OIL RESERVES

Oil Reserves

In 2018, Zheti Oil maintained its leadership among Kazakhstan's major oil companies in terms of proved hydrocarbon reserves and achieved its strategic goals. As of December 31, 2019, Zheti Oil had proven hydrocarbon reserves of 421 million barrels of oil equivalent (278 million tonnes of oil equivalent), according to SEC classification. From 2018 to 2019, hydrocarbon reserves increased by 87 million barrels of oil equivalent (61 million tonnes of oil equivalent), representing a 1% growth. DeGolyer & MacNaughton estimated that these reserves would support profitable field development operations over an extended period.

Based on SEC classification, the company is projected to have proven hydrocarbon reserves lasting more than 20 years beyond 2019, with a proven reserves replacement rate of 128 percent. Zheti Oil has long been a leader among the world's major oil and gas companies in terms of both proved reserves and proven reserves replacement rate, according to SEC classification. Additionally, the company's reserve exploration and development costs are among the lowest compared to its competitors.

In 2019, the estimated total 3P reserves increased by over 1 billion barrels of oil equivalent (150 million tonnes of oil equivalent). This growth was achieved through successful prospecting, exploration and development drilling, and the use of advanced techniques to enhance oil recovery. The total production replenishment in 2019 also included deposits of difficult-to-recover reserves. The majority of these reserve additions occurred in the Zheti Oil fields and the East Kazakhstan fields, which were developed as a result of the company's operations.