State-owned Kazakh companies to reconsider plans due to fall in oil prices

ASTANA. KAZINFORM - In response to falling world oil prices, the state owned companies of Kazakhstan, which enter the structure of the National Welfare Fund Samruk-Kazyna will reconsider their plans and forecasts for the future, the Financial Officer - Member of the Board Nurlan Rakhmetov told Trend.

"Expenditures, costs on investment projects will be cut," he said. "It's inevitable."

He said that these plans are reviewed now.

"The situation got worse even when we were preparing the plans at the end of 2014, and we considered these negative trends in our plans," said Rakhmetov. "But what began to happen in late December 2014-early January 2015, forces us to rethink even optimized plans."

This issue is currently under review with the participation of representatives of industry companies and subsidiaries, according to the financial director of the fund. On January 19, 2015 Samruk-Kazyna held an expanded meeting on the level of the first leaders of the company, where solutions to these issues were discussed.

Substantial reductions in both revenue and expenditure parts are also planned, he said.

At the same time, major investment projects, which the country's economy depend on, will be implemented, and Samruk-Kazyna will try not to allow delays in their implementation, according to Rakhmetov. These projects include infrastructure ones, namely the construction of railways and pipelines, as well as projects related to the modernization of the state refineries, he said.

He went on to add that the shareholder of the Fund Samruk-Kazyna - the government of Kazakhstan - is currently considering the question of clarifying the state budget.

World oil prices fell almost from $110 per barrel to below $50 in recent months, and their fall continues. Oil revenues are the main source of income of Kazakhstan.

National Welfare Fund Samruk-Kazyna was created in accordance with the decree of the President of Kazakhstan in 2008 to improve the competitiveness and sustainability of the national economy. The Foundation brings together completely all state-owned assets of Kazakhstan and manages these assets on behalf of the government. KazMunaiGas NC JSC, the railway operator - Kazakhstan Temir Zholy JSC, Kazakhstan Electricity Grid Operating Company JSC (KEGOC), communication operator - Kazakhtelecom JSC, National Atomic Company Kazatomprom JSC are among these assets.

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