Kazakhstan could privatize 50% stakes in Atyrau and Pavlodar oil refineries

ASTANA. March 17 (Interfax) - Kazakhstan is thinking of privatizing 50% stakes in Atyrau Oil Refinery and Pavlodar Petrochemical Plant, said Rustam Akhmetov, the deputy chairman of the Agency for the Protection and Development of Competition.

"The government has held preliminary discussions to favor a proposal to dispose of 50% holdings in these assets. We can see a successful example of the Shymkent oil refinery [PetroKazakhstan Oil Products], where 50% stakes are privately owned. The refinery is managed by the private owner, which means that none of its managers are appointed by the government. As a result, there are significantly fewer accidents and technological failures and, consequently, the repair work scopes at the refinery are considerably smaller. This demonstrates that the private management is far more effective," Akhmetov said on the sidelines of a Monday session of the Majilis, the lower chamber of the parliament.

Akhmetov also mentioned plans to privatize a significant portion of communal property in the fuel and energy sector.

"We propose including these assets in the third stage of privatization - after the implementation of all state programs, the finalization of changes to the regulatory legal framework in this area and the introduction of incentive-based tariffs. Once the market is ready for the successful operation of privatized assets, we will proceed with privatizing the communal property," he added.

There are three refineries in Kazakhstan: the Shymkent refinery, which is owned by KazMunayGas and CNPC on a parity basis, the Atyrau and Pavlodar refineries, which are controlled by KazMunayGas.

Pavlodar was put into operation in 1978 to process crude oil from Western Siberian fields. Throughput capacity is 6 million tonnes per year. The plant produces motor gasoline, RT brand jet fuel, diesel fuel, fuel oil, petroleum coke, road bitumen, and municipal gases. It is wholly owned by KazMunayGas.

Atyrau Oil Refinery in the country's west is 99% owned by KazMunayGas. Throughput capacity is 5.5 million tonnes a year with refining depth of up to 86.4%.

The Shymkent Oil Refinery was built in 1985 and is the newest in the republic. KazMunayGas and CNPC each own a 50% stake in the refinery.