China Energy Company Ltd. (CEFC), the future major shareholder of KazMunayGas International, intends to make investments to improve the existing assets of KMGI (the former Rompetrol Group), but also to acquire new assets, thereby providing three billion dollars in investments, after the five-year business plan would be established, Du Liefen, board director of CEFC said last week during a meeting with the Romanian press at the Expo Astana 2017.
"CEFC has promised that when the five-year business plan will be instituted, then CEFC will provide funding worth $ 3 billion in a 5-10 years period." These resources and capital will help KMGI become an energy and investment platform in the next 5 to 10 years. This capital will not only be used to improve existing assets, but also acquire new assets in order to make the business more efficient," said Du Liefen.
She said that this cooperation between CEFC and KazMunayGas International could "complement" the strengths of each and could contribute not only to Romania's economic value, but also bring employment opportunities, also stressing that she expects from the Romanian government to assure political and economic stability.
"What we hope from the Romanian government is a stable political and economic environment. In this sense, the complementary advantages between the two companies will surely bring about a better development of KMGI. This improvement in the capacity of KMGI refinery will, of course, result into more taxes collected and more value for the energy system of supply and demand in Romania," said Du Liefen.
With regard to the areas where CEFC is interested in investing in KMGI, Du Liefen mentioned the distribution field.
"As you probably know, the refining capacity of KMGI is higher than its retail capacity. We hope KMGI has a more reasonable retail chain, the Romanian government can offer more places where KMGI can build gas stations, this could give us more opportunities to invest in gas stations and natural gas network as well as in logistics. The balance between refining and marketing can be a more reasonable one," the CEFC official explained.
Highlighting the impact of CEFC's investment, Du Liefen offered as example Dyneff's case, where they acquired, in December 2015, a 51% stake from KMGI. According to her claims, in a year and a half Dyneff's performance improved significantly, in 2016 the sales volume exceeding three million cubic meters, up 9% from 2015, while the net result in 2016 was 5.95 million, which represents a historical record and an increase of 117% compared to 2015.
"CEFC wishes to make full use of its advantages, resources, mechanisms and its brand to transform One Belt One Road Initiative into a well-organized and integrated energy chain... If we get the approval of the Romanian government authorities, then we will take possession of 51 % of KMGI shares and refineries, of 1,000 gas stations in neighboring countries and of the logistics system that can increase CEFC's value chain, "Ms. Du Liefen pointed out.
The National Company KazMunayGas Kazakhstan (KMG NC) and CEFC signed in December 2016 in Bucharest an agreement confirming the commitment to buy 51% of KMGI shares by the Chinese company. The transaction is expected to be completed this year, after obtaining all needed approvals.
Owned entirely by KazMunayGas oil company in Kazakhstan, KazMunayGas International is present in 11 countries and owns Petromidia Năvodari (the largest unit of its kind in Romania) and Vega Ploieşti (the oldest refinery in operation), as well as fuel distribution networks (Rompetrol) in Romania, Bulgaria, Moldova, Georgia, France and Spain.
CEFC is a private business conglomerate having its base in the energy and finance domains. CEFC owns 2 groups and 7 investment companies, a top company listed on China’s stock market, as well as shares in many international listed companies. The group has around 30,000 employees in 23 countries around the globe and in 2016 has generated operational revenues of 38.9 billion euros.
On July 4th, the "CEFC Day" was held at the China Pavilion of Expo Astana.
Astana hosts, until September 10th, the International Exhibition EXPO Astana 2017, under the slogan "Energy of the Future," an event expected to attract more than five million visitors from all over the world.