KazMunaiGaz to Borrow $2 Billion, Considers IPO
By Nariman Gizitdinov
April 9 (Bloomberg) — KazMunaiGaz National Co., a Kazakh state-owned energy company, is seeking to borrow as much as $2 billion this year and is considering a share sale within three years as it bids to join the world’s leading oil producers.
KazMunaiGaz plans to invest $4.3 billion this year in production, refining and pipelines, and refinance existing debt, Ardak Kassymbek, general manager for corporate strategy and asset management, said today in a phone interview from Astana.
The capital markets offer a “favorable situation” as KazMunaiGaz’s outstanding bonds trade at “very low rates,” Kassymbek said.
KazMunaiGaz, which accounts for about a quarter of Kazakhstan’s oil output, plans to become one of the world’s 30 biggest oil producers by 2015. The company aims to produce 25 million metric tons of oil by that time from 18.7 million tons last year. The central Asian nation holds 3.2 percent of the world’s oil reserves, according to BP Plc.
The borrowing would help cover $1.2 billion of spending planned this year for Kashagan, the country’s biggest oil field, Kassymbek said. Kazakhstan plans to boost oil output to 100 million tons by 2015 after bring the field online. KazMunaiGaz is equal partners in Kashagan with Eni SpA, Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA, each holding 16.8 percent.
In the next five years, KazMunaiGaz plans to invest as much as $4 billion a year, including from $1.5 billion to $2.5 billion a year for the Kashagan development, Kassymbek said. KazMunaiGaz also plans to invest $300 million at its Atyrau refinery and $200 million to upgrade Rompetrol, Kassymbek said.
Share Sale
Kazakhstan’s National Wellbeing Fund Samruk-Kazyna, which owns KazMunaiGaz for the state, has considered selling shares in the oil producer in the next two or three years, Kassymbek said.
“An IPO would be an optimal solution for the company to raise additional capital,” although requiring significant work, Kassymbek said.
KazMunaiGaz’s debt may increase to $15.2 billion this year from $14.5 billion last year, Kassymbek said. Earnings before interest, taxes, depreciation and amortization is set to advance about 44 percent to $6.2 billion this year, lowering the debt- to-Ebitda ratio to 2.5, he said. “We plan to stick to a 2.5 ratio in the future,” Kassymbek said.
The yield on KazMunaiGaz’s $1.5 billion bonds due in 2015 rose 1 basis point to 4.855 percent, after having risen 3 basis points earlier in the day. A basis point is 0.01 percentage point.
To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net
Last Updated: April 9, 2010 11:07 EDT
SOURCE: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZ3_oHhlOlg8
Tags: Astana, Investment, IPO, KazMunaiGaz
