Rompetrol agrees to buy back part of Romanian state's shares in refinery company after historic debt issue

Romania's oil and gas group Rompetrol, majority owned by Kazakh company KazMunayGas, reached an agreement with the Romanian state on the dispute over the Rompetrol Rafinare bond conversion. Rompetrol agreed to redeem only part of the shares the state currently owns in Rompetrol Rafinare, a company in the group which runs the refineries Petromidia Năvodari and Vega Ploiești, but the state will continue to be a significant shareholder in the company. The company did not disclose the purchase price, nor the size of the package and a timeline for the deal. The final form of the agreement will be concluded in the following period, pending all technical and commercial details and approvals from KazMunayGas' board, the sole shareholder of the Rompetrol group. Law firms Ţuca Zbârcea & Asociaţii and NNDKP assisted Rompetrol in the deal. After the bonds issued in 2003 were converted into shares in 2010, the Romanian state again became a shareholder in Rompetrol Rafinare, with a stake of 44.69 percent. Both the Romanian authorities and the Kazakh – based group showed openness to establishing a partnership for Romania's energy sector development, and its role in the Black Sea region and the European Union. “The solution allows us to focus on expanding the Rompetrol group in the Black Sea region, and consolidating the group as a development platform for KazMunayGas and its presence in the European Union,” said Daniar Berlibayev, first vice-president of the KazMunayGas board, Kazakhstan’s national oil and gas company. Rompetrol plans to invest some USD 200 million in expanding the network of gas stations in Romania. The group also plans to expand its retail network around the Black Sea by at least 50 percent. Under the scheme, the company will open 150 new gas stations in Romania, while 200 other stations will be added in Bulgaria, Georgia and the Republic of Moldova. The expansion comes as a response to the increasing production at the Petromidia refinery in Romania. Rompetrol has invested about USD 1.3 billion over the past 10 years in increasing the annual capacity of its Petromidia refinery on the Romanian Black Sea. It will invest a further USD 100 million in the refinery this year to make it profitable. The company is also considering adding a 5-megawatt gas-fired power plant to secure the energy consumption of the Petromidia refinery and make it more efficient. KazMunaiGaz bought 75 percent in Romania- based Rompetrol from its former owner, Dinu Patriciu, in 2007. It bought the remaining 25 percent in 2009. The company has been part of a legal fight with the Romanian state over an alleged unpaid debt of some EUR 570 million. It ended up with Rompetrol giving the Romanian state a stake of 44.7 percent in the refinery on account of a portion of the debt. editor@romania-insider.com