New York, 7 December 2011

National Company “KazMunayGas”:Role of Foreign Investment in

Development of Oil & Gas Projects

Switzerland

Canada

China

Russia

Italy

Virgin Islands (British)

France

Great Britain

USA

Netherlands

0 5000 10000 15000 20000 25000 30000 35000

4,272.10

4,745.20

5,031.10

5,093.80

5,519.00

7,119.20

8,291.40

10,718.20

21,773.60

31,361.80

2

Foreign Investment in Republic of Kazakhstan(from 1993 through 2nd half of 2011)

Political stability and favorable investment climate have been promoting a considerable inflow of foreign direct investment in Kazakhstan.From 1993 through 2nd half of 2011, 136 bn USD of investment were attracted to the country.

Largest Investing CountriesInvestment Inflow Dynamics

Western countries account for the bulk of direct investment: the Netherlands rank first - over 31 bn USD, followed by the U.S. - 21.7 bn USD.The main direction of investment is connected with subsoil use, energy and infrastructure projects.

mn USD

mn USD

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 IIQ 2011

0

5000

10000

15000

20000

25000

1,271660 984

1,6742,1071,233

1,8522,781

4,5574,1064,624

8,317

6,619

10,624

18,453

19,76019,138

18,076

9,997

3

Development of Kazakhstan's Oil & Gas Industry

Oil reserves, bn tons: 1991 – 2.8 2010 – 5.5 Natural gas reserves, tcm: 1991 – 1.8 2010 – более 3.0

Growth in the proven oil and natural gas reserves

Oil production in 2010 in the world and the Republic of Kazakhstan

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0

100

200

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Mn tons

130 mn tons by 2020

Oil production in Kazakhstan

0

20

40

60

80

100

120

140

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2015 2020

Mn tons

4

Major Oil & Gas Projects - Tengiz Project

Since 1993, TCO's oil uplift has exceeded 200 mn tons

In April, 1993 the "century's contract" was made - a long-term 40-years agreement with Chevron on establishing LLP “Tengizchevroil” (TCO) was signed.

TCO partners: KMG (20%), Chevron (50%), ExxonMobil (25%), LUKArco (5%)

In-place reserves: 3.5 bn tons (25 bn bbl) of oil, over 700 bcm of gas

In 2007 TCO successfully implemented the "SGP/SGI" projects, providing for oil production growth from 13 to 25 mn tons

Currently the alternatives of the Future Growth Concept aimed for further increase in production are being considered

Добыча нефти

1,9 2,55,0

7,0 8,5 9,6 10,512,5 13,1 12,8 13,7 13,6 13,3 13,9

17,8

25,9

22,5

1,50

5

10

15

20

25

30

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

млн. тоннOil Production

mn tons

5

Major Oil & Gas Projects - Karachaganak Project

The agreement on sharing production at the Karachaganak field was signed in March, 1995.

Final production sharing agreement (FPSA) for a term of 40 years was signed in November, 1997

Partners: Agip (32.5%), BG (32.5%), Chevron (20%), LUKoil (15%)

In-place reserves: 1.5 bn tons (9 bn bbl) of liquid hydrocarbons, 1,300 bcm of gas

3,64,7

3,84,8

5,8

9,1

11,5 11,9

14,215,0 15,6 15,0

2,3

0

2

4

6

8

10

12

14

16

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

млрд. м3

Production of liquid hydrocarbons

Gas production

3,44,6 4,0

5,2 5,9

8,510,3 10,4

11,411,6 11,6 11,9

2,1

0

2

4

6

8

10

12

14

16

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

млн. тоннmn tons bcm

6

Major Oil & Gas Projects - North-Caspian ProjectIn November, 1997 the Consortium partners and the government of Kazakhstan signed a Production Sharing Agreement (PSA), providing for exploration and production of hydrocarbons at 11 blocks with a total area of around 5,600 km2. Such shelf structures as the gigantic Kashagan, Kashagan South-West, Kalamkas, Kairan and Aktoty were discovered within the blocks.

