KMGI and Rompetrol, is owned by the Kazakh government, and KMGI have been operating in Romania and the Black Sea region for almost 10 years.
Our business, KMGI and Rompetrol, is owned by the Kazakh government, and we have been operating in Romania and the Black Sea region for almost 10 years. We are profitable and we account for 3% of Romania’s GDP. More than 30% of the oil used in Romania is thanks to the crude that flows between the two countries. I would make a few observations about what our business model shows about the relationship between Asia and Europe. First, we have spent many billions of dollars getting our plants and facilities into the best condition possible to be productive assets. Second, we employ more than 6,000 workers and pay good salaries, so we are investing in the communities and regions where we do business. We want to do everything possible to help Romania keep growing. Third, Romania is our home, and as a result our thinking has been to help make the country a hub for our energy production and generate new capital flows across the region and into Europe. Here we are talking about downstream and exports. So at the heart of the Romania Kazakh partnership is our shared commitment to do good business together.
Your comments lead to my second question, where we see in the latest edition of Forbes Romania published this week some news about your position in the marketplace. Can you comment?
I am very pleased that Forbes has rated us as one of only two brands in Romania that for more than seven years, from the crisis to today, has kept us at the top rank for business and exports. Our contribution helps the country’s trade balance a lot. Numbers are important for sure in any business, but what Forbes is really saying is that we are good for keeping the economy stable and strong.
Can you explain the significance of the Romanian Ministry of Energy’s announcement that they will assign the state-owned company SAPE as the Romanian state’s representative within the Romanian-Kazakh investment fund?
The investment fund you mention is part of a Memorandum of Understanding our company signed with the Romanian authorities back in 2013. The fact that the Ministry for Energy last week announced they were assigning the company SAPE as their representative is a positive and necessary step from the State in beginning to fulfill that 2013 agreement.
It is also positive news for the country of Romania. The main investment priorities of this joint investment fund are aimed at reinforcing KGMI’s activities and operations and the creation of new jobs with a direct impact on the Romanian economy. We also see the diversification of oil supply sources for Romania and the European Union as a priority, as shown in the July 2016 report released by Cambridge Econometrics.
Last week’s step gives us some positive expectations regarding our company’s other challenges with the state authorities.
Could you tell us more about those challenges?
We remain in a situation where a seizure of our assets places limits on us. In addition we also await the privatisation procedure for 26.67%. Until this can begin, we are waiting for 200 million US dollars to be unblocked, a situation that has been ongoing since 2013. To be clear, this is 200 million US dollars we are waiting to be allowed to pay to the Treasury in Romania. It is certainly in the interest of the Romanian state budget to get this implemented.
So we of course welcome the positive steps of last week. But we would also like to see these public assurances translated into actions in the near future. We want to see a safe environment for our investments in Romania. We are proud of our contribution to Romania and of our track record of being a committed and responsible investor.