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KMGI to expand petrol station network in Romania, Bulgaria once legal issues resolved

August 11/2017

MOSCOW (MRC) Ч Oil refiner KMG International (KMGI) wants to open more petrol stations in Romania and Bulgaria and is on the lookout for acquisitions in central Europe once its legal problems are resolved, a company executive told Reuters.

KMGI is controlled by Kazakhstan's state oil and gas company, KazMunayGaz, but its main assets are in Romania as it holds a controlling stake in Rompetrol Rafinare, which owns the Petromidia and Vega refineries, and Rompetrol Petrochemicals.

The Petromidia refinery on the Black Sea was seized by Romanian authorities in 2016 as part of an investigation into Rompetrol's initial privatisation in 2000. KazMunayGaz acquired the company in 2007. Alexey Golovin, KMGI strategy and corporate development vice president, said the legal issues were making it difficult for KMGI to secure financing.

"The total amount of assets seized is USD1 B, which we perceive as excessive," Golovin told Reuters in an interview on Wednesday.

"This does not affect our day-to-day operations, but we cannot use them as leverage to acquire financing lines, which are like lifeblood for any company."

CEFC China Energy is buying a 51% stake in KMGI in a deal expected to go through in the next few months. It will be co-owner with KazMunayGaz and has committed to pour USD3 B into the group over five years, but there would be little incentive to invest before legal problems are solved.

Golovin said the asset seizure would be in place at least until the first court hearing into Rompetrol's privatization case, a date for which has yet to be set. A Bucharest court rejected KMGI's request to have the seizure lifted last year.

Author:Anna Larionova
Tags:petroleum products, gas processing, petrochemistry, Crude oil.
Category:General News
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