KMGI To Expand Petrol Station Network In Romania, Bulgaria

Reuters

BUCHAREST, Aug 9 (Reuters) - 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 $1 billion, 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 percent 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 $3 billion 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 privatisation case, a date for which has yet to be set. A Bucharest court rejected KMGI's request to have the seizure lifted last year.

"To build a credible investment plan we would like to have a swift resolution of this long-standing legal dispute," Golovin said. "Time is of the essence and these long standing issues from the 1990s should not affect company activity in 2017."

"They should be fully decoupled, responsible stakeholders should be held accountable but at the same time the company should have clarity in building its investments and budgets."

A "measure of last resort" would be to ask for international arbitration, Golovin said.

KMGI has investment projects in the pipeline, including building a 70 MW in-house power plant to boost cost efficiency, and greenfield expansion of its petrol stations network.

It operates over 1,000 petrol stations in Romania, Moldova, Georgia and Bulgaria, along with 100 stations under the Dyneff brand in France and Spain.

Golovin said it aims to increase its share of Romania's petrol station market to 25 percent from 16 percent currently, and boost its share of the Bulgarian petrol station market to 15 percent over three years. It does not rule out acquiring existing networks, he said.


12

View Full Article

Copyright 2017 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

Brent Crude Oil : $52.72/BBL 3.31%
Light Crude Oil : $48.51/BBL 3.01%
Natural Gas : $2.89/MMBtu 1.36%
Updated in last 24 hours