Expert: No need to sell 50-percent stake in Pavlodar plant to Russia

Kazakhstan, Astana, Nov. 1 / Trend S.Suleymanov /

There is no need to sell a 50-percent stake in the Pavlodar Petrochemical Plant (PPP) to a Russian company, a senior Kazakh oil worker told Trend on condition of anonymity.

"The creation of a joint venture on the basis of the PPP is not the best kind of partnership with the Russians because it assumes a sale of a 50-percent stake in the company, which means the transfer of all of Kazakhstan's oil refining market to a neighboring country," a inside source told Trend.

The source said the arrival of any Russian company such as Gazprom Neft, Rosneft, Lukoil or TNK-BP would not mean the arrival of a partner, but rather a new owner.

"If we sell 50 percent of the plant, as well as the gas station, then we will lose control over Kazakhstan's oil products market," he said. "It will be a mirror image of Russia, and our Kazakh Oil and Gas Ministry will become a department or division of the Russian Oil and Gas Ministry. Then all issues will be resolved with Moscow."

He added that such a development would mean a rollback of the Soviet past and lead to a loss of national energy security.

This summer, KazMunayGas (KMG) reported that the company is in talks to sell a 50-percent stake in PPP to one of Russia's largest companies. Managing Director Daniyar Tiesov is heading the talks.

Media outlets disseminated unofficial information that TNK-BP may be the most likely buyer of the PPP. Acting head of TNK-BP Maxim Barski said TNK-BP is interested in buying the refinery, but only in conjunction with a network of filling stations. Then it was reported that another Russian company, Gazprom Neft, is in talks with the Kazakh authorities.

However, TNK-BP Chief Financial Officer Jonathan Muir said the company refused the idea of buying the refinery in Kazakhstan and is not engaged in any talks, RIA Novosti reported.

However, the source said that large Russian companies are continuing to maintain interest in the PPP despite their statements on refusing to take part in any transaction.

"The PPP, which is located on a pipeline running directly from the oil fields of western Siberia, remains an attractive target, as savings on raw materials deliveries are high," the source said.

KMG also reported that it made the decision to sell a 50-percent stake to a major oil company in Russia to resolve the issue of loading the plant with Russian oil.

The plant was built in the Soviet Union and only refines oil from western Siberian oil fields. Its estimated capacity is 6-7 million tons of oil per year. This is the only of the three Kazakh oil refineries, which runs on raw materials from neighboring country.

However, the source said KMG will be able to resist becoming overly dependent on Russian oil supplies in order to load the plant.

"A small branch should be built to connect the oil fields of Aktobe region with the Atasu Station (in the center of the country), through which passes the Omsk-Priirtishsk-Pavlodar-Atasu-Karakay-Shymkent Pipeline delivering oil from Russia to the PPP," the source said.

He added that the Kenkiyak-Kumkol Pipeline to China also begins from the Atasu Station.

"If the same Aktobemunaigaz turns a part of the volume north toward the PPP, we will have a real opportunity to flow Kazakh oil to this plant through KazTransOil," the source said. "We have a share in the Kashagan and Tengiz fields, and the country can take the required amount in the form of oil and provide its three refineries with raw materials. After all, the production volume in the country will only grow and ensuring domestic plants is the main strategic aim."

The source also said Kazakhstan does not need to fear Russia stopping its oil flow.

"Last year, the PPP had an uninterrupted oil supply without having sold any 50-percent share to a Russian company," the source said. He also recalled that the construction of an installation to process Kazakh oil at the PPP will be completed in 2011.

"Thus, the PPP can and should remain in state ownership without outside partners," the source noted.

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