Kazakhstan to Sell Up to 20% of KazMunaiGaz, Samruk-Kazyna Says

Oct 20. Bloomberg

By Jason Webb

Kazakhstan to Sell Up to 20% of KazMunaiGaz, Samruk-Kazyna SaysKazakhstan plans to sell up to 20 percent of KazMunaiGaz National Co., which is developing one of the world’s biggest oil discoveries in 40 years, probably in 2011, according to the country’s sovereign wealth fund.

An initial public offering of shares in the state fuel producer may be in London, Kairat Kelimbetov, chief executive officer of the National Wellbeing Fund Samruk-Kazyna, said in an interview in London. The sale would raise “billions” of dollars, he said, declining to give any more precise estimate.

Kazakhstan, holder of 3 percent of the world’s oil, is seeking foreign capital to help develop its natural resources, which include oil, natural gas and metals, Kelimbetov said. KazMunaiGaz, which accounts for 24 percent of the central Asian nation’s oil production, said in April that it needs to spend $1.5 billion to $2 billion a year developing Kashagan.

“We talking about an IPO of not more than 20 percent of this company,” said Kelimbetov. He is studying the $70 billion share sale by Petroleo Brasileiro SA, he said.

Samruk-Kazyna, which acts as a holding company for the government, has no plans to boost its stakes in London-listed mining companies Eurasian Natural Resources Corp. or Kazakhmys Plc, Kelimbetov said. Samruk-Kazyna may provide $1.5 billon to $2 billion in loans or guarantees for Chinese credit lines to ENRC at the beginning of next year, he said.

Stake Sales

After the KazMunaiGaz share sale, Samruk-Kazyna may sell shares in other companies it holds, he said, with some possibly listing in Hong Kong.

“We consider ourselves a service economy to the Chinese and Asian economies,” he said.

Samruk-Kazyna’s other holdings include Kazatomprom, which mines uranium, power utilities and a stake in Kazakhtelecom.

The company is also looking to sell stakes in BTA Bank, Alliance Bank and Temirbank, which defaulted last year and were restructured, he said. He hoped it would take place “as soon as possible,” he said.

OAO Sberbank, Russia’s biggest lender, is interested in BTA Bank, Kelimbetov said. Kazakhstan has also received approaches from other investors about the other banks, he said.