Exploration well produced a positive result: • on Kashagan - on 30 June 2000• on Kalamkas-more - on 3 September 2002• on Kashagan South-West - 10 August 2003• on Aktoty - 2 September 2003• on Kairan - 10 September 2003

Reserves, mn tonsDeposit in-place recoverable

Kashagan (oil) 4,850 1,475.5

Kalamkas-more (oil) 114.2 31.9

Kashagan South-West (condensate) 20 6

Aktoty (condensate) 156 77

Kairan (oil) 112 36

NCP's total 5,252.2 1,626.4

7

Offshore Oil Projects - "N" Block

"N" area is located on the Southern part of the Kazakhstan sector of the Caspian Sea and occupies a total area of 8,184 km2

Water depth is 30-375 m, distance to shore - 15-90 kmIn-place reserves - 630 mn tons, recoverable - 270 mn tons

Project participants:

JSC NC “KazMunayGas” – 51%

ConocoPhillips – 24.5%

Mubadala – 24.5%

The Heads of Agreement, under which the parties agreed on the commercial term sheet for joint implementation of the "N" project, were signed on 5 December 2008 .

8

Diversification of Oil Transportation Routes

"Caspian Pipeline Consortium" oil pipeline

• Agreement between Kazakhstan, Russia, Oman, and Consortium of international oil companies on construction of the "CPC" pipeline was signed in April, 1996.

• Oil pipeline length: 1,510 km• Commissioned: 2001• 1 July 2011 - beginning of

construction under the Project for expansion of CPC up to 67 mn tons (52.5 mn tons of oil from the Republic of Kazakhstan)

"Kazakhstan-China" Oil Pipeline

Over the 20 year of independence of the Republic of Kazakhstan: oil exports volumes have increased from 13 to 71 mn tons annually about 4,000 km of oil pipelines constructed pipeline exports volumes increased from 10 to 58 mn tons annually

Implementation of the Kazakhstan-China oil pipeline expansion (phase II) will make it possible to increase the throughput capacity to 20 mn tons annually

Oil transportation, mn tons 2010 "CPC" oil pipeline

29,9 "Atyrau-Samara" oil pipeline

15,3 "Kazakhstan-China" oil pipeline

10,0

"Kazakhstan Caspian Transportation System" ProjectNeed for KCTS's export capacity will arise by the time of implementation of Phase 2 of the Kashagan field development

Existing routes

Planned routes

9

Diversification of Gas Transportation Routes

In December, 2009 the first line of the first stage of the "Kazakhstan-China" gas pipeline was commissioned, which is part of the cross-border "Turkmenistan-Uzbekistan-Kazakhstan-China" gas pipeline.

"Kazakhstan-China" gas pipeline

"Beineu-Bozoi-Shymkent" gas pipelineDevelopment stages: Stage I / Bozoi-Shymkent section - capacity of up to 6 bcm annually

Stage II / Beineu-Bozoi section - capacity of up to 10 bcm annually

Beineu-Bozoi-Shymkent gas pipeline

Beineu

Shymkent

BozoiTurkmenistan-Uzbekistan-Kazakhstan-China

Gas Pipeline

Russia

China

Kazakhstan

KyrgyzstanUzbekistan

TurkmenistanTajikistan

10

Projects for Reconstruction and Modernization of Kazakhstan's Refineries

Implementation of the State Program for Boosted Industrial-and-Innovation-Based Development and the Program for Development of the Oil and Gas Industry of the Republic of Kazakhstan for 2010-2014 will make it possible to :

increase the average complexity index of Kazakhstan's refineries to the global indicator of 10.2

increase the crude processing depth up to 90% raise the quality of motor fuels to Euro-4, Euro-5

Investment projects: "Construction of the Aromatics Production Complex in the Atyrau Refinery" "Construction of the Deeper Oil Conversion Complex in the Atyrau Refinery" "Reconstruction and Modernization of the Pavlodar PCP" "Reconstruction and Modernization of the PKOP Refinery" (Shymkent Refinery) "Road Bitumens Production in the Aktau Plastic Plant"

Name Before reconstruction After reconstruction Change (+/-)Oil refining 13,683 19,000 +5,317Mogas 2,871 6,722 + 3,851Jet fuel 484 958 +474Diesel 4,052 5,919 +1,867Fuel oil  3,566 1,499 -2,067Processing depth 66% 90% 24% increaseOil products quality Euro-2 Euro-4, Euro-5 -

тыс. тоннAnticipated results of reconstructing the refineries:

11

Projects for Reconstruction and Modernization of Kazakhstan's Refineries Atyrau Refinery Shymkent Refinery Pavlodar PCP"Construction of the Aromatics Production Complex" Project

• Increase in the refinery's balanced capacity from 4.3 to 5.0 mn tons annually

• Increase in the volume of production of high-octane gasoline (Euro-3 standard)

• Production of petrochemical feedstocks (benzene, paraxylene).

