Romanian authorities approve takeover of 51% in KMGI by China's CEFC

Romanian authorities approve takeover of 51% in KMGI by China's CEFC
By bne IntelliNews July 27, 2017

The Romanian authorities have approved the transaction through which China Energy Company (CEFC) is taking over 51% of KazMunayGas International (KMGI), the majority shareholder in Romania’s biggest oil refiner.

Kazakhstan’s state owned KazMunaiGas (KMG) and CEFC concluded an agreement in December last year on the sale of 51% of KMGI to the Chinese group. The deal had previously been in question after the refinery was seized by Romanian prosecutors in a probe into a historic debt conversion. 

After all the legal formalities are performed, the deal is expected to be finalised this autumn, KMGI said in a statement.

According to the agreement between KMG and CEFC, the Chinese company undertakes a series of obligations and investments in the development of new projects in Romania, the European Union and Silk Route neighboring countries. At the same time, KMG will continue to deliver crude oil to KMGI's subsidiaries in order to support and expand its core operations in Europe, KMGI said.

"Completion of the transaction will create a solid foundation for cooperation between KMG and CEFC, which will further expand the activities of KMGI in Eastern and Western Europe, as well as in other regions of the world," KMGI CEO Zhanat Tussupbekov said.

"The joint venture will be able to take advantage of the energy potential of Kazakhstan and China's financial resources to expand its activities throughout the area of the global project 'One Belt - One Way'," Tussupbekov added. 

CEFC is ready to contribute $3bn to finance the expansion of KMGI, formerly Rompetrol Group, as soon as it becomes the majority owner and the five-year development plan is endorsed, Agerpres reported quoting CEFC board member Du Liefen speaking in Astana earlier this month.

The money would be used for upgrading the existing assets but also for the purchase of new assets, Du Liefen said. In January, KMGI senior vice-president Alexey Golovin told Bloomberg that there are plans to increase refinery’s capacity to 7-8mn tonnes from 5mn tonnes currently. 

Related Articles

UAE’s Masdar, Uzbekhydroenergo partner up to evaluate potential of national hydro power storage

United Arab Emirates renewable energy company Masdar has partnered with Uzbekhydroenergo to evaluate the potential of national hydroelectric power storage projects. Masdar and Uzbekhydroenergo, a ... more

Uzbekistan to build $10bn chemicals production complex by 2028 in Khorezm

Uzbekistan has announced plans to build a $10bn chemicals production complex by 2028. The 2.5mn tonne/year set of installations would be built in northwestern Khorezm region, President Shavkat ... more

Shadowy Russia firm reportedly switches 60% stake in Uzbek gas storage facility to Hong Kong entity as Tashkent reacts to sanctions jitters

A shadowy Russian company has transferred its controlling stake in Uzbekistan's largest underground gas storage facility to a Hong Kong-registered holding company as Tashkent moves to prevent ... more

Dismiss