Romania’s Energy Ministry will not extend the 2013 Memorandum with KazMunaiGaz, the owner of Rompetrol Rafinare, the country’s biggest oil refiner, if the Anti-Organized Crime Directorate (DIICOT) sends to court the Rompetrol 3 criminal case, energy minister Toma Petcu said yesterday.

KazMunaiGaz will have to pay its debt to the state in order to prove its good faith.

The parliamentary committee investigating the National Authority for Energy Regulation (ANRE) heard Petcu yesterday. The last article of the 2013 memorandum provides that the commitments taken over by the two parts cease if there is a legal conflict between them.

“If the case is sent to court, the memorandum falls,” the minister explained, reports Profit.ro.

Romanian prime minister Mihai Tudose and other government members met with KazMunaiGaz representatives on Friday to discuss about the memorandum. The Romanian government told KazMunaiGaz that in order to extend the Memorandum the company needs to pay its historical debt to the Romanian state and the judiciary needs to settle the case.

The Rompetrol group was founded by Romanian investor Dinu Patriciu in 2000. Patriciu bought the Petromidia refinery from the state and then convinced the Adrian Nastase cabinet to convert the refinery’s historical debt into 7-year convertible bonds worth USD 670 million, in 2003.

Patriciu sold the whole group to KazMunayGas in 2007. In 2014, Kaz MunayGas said it wouldn’t repay the whole USD 670 million debt. It bought back from the state bonds worth USD 71 million and converted the remaining USD 600 million worth of bonds into shares, and the Romanian state thus became a shareholder in Rompetrol Rafinare, the company that owns the Petromidia refinery, with a 44.7% stake.

In 2013, the Victor Ponta cabinet agreed to sell a 26.7% stake for USD 200 million to KMG and keep the remaining 18%. The Government also decided to end the trial with Rompetrol for recovering a USD 600 million debt.

Last year Romanian prosecutors started a new investigation into the privatization of Rompetrol Rafinare and seized the company’s assets. They are trying to recover some EUR 670 million worth of damages to the state budget.

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