Trends
Global Sale
The Strategy of the National Company KazMunayGas JSC on "building the muscles” by acquiring the assets, announced couple of years ago, nowadays is replaced by a no less active sellout due to low global oil prices.
Saving the drowners
Last autumn, the management of the National Welfare Fund (NWF) Samruk-Kazyna announced that the total debt of KazMunayGas, resulting, inter alia, from the policy of "resource nationalism" and buying assets abroad, has reached 18 billion USD and KMG can not pay it on its own. Exotic options like purchasing the shares in the KMG affiliated companies by the NWF or by taking over KMG by the National Bank look more like shifting the funds of reserve and national fund from one pocket to another, which will not result in getting more money. As of the last-year-end situation, the external debt the Samruk-Kazyna National Welfare Fund reached 3.2 trillion KZT, which was formed mainly due to attracting external loans by the Fund’s affiliated companies. Therefore, to save a sinking ship in the current conditions of global markets will require real money and not the schemes. And sale of th state assets is one of the first ideas to come to the mind.
Wholesale and retail
In the last days of the expiring year, the Governmental Decree No. 1141 approved a list of objects of public and quasi-public sector, which are to be privatized in the next 4 years. Last time such a big sale took place only during the first years of independence, during the transition period from a socialist economy to capitalist system. The current list includes the national companies (for example, Joint Stock Company Kazgeology), and individual "daughters" and "granddaughter" of KazMunayGas (KazTransGas-Almaty JSC, KMG E&P Exploration Assets), and even entire industries. In particular, the State is ready to pass into the hands of private industry almost entire oil refining and downstream sectors.
Just prior to the start of the wholesales, it was announced by the Chairman of the Board of Samruk-Kazyna Umirzak Shukeev. According to Mr.Shukeev, the list of objects for privatization will include 43 major assets and 182 secondary ones. “It is proposed to consolidate the assets and to prepare KMG itself for an IPO by 2017, when the Financial Centre will be launched in Astana. It is planned to ensure the structural reforms in "KazTransOil", to privatize the assets such as "Kazmortransflot" or Batumi Terminal, to review all non-core assets in "KazTransGaz" and "KazTransOil", to privatize them and to ensure a unification of the pipeline transport,"- said Mr. Shukeev. (However, in January, 2016 KazMunayGas declared that the merger of KazTransOil and KazTransGas is considered as inexpedient, thereby showing the plans of the state holding management).
Mr. Shukeev made another sensational statement: about the impending sale of the refining industry. As a part of the sale, KazMunayGas-Processing and Marketing JSC can exchange the shares of three Kazakhstani-based refineries with the potential investors,- said Mr Shukeev. -In KazMunayGas-PM we plan to privatize its controlling stake. In doing so, it is proposed to consider 3 options: to sell 51% of overall KMG RM, if it will be more efficient, then to sell separately all 3 refineries or to exchange the shares with the potential partners,"- said Mr. Shukeev at the government meeting as of December last year. "As to the filling stations, they are also shall be privatized and it’s better to use the experience, acquired by KMG RM, i.e. to use franchising, and maybe, it will be necessary to make certain changes in the legislation,"- he added.