A transaction between National Company KazMunayGas (KMG) and China Energy Company Limited (CEFC) received the approval of the Romanian officials, KazMunayGas International announced in a press release on Thursday.
According to the release, the shareholding in the new KMGI joint-venture will be 49 percent for KMG and 51 percent for CEFC.
“The completion of the transaction will allow setting a solid foundation of cooperation between KMG and CEFC, facilitating the subsequent extension of KMGI to Eastern and Western Europe, as well as other regions of the world. This joint venture will benefit from the potential of energy resources of Kazakhstan and China’s financial resources, for the expansion of the activities in the context of the “One belt, one road” global project. The project represents an outstanding opportunity for KMGI from the perspective of extending its operations in the Republic of Kazakhstan, which, in turn, will ensure the implementing of the governmental programmes for drawing investment. A special attention will be granted to the projects in Romania, which is the state where KMGI holds the main assets. In conclusion, it is to be noted that this global project will have multiplying effects in the economies of the participating countries – Romania, Kazakhstan, China – as well as a positive social impact,” KMG International CEO Zhanat Tussupbekov (photo) says.
According to the group, KMGI thus becomes a platform for the development of a strategic partnership in the energy sector in Western and Eastern Europe, which will ensure both an increase in the group’s operation and financial performance and an expansion of activities and operations carried out by CEFC on an international level.
In December 2016, the agreement was signed between KMG and CEFC on the sale of the 51 percent package of the KMGI Group shares, which owns an conducts crude and oil products refining, trading and distribution through its own network of Rompetrol petrol stations in Romania, Bulgaria, Moldova, Georgia, as well as through its partners in the Black Sea region.
CEFC has recently received approval from the Supreme Council for National Defence and the confirmation of the Competition Council to complete the transaction of taking over the KMG International majority share package. The approvals received from the Romanian authorities in charge represent an important stage in conducting the transaction procedures, therefore, after all legal steps are taken, it can be concluded this autumn.
The agreement between KMG and CEFC shows that the Chinese side will conduct investments in developing new projects in Romania, the European Union and the Silk Road adjacent countries. At the same time, KMG will continue to supply crude to its KMGI subsidiary in order to support and extend its basic operations in Europe.
Fully-owned by KazMunayGas oil company of Kazakhstan, KazMunayGas International is operational in 11 countries and owns the refineries Petromidia Navodari (the largest such unit in Romania) and Vega Ploiesti (the oldest refinery still operating), as well as the fuel distribution networks (Rompetrol) in Romania, Bulgaria, Moldova, Georgia, France and Spain.
CEFC is a private business conglomerate in the area of energy and finance. CEFC holds two groups and seven investment companies, a top company listed on the stock market in China, and shares in many international companies listed on the stock exchange.
The group counts round 30,000 employees in 23 countries worldwide, and, in 2016, it reported 38.9 billion euro operational revenues.