Baku, Azerbaijan, Mar. 10
By Elena Kosolapova – Trend:
The International Rating Agency S&P Global Ratings said today that Kazakhstan-government-controlled vertically integrated oil company KazMunaiGas 's (KMG's) expected sale of a 51 percent stake in KazMunaiGas International N.V. (KMGI) to CEFC China Energy Company Ltd (CEFC China; not rated) does not affect the ratings on KMG (BB/Negative/--; kzA/--/--) and KMGI (B-/Stable/--), S&P said in a message March 10.
The rating agency noted that the sale is still subject to some conditions, including lender consent and regulatory approvals. Moreover S&P expects that the ongoing legal dispute between KMGI and the Romanian authorities regarding privatization by KMGI's previous shareholders may continue for some time, and the agency believes that CEFC China has some protection against certain potential negative outcomes for KMGI.
“We assume that, for the time being, KMG will continue to supply crude oil to KMGI and provide some support to KMGI,” S&P said.
The rating agency already factors the expected KMGI sale into its base-case scenarios for both KMG and KMGI.
The rating agency does not anticipate that the KMGI transaction will have any significant impact on KMG's creditworthiness, because KMGI's EBITDA and cash flow are relatively small contributors to the overall performance of the KMG group. In 2015, KMGI's EBITDA was about $150 million, compared with about $1.1 billion consolidated EBITDA at KMG. Higher oil prices should bolster the exploration and production segment's earnings, while the performance of oil and gas pipeline segments remains relatively stable. These factors further reduce the relative importance of KMGI in the group.
KMGI is a Romania-based oil refining and marketing company.
Follow the author on Twitter: @E_Kosolapova