KazMunayGaz, the state-run oil and gas holding company, reported significantly improved financial and operational results for the first nine months of the year, driven primarily by a major production increase at the Chevron-led Tengiz field.

Tengiz Project Performance

A sharp output increase at the Tengiz oilfield development was the central driver of growth. This followed the successful start-up of a $47 billion capacity expansion project in January. KazMunayGaz's equity share of production grew to 178,000 barrels per day, a 42% increase compared to the same period a year earlier. The company holds a 20% stake in the project. Associated gas output also rose substantially, by over 49%, with KazMunayGaz's share reaching almost 3.5 billion cubic metres.

Financial Results

Despite a lower price environment for hydrocarbons, the increased production from Tengiz led to strong financial gains. Consolidated revenue grew by 11% year-on-year to nearly 7.1 trillion tenge ($13.6 billion). Consolidated net income saw an even larger increase, rising by 16% to 1.2 trillion tenge. Cash generation was significantly boosted by a 763 billion tenge dividend payment from Tengiz and other joint ventures, representing a 37% increase from the previous year. Consequently, the company's net debt fell by 57% to 496 billion tenge, while its cash and equivalents grew by 29% to over 3.6 trillion tenge.

Other Key Projects

The performance at Kazakhstan's other major oil developments was mixed. At the Kashagan field, the country's second-largest development, KazMunayGaz's equity production fell by 2% to 66,000 barrels per day. This decline was attributed to the operator having to curtail output due to the production of higher volumes of associated gas. The company holds a 16.9% stake in Kashagan. In contrast, production at the Karachaganak field, the third-largest development, saw KazMunayGaz's equity share grow by over 3% year-on-year to 24,000 barrels per day of condensate. The company holds a 10% stake in this project.

Caspian Pipeline Consortium

The increased production from Tengiz also resulted in higher equity revenues for KazMunayGaz from the Caspian Pipeline Consortium (CPC). The CPC operates the dedicated pipeline that handles over 80% of Kazakh oil exports, transporting crude from the Tengiz field to a marine terminal on the Black Sea near the Russian port of Novorossiysk. KazMunayGaz holds a combined 20.75% stake in the consortium.