KMG Pushes Back on Reports of European Asset Sale Amid Romania Refinery Losses
KazMunaiGaz (KMG) says it has no concrete plans to sell any of its European assets, though pressure is building to at least sell off some of the Kazakh company’s shares in oil refineries in Romania. Reports on November 21 said KMG was looking to privatize up to 50% of its shares in its subsidiary KMG International’s (KMGI) European operations in Europe.
The reports were based on a list of recommendations from Kazakhstan’s Agency for the Protection and Development of Competition (APDC), which proposed, as part of the 2026-2027 strategy, that KMGI should have a two-stage tender to sell up to 50% of its stakes. On November 26, KMG denied making any decisions about KMGI businesses in Europe, adding that the APDC’s list of recommendations “includes assets from different sectors, but this in itself does not automatically trigger a sale.”
Rompetrol
KMGI has 28 companies operating in seven countries, four of them European, but the focus of reports was on the two oil refineries KMGI owns in Romania. KMGI purchased 75% of the shares in the Romanian oil company Rompetrol in 2007, and in 2009 bought the remaining 25% of shares in the company. That sale included the Petromidia oil refinery, with a capacity of some five million tons annually, and the smaller Vega refinery, with a capacity of some 350,000 tons that Rompetrol owns.
KMGI also took ownership of the oil terminal near Constanta on the Black Sea coast, some 20 kilometers from the Petromidia refinery. The terminal imports mainly Kazakh oil.
KMGI invested billions of dollars in upgrades and modernization of the refineries and the terminal, and finally, in 2017, operations of subsidiary Rompetrol Rafinare (54.63% KMGI and 44.7% Romanian state through the energy Ministry) showed a profit – $80 million.
By 2022, profits had slightly increased to $90.3 million, but in December that year, the Romanian authorities changed tax regulations, and in 2023, Rompetrol Rafinare registered a net loss of some $270.5 million, and in 2024, a loss of $78 million. In the first six months of 2025, the company lost $53 million and paid some $771 million in taxes to the Romanian government.
Rompetrol Rafinare has complained to the Romanian government that the tax burden is preventing the company from investing in new projects and has brought a legal challenge to the solidarity tax in court. In such a situation, it seems unlikely KMG would easily find a party interested in buying up to 50% of KMGI’s Romanian operation, unless the price was very low.
Opponents of the proposed arrangement point to the $7 billion in investment KMG has made over nearly 20 years into upgrading the Romanian refineries as a reason to be patient for a while longer.
KMGI
KMG has subsidiaries operating in Switzerland, Bulgaria, Turkey, Moldova, and Georgia, as well as in Romania and Kazakhstan. At the start of 2025, there were reports that KMG was considering the acquisition of an oil refinery in Bulgaria from Russia’s LUKoil, so it appeared the Kazakh company was looking to expand its operations in Europe.
The EU has been decreasing the amount of oil it buys from Russia since Moscow launched its full-scale invasion of Ukraine in February 2022. As imports of Russian oil have decreased, the EU’s imports of Kazakh oil have been increasing, and according to some sources, Kazakhstan is now the third largest supplier of oil to the EU (behind the United States and Norway).
It would seem KMG’s European assets should remain valuable for at least the near-term future.
Reports about the possible sale of KMGI shares in the Romanian companies did not mention possible sales of shares in any other specific KMG assets in Europe. It could be that there are some in the Kazakh government who feel there have already been enough problems in Romania, and it is time to cut KMG’s losses there.
However, Petromidia and Vega are the only two oil refineries KMG owns in Europe. They are links in a KMG ground-to-the-gas-pump chain that extracts oil in Kazakhstan, transports it via pipelines, railways, and oil tankers that the company partially or fully owns, and, in the case of Romania, refines that oil and then sells it as gasoline at the more than 1,400 petrol filling stations Rompetrol operates in Romania, Georgia, Bulgaria, and Moldova.
The APDC mentioned the privatization of KMGI shares was meant to attract strategic partners and investors who could “ensure the continued operations of KMG’s international businesses.” So, it could be that the APDC or someone else in the Kazakh government has already identified certain companies as potential strategic partners, possibly someone who could convince the Romanian government to drop its onerous solidarity tax.
KMG’s response seems to indicate that nothing will happen quickly, but that something could happen later.
