25 June 2009
Global perspectives: Oil refinery pulled from deal in Kazakhstan
By Cris Whetton
Kazak state company KazMunaiGas said the state excluded an oil refinery from the deal in which Kazak and Chinese state energy firms jointly bought a local oil producer.
KazMunaiGas and China’s CNPC have agreed to buy MangistauMunaiGas (MMG) as part of a deal in which CNPC also lent KazMunaiGas $5 billion. However, on orders of the state, shares in and assets related to the Pavlodar oil refinery were excluded from the deal. KazMunaiGas had earlier said it wanted full control of the refinery, one of Kazakhstan’s three. It already controls the two other refineries. The government is keen to curb inflation, forecast at 11% this year, and sees control over fuel prices as one of its key tools.
In Russia, Tatnetf cancelled a $900 million order for a refinery project in east central Russia, previously placed with GS Engineering & Construction Co., South Korea’s second-largest builder, “due to the contractor’s circumstances.” There was no further explanation. GS Engineering won the order in June 2008 from Russian oil company Tatnetf OAO in a consortium with Italian engineering group Maire Technimont SpA. The refinery was going to go up in Nizhnekamsk, 170 kilometers east of Kazan, the capital of the Republic of Tatarstan, by 2011.
Tatneft’s intentions became clearer the following week when it said it was seeking less expensive services from contractors. Vladlen Voskoboinikov, director of international financial reporting at Tatneft, said the plant’s financing was not in jeopardy, but: “In light of today’s conditions, we think we should get a better price.” The Nizhnekamsk plant, Russia’s first major oil refinery since the Soviet era, will have a capacity of 140,000 bpd.
Meanwhile, Gazprom Neft, the oil arm of Russian state-run gas company Gazprom, bought a lubricants plant in Italy. Gazprom Neft bought the plant, in the city of Bari on the southern Adriatic, from Chevron Global Energy. The financial terms of the deal were not immediately available. The plant has the capacity to produce 30,000 metric tons of oils and 6,000 metric tons of lubricants per year. The company said it hoped there would be “marketing and production synergy” with Serbian refiner NIS, in which Gazprom Neft bought a majority stake earlier this year. The Bari plant produces 150 types of oils for the transport and drilling industries. Chevron Italia, the company that operates the plant, will get a new name, Gazrpomneft Lubricants Italia. Gazpromneft-Lubricants will also get the right to use the Texaco brand in the Italian market until 2010. The deal follows a visit by Russian President Dmitry Medvedev to Bari during which he praised friendship between Russia and Italy and received a symbolic key to a Russian Orthodox church.
Cris Whetton is InTech’s European correspondent.