KazMunaiGas EP cuts output forecast due to strike

ALMATY, June 28 (Reuters) – KazMunaiGas Exploration Production (KMGq.L: Quote) expects to fall 4 percent short of its planned output target this year as a strike at a major field enters a second month, the company said on Tuesday.

KMG EP, the London-traded arm of Kazakh state oil and gas company KazMunaiGas [KMG.UL], said the strike at its Uzen field in western Kazakhstan had resulted in oil production losses of 150,000 tonnes to date. The strike began on May 26.

“The company now believes that annual production from the Uzen field will not reach the target level and will be lower by at least 600,000 tonnes,” KMG EP said in a statement.

KMG EP, Kazakhstan’s second-largest oil producer, had earlier forecast crude oil production of 13.5 million tonnes in 2011. The company last year produced 13.3 million tonnes, or approximately 270,000 barrels per day.

The company said that what it described as “small offsets” at other producing assets would also contribute to the 4 percent reduction in its previous forecast.

KMG EP said the number of protesters at the Uzen field in Mangistau region had fallen to 650 from a peak of 2,500 and that the company was ready to consider starting negotiations on the labour dispute after the “complete cessation of illegal protests”.

The strike is the second to affect the company’s operations in Mangistau region in the past two months. In May a strike reduced output at the Karazhanbasmunai oilfield, a joint venture between KMG EP and Chinese state-owned investment company CITIC
http://af.reuters.com/article/energyOilNews/idAFLDE75R09X20110628

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