By k on July 17, 2009

Moscow, July 16, 2009 -- Moody's Investors Service has assigned a
provisional rating of (P)Baa2 to an approximately USD 1.0 billion Note
issue for JSC National Company KazMunayGas ("KMG NC") issued by
KazMunaiGaz Finance Sub B.V. (the "Issuer"), a 100% owned subsidiary of
KMG NC, that acts as a Guarantor for the Notes. The obligations of the
Guarantor will rank at least pari passu with all senior unsecured and
unsubordinated obligations of the Guarantor. Therefore Note holders are
relying solely on KMG NC's credit profile to service and repay the debt.
The rating outlook is negative.

Upon a conclusive review of the transaction and associated documentation,
Moody's will assign a definitive rating to the Notes. A definitive
rating may differ from a provisional rating.

The Notes are expected to be placed in one USD denominated tranche with a
5 year maturity. The issue will be executed within the framework of a
Global Medium Term Note Programme for a total amount of USD 5 billion.
The proceeds raised from the Notes issue are expected to be on-lent by
the Issuer to KMG NC group with the main purpose of refinancing or
retiring existing indebtedness, particularly related to the debt of
Rompetrol and its various subsidiaries. 

Based on KMG NC's 2008 results, substantial cash reserves within the
group and the fact that a significant part of the proceeds from the Notes
issue will be used to refinance KMG NC group's existing debt obligations,
the agency believes that the proposed debt issuance can be accommodated
within the current rating category. Moody's also notes that the Notes
issue will lead to improvement of the KMG NC group's overall debt profile
by lengthening the average maturity of its debt portfolio while
alleviating liquidity pressure at the Rompetrol subsidiary level.

Moody's regards KMG NC as a government-related issuer (GRI) and thus
ratings incorporate uplift from KMG NC's baseline credit assessment of 12
(on a scale of 1 to 21 and equivalent to Ba2 rating) accounting for high
implied state support and the company's medium dependence.

KMG NC's ratings are underpinned by: (i) the company's strategic
importance in the Kazakh economy as it represents the state's strategic
interests in the oil and gas sector; (ii) its key position within the
Group where KMG NC fully controls or on a majority basis has equity
holdings in various Kazakhstan oil and gas sector companies; (iii) a
sizeable asset base including the strong market and competitive positions
of the company's subsidiaries; and (iv) KMG NC's oil and gas
transportation segments which provide the company with a degree of
diversification into utility-type earnings supported by relatively stable
and transparent regulatory policies and practices.

KMG NC's ratings nevertheless also reflect the overall transformational
risk relating to the company's consolidated business profile in view of
its aggressive acquisition strategy and large-scale investment projects,
its leveraged capitalisation structure and the liquidity risk related to
the group's ability to manage its sizable cash resources given the weak
state of the Kazakh banking system. 

The Negative outlook on the rating reflects the fact that a possible
downgrade of the sovereign rating -- which currently has a negative
outlook - would expectedly imply a downgrade of the KMG NC's ratings,
assuming the other inputs for the rating remain unchanged as well as the
fact that KMG NC's stand-alone profile is weakly positioned at this time
in its rating category.

The last rating action on KMG NC was on 7 July 2009 when Moody's confirmed
the company's Baa2 ratings with negative outlook.

The principal methodology used in this rating action is the Application
of Joint Default Analysis to Government Related Issuers, April 2005,
which can be found at moodys.com in the Credit Policy & Methodologies
directory, in the Ratings Methodologies sub-directory. Other
methodologies and factors related to the various industries that may have
been considered in the process of rating this issuer can also be found in
the Credit Policy & Methodologies directory.

KMG NC, headquartered in Astana, Kazakhstan, is a wholly-state-owned
(through the SamrukKazyna holding company) vertically integrated oil and
gas operator with core operations in exploration and production,
refining, domestic oil and gas transportation, and marketing and trading
of oil and petroleum products sectors. In 2008 the company generated
around USD21.0 billion in revenues and EBIT of USD6.6 billion.

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