Kazakhoil wins contest for Kherson refinery stake

Dec 19, 2000 01:00 AM

Ukraine's State Property Fund confirmed on December 11 that Kazakhstan's state oil company had been chosen as the winner of a privatisation tender for a 60 % interest in the Kherson oil refinery. The announcement came as no surprise. Kazakhoil has been managing a controlling stake in the refinery plus one share since last year, and analysts said when the tender was called that they expected the Kazakhstani company, which is keen on establishing a niche for itself in the Ukrainian fuel market, to bid.
The Ukrainian government originally said it wanted to sell 50 % plus one share in the refinery. Kazakhoil has been acting as manager of that 50 % plus one share for about a year. It took control of the stake within the framework of a supply and cooperation deal providing for the Kazakhstani side to deliver up to 3 mm tpy of crude oil to the Kherson refinery.
Kazakhoil pledged to pay 35 mm hryvnyas (equivalent to about $ 6.4 mm) for the 60 % stake sold in the tender, fund officials said. The starting price of the stake had been set at 29.69 mm hryvnyas. Kazakhoil also pledged to pay off $ 60 mm worth of the refinery's debts and supply at least 1.8 mm tpy of crude oil, fund officials said.

The Kazakhstani company is already one of the main suppliers of feedstock to the Kherson plant, which was designed to process up to 7 mm tpy of crude. As of mid-October, it was sending the Kherson plant about 100,000 tons of oil per month. Kazakhoil is paying shipping costs of $ 130-140 per ton for shipments to the Ukrainian refinery, according to company managers.
Kazakhoil has also pledged to launch an investment program so that the Kherson refinery can begin turning out high-octane gasoline and set up its own chain of filling stations in southern and eastern regions of Ukraine, the fund said. Meanwhile, representatives of Kazakhoil said that the company hoped to submit bids for two other oil-processing plants in Ukraine. Specifically, they said, Kazakhoil is interested in the Naftokhimik Prikarpattya and Halychyna refineries.
State Property Fund officials said that they had already discussed these prospects with the Kazakhstani company and that bids from Kazakhoil would be welcomed. Western press agencies noted, however, that these two refineries cannot be sold off at Kyiv's discretion since the government is currently involved in a legal battle with private companies over the right to manage controlling stakes in the plants.

Source: NewsBase
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