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BUCHAREST (Romania), July 27 (SeeNews) - KazMunayGas International (KMGI) said on Thursday that it has received approval from the Romanian authorities to sell its assets in the country to CEFC China Energy Company Limited.
The approvals obtained from Romania's Supreme Council of National Defence and the country's anti-trust regulator represent an important milestone for the transaction, which is now expected to be finalized in the autumn, KMGI said.
The negotiations between KMGI's sole owner - KazMunayGas of Kazakhstan (KMG), and CEFC for the sale of 51% of KMGI's shares to the Chinese company reached their final stage in December 2016.
"Completion of the transaction will create a solid foundation for cooperation between KMG and CEFC, which will further expand the activities of KMGI in Eastern and Western Europe, as well as in other regions of the world," KMGI CEO, Zhanat Tussupbekov, said.
The joint venture will be able to take advantage of Kazakhstan's energy potential and China's financial resources to expand its activities throughout the area of the global project "One Belt - One Way".
KMG will keep a 49% share in KMGI.
"Particular attention will be paid to projects in Romania, the country where the main assets of the KMGI Group are located. In general, it should be noted that such a global project will have a multiplicative socio-economic effect for all the participating countries - Kazakhstan, Romania and China," Tussupbekov added.
According to the agreement between KMG and CEFC, the Chinese company will undertake a series of obligations and investments in the development of new projects in Romania, the European Union and countries along the Silk Route. At the same time, KMG will continue to deliver crude oil to the KMGI subsidiaries in order to support and expand its core operations in Europe.
KMGI owns Rompetrol chain of filling stations and operates two oil refineries in Romania, Petromidia Navodari and Vega Ploiesti. It also owns filling stations in Moldova and Bulgaria and France via Dyneff company. In July 2016, KMGI sold a 51% stake in Dyneff to CEFC.
Rompetrol was privatized in 1993 by Management and Employee Buy Out (MEBO) and later in 1998, it was bought by a local investor group led by Dinu Patriciu. In August 2007, KazMunayGas acquired 75% of Rompetrol shares from Patriciu for around 2.5 billion euro.