ALMATY, Dec 14 (Reuters) - KazMunaiGas Exploration & Production plans to increase capital expe
nditure by 15 percent next year as it steps up drilling and exploration to bolster its position as Kazakhstan's No. 2 oil producer.
KMG EP, the London-listed unit of Kazakh state oil and gas company KazMunaiGas, said in a statement that it plans capital expenditure of $661 million next year, as well as higher production at its main assets in Kazakhstan.
'A lot of work that involves, in particular, increasing capital investment in 2011 will bear fruit in the medium term,' Chief Executive Kenzhebek Ibrashev said in the statement.
KMG EP said it would double its exploration budget next year to $55 million from $27 million, while also increasing drilling to include 239 wells from 213.
The company, in line with Kazakhstan's budget, assumes an average Brent crude price of $65 per barrel next year. Brent is currently trading at slightly above $91 per barrel.
KMG EP said it planned to increase production next year at its core assets, Embamunaigas and Uzenmunaigas, to 9.1 million tonnes, or 183,000 barrels per day (bpd). This year's comparative output target is 8.8 million tonnes, or 177,000 bpd.
In the statement accompanying approval of its 2011 budget, KMG EP did not give a forecast for its overall production.
Ibrashev told Reuters in an interview in October that the company expects to boost 2011 output by 25 percent to 17 million tonnes, or 340,500 bpd, after acquiring new assets.
(Reporting by Robin Paxton; Editing by Hans Peters) Keywords: KAZMUNAIGASEP/
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