Kazakhstan mulling privatization of oil refineries

All the three Kazakhstan-based oil refineries located in Shymkent, Pavlodar and Atyrau might be privatized in Kazakhstan, Daniyar Berlibayev, Vice Chairman of the Board at KazMunaiGas, said on the sidelines of Kazenergy forum.

“The country’s government is considering privatization of the facilities (…) however, the final list has yet to be approved. For now all the three refineries are on the preliminary list of facilities to go private”, he elaborated.

He didn’t specify if the government will retain a certain stake in all of them. “Samruk- Kazyna National Welfare Fund and the Government are discussing possible options. The Government holds 100% in the Atyrau facility, 100% in the Pavlodar facility and 50% in the Shymkent facility”.

When commenting on possible advantages of the move, Mr.Berlibayev said “private business might improve the situation”.

 “Amidst economic crisis conditions, crude and gas refining is a solution. The sooner Kazakhstan starts doing that, the more effectively the country will be developing. [Despite earlier abandoned plan to build up a fourth oil refinery], we need to construct another oil refinery”, Tengrinews.kz reported late December 2014, citing President Nursultan Nazarbayev as saying in a TV link-up on industrialization programs in Kazakhstan. “We should construct a 4th oil refinery so that we wouldn’t have to turn to other nations as we have abundant oil reserves at hand”, Head of State said December 25, 2014.

Back in the autumn 2014 the country’s Energy Ministry announced that a decision had been taken to build up the processing capabilities of the Shymkent-based oil refinery rather than have a 4th refinery constructed.

Oil production in Kazakhstan in 2014 stood at 73.7 million tons. The three Kazakhstan-based oil refineries produced a total of 3.02 million tons of petrol. As of now, 30% of [the most commonly used] AI-92-95 petrol has been imported from the neighboring Russia.