KazMunaiGas Acquires 75% in Rompetrol

Kazakh state-owned oil and gas company KazMunaiGas acquired 75% of Romanian peer Rompetrol for an estimated 2.7 billion USD.

"This transaction guarantees the rapid development of Rompetrol through access to Kazakhstan"s resources," Patriciu told a press conference, declining to reveal any financial details of the deal.

"The acquisition of a majority stake in Rompetrol provides us with a footprint in important downstream markets in Europe, including France, Romania, Moldova and Bulgaria, as well as the ability to utilize Rompetrol as a platform for future expansion," President of KazMunayGas, Uzakbay Karabalin, said.

The two groups said in a statement KazMunaiGaz "doubles its refining capacity and gains access to 630 petrol stations held by Rompetrol across seven European from Georgia to France" through this transaction.

The Rompetrol Group, which is valued at around 3.61 billion USD, signed a binding share purchase agreement on the 75% stake on Friday. Rompetrol"s previous sole owner Dinu Patriciu will continue to hold the remaining 25% stake. The sale, which is conditional on the approval of the European Commission, was the culmination of a seven-month private auction process conducted by Morgan Stanley"s London-based Energy Group.

Rompetrol has more than four million tonnes of refining capacity and the capability to distribute more than 7 million tonnes of oil products annually through its own wholesale and retail networks.

Patriciu, who will remain as chairman and CEO of the company to secure the continuity of strategy in the management of the company, said that Rompetrol secured long-term access to oil supplies with this agreement.

"KMG"s investment provides Rompetrol with the access to raw materials and finances that the company needs to continue implementing its expansion plans, both through investments in refinery improvement, logistics and sensible well-priced acquisitions," Patriciu was quoted as saying.

The Romanian company recorded 1.2 billion RON revenues in the first six months of the year, down 18% on the year (y/y), while the net profit of the company came in at 15 million RON (4.9 million EUR), reversing 35 million RON losses in the same period of 2006.