Project costs: 1.13 bn USDProject implementation period: 2013

"Construction of the Deeper Oil Conversion Complex" Project

• Increase in the refinery's balanced capacity up to 5.5 MMtpa

• Increase in the production of high-octane gasoline, jet fuel and diesel

• Increase in the processing depth up to 87%• Raising the quality of motor fuels (Euro-4,

Euro-5 standards)Project costs: 1.7 bn USDProject implementation period: 2015

Anticipated effect from reconstruction and modernization: • Recovery of the designed refining

capacity to 6 mn tons annually • Increase in the crude processing

depth up to 90% • Raising the quality of oil products

(Euro-4, Euro-5 standards)• Reduction in atmospheric emissions

of pollutantsPreliminary project costs: 1.45 bn USDImplementation period: 2015

Anticipated effect from reconstruction and modernization: • Increase in the refinery's designed

capacity up to 7.5 MMtpa.• Increase in the crude processing

depth up to 90%. • Raising the quality of oil products

(Euro-4, Euro-5 standards)• Reduction in atmospheric emissions

of pollutantsPreliminary project costs: 1.7 bn USDImplementation period: 2015

First stage of the Atyrau Refinery reconstruction project, completed in 2006, has made it possible to replace the obsolete and worn-out equipment, increase the oil conversion ratio to 61%, improve the quality of gasoline and diesel to the Euro-2 environmental standard, increase production of jet fuel and reduce the adverse environmental impact. Total amount of assimilated funds has amounted to 396 mn USD.

12

JSC NC “KazMunayGas”

Production of crude oil and gas condensate 21.9 mn tons 28.0 % Gas production 4.9 bcm 13.1 % Oil refining 15.1 mn tons 83.2 % Pipeline oil transportation 65.8 mn tons 76.4 % Pipeline natural gas transportation 99.4 bcm 95.7 %

Key indicators 2010 Share on the RoK's market

KazMunayGas is the national operator for exploration, production, refining and transportation of hydrocarbons, representing the state in Kazakhstan's oil-and-gas sector.

The company was incorporated through the merger of National Oil and Gas Company "Kazakhoil" and National Company "Oil and Gas Transportation", based on the Decree dated 20 February 2002 of the President of the Republic of Kazakhstan.

JSC "National Wealth Fund “Samruk-Kazyna" owns 100% of the company's shares.

Processing and marketing of crude and oil products

Support services for the oil & gas industry

Corporate governance

Processing and marketing of crude and oil products

Support services for the oil & gas industry

Corporate governance

Key focus areas

Oil and gas upstream Oil transportation Gas transportation and marketing

Oil and gas upstream Oil transportation Gas transportation and marketing

According to the rating assigned by the Energy Intelligence agency, in 2010 KazMunayGas ranked 36th among the world's top 100 oil & gas companies, climbing 5 positions from the 41st

place in 2009.

163,7

127,2

99,4

110,8

13

69,5

66,5

65,8

30,32002

2010

2015

2020

Oil transportation, mn tons

Without taking CPC into account

19,8

19,4

15,1

2,3

33,7

24,3

22,0

10,62002

2010

2015

2020

Key Strategic Indicators for 2011-2020Oil production, mn tons Oil refining, mn tons

The goal of JSC NC "KazMunayGas" is to join the world's top 30 oil & gas companies, by pursuing the strategy of balanced growth in the sectors of oil and gas upstream, gas transportation and marketing, oil transportation, oil refining and marketing of crude oil and oil products

JSC NC "KazMunayGas" - Long-term Development Strategy

KazMunayGas is planning to implement an extensive investment programme: • the amount of capital expenditures will amount to about 20 bn USD by 2015• around 9.5 bn USD will be required for refinancing the existing loans• the additional debt financing requirement will amount to about 8 bn USD by up to 2016. The role of KazMunayGas and the scale of its investment create a number of opportunities for mutually beneficial cooperation with investors and financial institutions. The basic tools for attracting finance for the company are bank loans and issue of Eurobonds. Currently, the amount of Eurobonds issue is 7.25 bn USD.

Investment programme

Gas transportation, bcm

14

Thank you for attention!

JSC “National Company “KazMunayGas”19, Kabanbay batyr Ave.,

010000, Astana, Republic of Kazakhstan tel.: +7 (7172) 97-61-01,

fax: +7 (7172) 97-60-00, 97-60-01e-mail: Astana@kmg.kzhttp://www.kmg.kz