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Introduction & Market Context
Kazakhstan’s national oil company KazMunayGas (KMGZ) delivered strong operational performance in the first half of 2025 despite facing headwinds from lower global oil prices. According to the company’s August 2025 presentation, KMG managed to increase production volumes and maintain stable EBITDA growth while significantly reducing its debt burden.
The macroeconomic environment presented mixed conditions for KMG’s operations. While Kazakhstan’s GDP growth accelerated to 6.2% from 3.3% a year earlier, the company faced lower oil prices, with Dated Brent averaging $71.9 per barrel in 1H 2025, down 14.5% from $84.1 in the same period of 2024. The Kazakh tenge also weakened against the US dollar, with the average exchange rate moving from 449.09 to 512.05 USDKZT.
As shown in the following chart of macroeconomic indicators and oil prices:
Operational Performance Highlights
KMG demonstrated robust operational growth across its production and refining segments. Oil and gas condensate production reached 13.0 million tonnes (549 kbopd) in the first half of 2025, representing an 8.8% increase year-over-year. Gas production showed even stronger growth, rising 18.3% to 5,726 million cubic meters.
While oil transportation volumes remained relatively stable at 41.6 million tonnes (down 0.3%), the company’s refining segment posted impressive growth of 16.5%, processing 10.4 million tonnes during the period. This growth was supported by high capacity utilization rates at key refineries, with the Atyrau and Shymkent facilities operating above 100% of nominal capacity.
The following chart illustrates KMG’s key operational metrics for 1H 2025 compared to the previous year:
A more detailed breakdown of the company’s operational results by asset reveals the contributions from various production facilities, transportation routes, and refineries:
Financial Analysis
Despite the 14.5% drop in Brent crude prices, KMG managed to limit its revenue decline to 6.9%, reporting $8.8 billion for the first half of 2025. More impressively, the company increased its EBITDA by 1.8% to $2.23 billion, demonstrating effective cost management and operational efficiency.
Free cash flow remained strong at $1.33 billion, down just 1.0% from the previous year, while capital expenditures decreased by 14.7% to $512 million. The company received $926 million in dividends from joint ventures and associates, up from $689 million in 1H 2024, providing significant support to cash flow.
KMG’s financial position strengthened considerably during the period, with net debt declining by 30.2% to $1.55 billion. Cash and deposits increased to $5.95 billion as of June 30, 2025, positioning the company well for future investments and dividend payments.
The following chart provides a detailed view of KMG’s EBITDA by segment and free cash flow:
The company’s cash flow sources and uses are illustrated in this waterfall chart:
Strategic Position & Debt Management
KMG maintains a well-balanced debt portfolio, with 84% in bonds and 16% in loans. The debt is primarily denominated in US dollars (71%), with 23% in Kazakh tenge and 5% in other currencies. The company’s debt management strategy has resulted in a significant reduction in net debt, improving its financial flexibility.
As shown in the following debt structure breakdown:
The company’s ownership structure remains stable, with national wealth fund Samruk Kazyna holding 67.42%, the Ministry of Finance 20.0%, the National Bank of Kazakhstan 9.58%, and a free float of 3.0%. KMG continues to position itself as Kazakhstan’s flagship energy company, with unique access to development of new fields and strategic transportation routes to major markets in Europe and China.
KMG’s segmented EBITDA analysis reveals that the upstream segment remains the primary profit driver, contributing $1,107 million in operating EBITDA for 1H 2025, while the downstream segment generated $355 million:
Forward Outlook & Dividend Policy
KMG projects consistent dividend payments of 300 billion tenge annually for 2023-2025, representing approximately 25-30% of free cash flow. This dividend policy reflects the company’s commitment to returning value to shareholders while maintaining financial flexibility for future investments.
The company’s share price stood at 20,130 tenge as of August 14, 2025, and the current fundamentals show a 52-week range of 11,490 to 21,000 tenge, indicating that the stock is trading near its yearly high despite the challenging oil price environment.
As global oil markets continue to face price volatility, KMG’s operational growth and strengthened balance sheet position the company well to navigate future challenges. The company’s diversified asset portfolio across the entire oil and gas value chain provides resilience against market fluctuations, while its strategic position as Kazakhstan’s national oil company ensures continued access to the country’s substantial hydrocarbon resources.
The dividend payment history and share price dynamics are illustrated in the following chart:
Full presentation:
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