KazMunayGas remains inactive despite the necessity to find a new owner for its Romanian subsidiary

The company dismissed rumors that it was searching for a business partner / Photo: kmginternational.com and Shutterstock

KazMunayGas (KMG) has to sell its Romanian subsidiary KMG International by the end of this year as the company has been included in the Complex Privatization Plan for 2021-2025.

In response, to media reports about its negotiations with potential buyers for KMG International, KMG said that «it is currently neither conducting any measures related to privatization of the asset, nor negotiating with any potential business partners.»

Under the Complex Privatization Plan, KMG International must be sold within 2023-2024. This means that the company must be sold until the end of this year. There are three options for the deal, according to the document: open two-staged bidding, online bidding and direct sale.

The key asset of KMG International is Rompetrol, a Romanian company that controls Petromidia and Vega, the two largest oil refineries in Romania and a petrochemical complex that produces polymers. Also, the company runs more than 1,100 salespoints in Moldova, Bulgaria and Georgia.

Last year, Rompetrol Rafinare reported $270 million in losses due to significant devaluation of operational assets (82% or $223 million).

This process was mainly driven by a decline in the profitability of the oil refinery business in Europe, lower demand for oil products, an increase in the weighted average cost of capital and new solidarity and turnover taxes in Romania.

It wasn’t the first time Rompetrol Rafinare reported financial losses. Over the period from 2019 to 2023, the company reported $705 million in consolidated net losses due to geopolitical tensions and the COVID-19 pandemic. The only exception was 2022, when the company reported $90 million in net revenue.

In June 2023, Petromidia was hit with a powerful explosion. The fire was knocked out on the same day with no leaks of dangerous substances.

Along with Rompetrol, KMG International also controls Rominserv, Dyneff (a gas station network in Europe), Byron Shipping SRL (a shipping company) and Hei (a network of stores within gas stations), among other assets.