS

Planned routes

Existing routes

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Transit & transportation hydrocarbon potential of Kazakhstan

Diversification of gas transportation routes

Kazakhstan - ChinaTo Europe

Bukhara - Tashkent - Bishkek - Almaty

Bukhara - Ural

Gazli - Shymkent

Central Asia - Center

"Soyuz"(Orenburg - Novopskov)

Makat - Northern Caucasus

Baku - Tbilisi - Erzurum

Pricaspian

Transcaspian

Nabucco

Russia

Kazakhstan

Turkmenistan

Existing routesPlanned routes

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Expansion of business geography

� Acquisition of the assets of JSC “Tbilgazi”The enterprise is the operator of gas supply in Tbilisi, GeorgiaTotal length of gas pipelines is 2 414 km.

� Creation of a JV on the basis of the Batumi oil ter minalThis terminal is the first foreign oil transportation asset of the Republic of Kazakhstan with a directaccess to the world ocean

� Creation of a JV with OJSC “Gazprom” on the basis i f the Orenburg Gas RefineryAgreement between the Government of the RK and the Government of the RF on cooperationIn creation of a business entity on the basis of the Orenburg Gas-Processing Plant of 3 October 2006.Agreement on conditions of transportation and supplies of processed gas to the domestic marketof the RK between JSC “NC “KazMunayGas” и ОJSC “Gazprom” of 3 October 2006.

Acquisition of foreign assets

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Refining and petrochemistry development

Refining capacity

The 1st stage of reconstruction of the Atyrau Refinerywas completed in 2006.

Output of a wide range of high quality products answering to the European standards was mastered.

This year KazMunayGas has acquired the right of parity management of the Shymkent Refinery.

It is planned to implement the up-to-date production standards.

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Acquisition of 75% share of the Rompetrol Group NV

In August of this year, KazMunayGas acquired 75% of the shares in The Rompetrol Group NV. The assets of this company include:- 2 refineries;- 630 FSs in seven European countries.

Refining and petrochemistry development

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Petrochemistry projects in Kazakhstan

Aromatic Hydrocarbons Complex

Products: basic petrochemical stocks – benzene, paraxylene

Capacity: 130 thousand tons of benzol, 500 thousand tons of p araxylene

Location: Atyrau Refinery (the city of Atyrau)

Completion time: 2011

Production of road asphalt

Products: road asphalt

Capacity: 420 thousand tons

Location: Aktau Plastic Plant in the city of Aktau

Completion time: 2009

The first petrochemical complex in Atyrau oblast

Products: polyethylene, polypropylene

Capacity: 800 thousand tons of polyethylene, 400 thousand to ns of polypropylene

Location: Karabatan station in Atyrau oblast

Completion time: 2012

Total Investments – USD 6 bln.

Refining and petrochemistry development

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� Implementation of international standards of financ ial reporting

� Compliance with ISO 9001, ISO 14001 international s tandards and OHSAS 18001 specifications

� Gaining of investment rating reflecting the efficie ncy and transparency of activity

� Entrance to the international stock market

� Balanced Scorecard implementation

� Implementation of best practices in the field of co rporate governance

� Constant professional development of specialists

Implementation of effective forms and methods of co rporate governance

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Environmental protection

Corporate system of ecological monitoring

Corporate system of ecological monitoring of JSC NC “KazMunayGas”aroused a great interest of the UNECE, which positively estimated an approach of the Company to organization of the internal system of ecological governance, development of the subsystem of ecological monitoring of the corporate geological informational system with great perspectives of its implementation at the companies of other countries.

Main goals of the corporate system of ecological mo nitoring:

� Obtaining updated information on the current environmental status for making adequate managerial decisions

� Creation and updating of data base on environmental status� Reporting automatization

Reports toState bodies

.

KazGeoKosmos

РД КМГ

JV’s -departments.

PSA -Dep-s KMG EP KMTenizICAKTO

РД КМГOperator

РД КМГOperator

Objects of monitoring

DDZ acceptance

Interpretation

Reports Reports

Reports ReportsReports

Reports

Отчеты

Операторов

Instrumental data

EP & LPDept.

- IT Dept.

MonitoringData

Monitoringdata

DataBase

Contract

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Thank you for your attention!

Contact info:

JSC «National Company «KazMunayGas»22, Kabanbay Batyr Ave, Astana, 010000, Republic of Kazakhstan

tel.: +7 (7172) 97 61 01fax: +7 (7172) 97 60 00, 97 60 01

e-mail: astana@kmg.kzhttp://www.kmg.kz