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Ministry of Energy: Government resumed talks on the Rompetrol Memorandum

22 January 2015
Bogdan Tudorache


The government has resumed talks with KazMunayGas on Rompetrol memorandum, particularly relating to the creation of the Romanian-Kazakh investment fund that would achieve in the long-term an asset base of 1 billion euro, told officials of the Ministry of Energy, SMEs and Business Environment.

“At the moment there are talks with KMG International NV in connection with this investment fund”, said the quoted source.

“Regarding the Investment Fund in the energy sector, there were discussed with KMG International NV a number of projects in the energy sector, which will be conducted by the Kazakh-Romanian Investment Fund: direct investment in refining, investment in a cogeneration plant and heating will also ensure Năvodari city heating, investment in building new stations for trading petroleum products, investments in increasing the performance of natural gas storage capacity, investments in units to process natural gas in Romania. It is estimated that the aforementioned investments will generate about 2,000 jobs in Romania”, according to ministry officials.

Rompetrol officials did not want to offer any extra details, at least for the time being.

Last week, former chief of state privatizations OPSPI, Gabriel Dumitraşcu, said in an interview that the Rompetrol memorandum stagnated in a full election year, because of the fear of the negotiating committee members to attend its meetings, but it would be continued by the government – and subsequently confirmed by Prime Minister Victor Ponta.

“No procedure was finalized for the share sale and realization of the investment fund of one billion dollars. Nobody wanted to sign any paper, no official, as they said Basescu will make files”, said Ponta in a TV show, referring to possible threats with penal files from the former president Traian Băsescu.

Ponta said that he would not agree to the signing of the memorandum until there is no doubt about the guarantees regarding the establishment of the one billion dollars investment fund.

“Gabriel Dumitraşcu did not signed the memorandum on his own. He had the government agreement. I think the memorandum will go on“, also told us a former high official.

What are the benefits of state?

The Rompetrol Memorandum contains two stories: one related to the write-off of debts, and another on the creation of an investment fund that offers the state money and benefits from new jobs creation.

In January 2013, the market capitalization valued 26% of Rompetrol to about 125 million dollars, and the strate will receive 200 million dollars, according to the memorandum. In addition, the creation of the 1 billion dollars long-term fund provides state for free with 20% of the shares.

The state initially claimed, before signing this Memorandum, the full recovery of 570.3 million euro from Rompetrol shareholders. On the other hand, the group said it brought to the state budget about 8,673 million dollars in the period 2004-2012,of which tax dues paid by Rompetrol to the state budget of 24,312,276,819 lei, according to data cited by ANAF for

Following the memorandum, the state will actually collect only 270 of the 760 million dollars credited to Rompetrol in 2003. In conclusion, the major benefits will come from the investment fund, a novelty for Romania, giving its asset exposure on energy, apart from the Property Fund. And the 18% of the company that will remain in state hands, unless it will be diluted through new capital increases.

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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