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Capital Markets

Kazakhstan: KazMunaiGas spreads its wings

In a further sign of the burgeoning geographic ambitions of companies from Kazakhstan, oil and gas firm KazMunaiGas (KMG) has bought a 75% stake in Romania’s Rompetrol Group.

Majority shareholder and Rompetrol chief executive Dinu Patriciu is reported to have sold his holding for $2.7 billion in a deal that will give KMG enhanced access to the downstream market in western as well as central and eastern Europe. However, the National Securities Commission in Bucharest is investigating a surge in Rompetrol’s share price less than an hour before the deal was ratified. A statement from the NSC says: "The shares rose in an extremely short time, only 20 minutes, to the level at which trading is automatically suspended." It adds that it "has been asked by the capital markets and the stock exchange to analyse and identify if the law was disregarded". Rompetrol’s shares have soared 40% since news of the deal broke.

On paper, at least, Rompetrol Group seems a good fit with KMG, which will be able to double its refining capacity as well as gain access to Rompetrol’s 630 filling stations in Albania, Bulgaria, Georgia, Moldova and Ukraine as well as France and Spain. For its part, Rompetrol Group will benefit from guaranteed access to Kazakh oil and cheap capital to increase its refining capacity and expand its retail network.

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