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.