UPSTREAM BUSINESS UNIT OVERVIEW
Exploration and Appraisal
In the 2nd Quarter of 2008, 7 exploration and 1 appraisal wells were drilled. One of these wells was drilled in the Karaganda Block (Contract #1928), 3 wells under License 260D-1, 3 wells under License 951D and 1 under License 1504. Good oil and gas shows were found in the Karabulak-2 well located in the western part of the Karaganda Block. The well is waiting for testing. The Doshchan-14 well located in the Doshchan Block under License 951D has been tested for commercial oil stream at 101.7m3 per day. Good signs of oil and gas were found in the foundation of the Kyzylkiya-72 well within License 1504.
In the 2nd Quarter, 2008, they continued to collect 2D and 3D data under Licenses 951D, 260D-1 and 1057. As of the end of July the total scope of 2D and 3D seismic surveys was 1,118 km and 328 km2 respectively.
In the 3rd Quarter is it planned to cover 422 km2 with 3D seismic surveys and drill 7 wells.

Field Development Projects
In the 2nd Quarter, 2008, oil was produced from 5 wells of the North Nuraly oil field. The crude oil production totaled 14.173 thousand tons.
In the 2nd Quarter the re-estimation of reserves for the Kumkol oil field was completed and submitted to TU Yuzhkaznedra for review.

Oil Fields and Licensed Territories
The Draft Contract for hydrocarbon production at the North-West Kyzylkiya oil field, the mining lease and financial and economic model have been provided for review to the Ministry of Energy and Mineral Resources.

Production
In the 2nd Quarter of 2008 the overall production of PetroKazakhstan Inc. (i.e. including PKKR, 50% shares in Kazgermunai JV and Turgai Petroleum JV) totaled 1.605 million tons of crude oil (12.430 million barrels) versus 1.719 million tons of crude oil (13.314 million barrels) in the 2nd Quarter of the last year.

Gas Utilization Projects
Maibulak gas utilization project is in progress. Installation of the major equipment as booster and injection compressors, additional gas treatment units for power generation station and construction of process lines and racks started.
Construction of the 1st Site under Kumkol Gas Utilization Phase II Project started as well: gas gathering lines construction from group stations to new gas  compression station is underway. Engineering of the other 4 sites is completed, construction tendering is under completion.
In the 3rd quarter construction of all facilities will be continued.

DOWNSTREAM BUSINESS UNIT OVERVIEW
Oil Refining
In the 2nd Quarter, 2008, the Shymkent Refinery processed 1,147,506 tons of crude oil (8.83 million barrels) versus 1,070,165 tons (8.23 million barrels) processed in the 2nd Quarter, 2007. The overall crude oil processing in the first half of 2008 totaled 2,237,575 tons vs. planned 2,210,000 tons, which is 1.07% higher than in the similar period of 2007, when the processing was 2,093,635 tons.
Jet fuel yield in the 2nd Quarter was 6.11% compared with 4.28% in the similar period of 2007. The high-octane gasoline portion in the total gasoline pool totaled 63.42% versus 55.72 in the 2nd Quarter of 2007. Beginning from May 2008 PetroKazakhstan Oil Products started to produce a new grade of diesel: DTL +5.
In the second half of 2008 crude oil refining will be 1,863,000 tons, while the approved 2008 plan is 4,100,000 tons.
The work on strategic plans of the Shymkent Refinery modernization and revamp was continued in the 2nd Quarter, 2008. The scheduled turnaround shutdown is planned from October 5 through November 5.

PetroKazakhstan is a vertically integrated energy group owned by China National Petroleum Corporation as well as KazMunaiGas National Company, which deals with acquisitions, exploration, development and production of oil and gas, oil refining and sales of crude oil and refined products.

For more details please contact:

PetroKazakhstan Press Service
Grand Asia BC, RK, Almaty, 155а Tole bi str.
Tel. (727) 258 18 48 / Fax (727) 258 18 60
aida.abduldayeva@petrokazakhstan.com