Kazakhstan’s KazMunaygaz has achieved record profitability in its oil and gas producing, refining, marketing and transport businesses, despite generally poor operational metrics.

The state-owned company said revenues grew by 39% to more than 3.1 trillion tenge ($7.3 billion) in the first half of this year from the same period of 2020.

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Net income, attributable to shareholders, rose sixfold to 644 billion tenge.

However, output actually fell by more than 5% in the gas and oil segments, with an average 4.1 billion cubic metres per day of gas and 445,000 barrels per day of oil produced in the first six months.

The company’s output includes oil and gas produced by its wholly owned subsidiaries and three major foreign-led ventures — Tengiz, Kashagan and Karachaganak — in which it has minority stakes.

The better profitability of KazMunaygaz has led to the generation of $685 million of free cash in the first half.

This, in turn, has reduced net long-term debt by more than 10% from 31 December 2020 to about $5.5 billion, with cash in hand jumping by 18% to $4.1 billion.

While transport of gas by subsidiary KazTransgaz and via transit pipelines across the country rose by 3% to 46.4 Bcm, oil transport volumes by another subsidiary, KazTransoil, dropped by 1% to about 1.5 million bpd.

Reflecting the pick-up of economic activity in Kazakhstan as Covid-19 restrictions were eased earlier this year, KazMunaygaz’s refining volumes increased by 17% to more 390,000 bpd.

In a separate environmental, social and governance report, the company said its direct expenses on mitigating the impact of the pandemic ran to about $14.6 million last year.

It has reduced its environmental footprint, with gas flaring falling by 28% to 57.6 million cubic metres last year.

Replacing ageing infield pipelines at onshore legacy fields helped reduce the volume of spilled oil by more than twice, to around 2100 barrels last year.

Direct carbon dioxide emissions in the upstream segment fell by 13% to 2 million tonnes in 2020, with this segment remaining the lowest source of greenhouse emissions compared with its oil and gas transportation and refining businesses.

Kazakhstan has yet to adopt domestic legislation to embrace global environmental concerns and motivate the industry to reduce GHG emissions, with KazMunaygaz’s progress based on voluntary initiatives.