Kazakhstan's KMG considers Tatneft as potential co-owner of Atyrau Refinery
ASTANA. March 28 (Interfax) - National oil company KazMunayGas (KMG) is evaluating the Kazakh government's proposal to privatize shares in the Pavlodar and Atyrau oil refineries (POR and AOR), KMG's press service said on Friday.
"The privatization of shares in the Pavlodar and Atyrau refineries is a proposal from the Agency for the Protection and Development of Competition aimed at developing competition in the oil refining and petroleum products markets by reducing the quasi-state sector's share. JSC KazMunayGas (KMG) is analyzing this issue, given that preparing for such decisions requires a significant amount of time," the press service said.
In practice, such processes take several years, due to the need to resolve numerous corporate, technical and economic issues, it said.
KMG is actively developing the petrochemical industry and remains open to cooperation with partners for jointly building the entire production chain, it said.
"In this context, various companies from both the far and near abroad [CIS and non-CIS countries] are being considered, including PJSC Tatneft . Within the established partnership between JSC KazMunayGas and PJSC Tatneft, there is an ongoing exchange of experience, including regarding specific units and technologies, as well as organizing high conversion production facilities based on petrochemical raw materials from AOR LLP. PJSC Tatneft has also expressed interest in investing in new petrochemical projects directly related to AOR LLP's production activities, particularly in terephthalic acid and polyethylene terephthalate production (PTA and PET)," it said.
It was previously reported that following a proposal from the Agency for the Protection and Development of Competition, Kazakhstan was considering privatizing 50% of the shares in AOR and POR.
"The government has held preliminary discussions and has given its preliminary approval for a proposal to dispose of 50% of the state's shares in these assets. We see the successful example of the Shymkent oil refinery, where 50% of the shares are privately owned. Most importantly, the refinery is managed by a 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 scope of repair work is considerably smaller. This demonstrates that the private management is far more effective," First Deputy Prime Minister Rustam Akhmetov said in mid-March.
There are three large refineries in Kazakhstan - the Shymkent, Atyrau and Pavlodar refineries.
POR specializes in processing crude oil from West Siberian fields, with an annual capacity of 6 million tonnes. KazMunayGas owns 100% of POR.
AOR is located in western Kazakhstan. Its designed processing capacity stands at 5.5 million tonnes per year. The main owner is KMG (99%).
