Romania: Investigation of Rompetrol privatization will not affect the sale to Chinese CEFC

24. June 2016. / SEE Energy News

Vice Chairman of the Board of Kazakh stateowned company KazMunayGaz Diniyar Berlibayev said that the investigation into the privatization of Rompetrol Rafinare launched by the Romanian state will not affect the sale of 51 % stake in KMG International (former Rompetrol Group) to Chinese CEFC.

According to the agreement signed last month, CEFC and KazMunayGaz will establish a joint venture in which CEFC will have 51 % stake, while the remaining 49 % will be held by KMG. CEFC will pay 680 million dollars for 51 % stake, with the obligation to invest additional 3 billion dollars in the next five years. CEFC plans further investment and expansion of KMG International’s fuel distribution network from 1,000 to 3,000 petrol station.

Berlibayev reassured that this transaction will not be jeopardized. KazMunayGaz proposed to Chinese company to finalize the acquisition by the end of this year and believes that the dispute will be resolved by that time.

Regarding the investigation, Berlibayev said that KMG bought Rompetrol in 2007 and the company had all the necessary approvals by the Romanian authorities and the European Commission. Therefore, the company considers itself a purchaser in good faith. However, it did challenged a levy imposed by DIICOT. He added that the company has no rights suspended in KMG International, but it is having a precautionary attachment on its shares due to the ongoing investigation.

In mid-May, prosecutors from the Romanian Directorate for Investigating Organized Crime and Terrorism continue their investigation on possible tax fraud during the privatization of the country’s largest oil refinery Petromidia, which is now part of KMG international. The prosecutors announced that they have frozen the company’s assets worth about 670 million euros, which is the estimated damage to the state caused by illegal activities carried out by the refinery’s former owners in complicity with Romanian officials. Kazakh stateowned oil company KazMunayGas is accused of failing to settle debts inherited from Rompetrol, the former owner of the refinery prior to the sale in 2007, transmits Serbia-energy.eu

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