Turkey: Kazakhstani/Russian group buys Petkim
A GROUP of Kazakhstani and Russian investors last month bid $2.05bn to win a controlling share in Petkim Petrokimiya, the country's biggest petrochemicals company. Petkim's market value tripled to $4.1bn on the day of the privatisation auction, highlighting growing interest among former-Soviet oil producers in acquiring downstream Western assets.
Trans Central Asia Petrochemicals (TCAP), a consortium of Caspian Sea Oil, an exploration and production company operating in western Kazakhstan, Eurasia, a Kazakhstani industrial investor and Troika Capital Partners, a division of Russia's Troika Dialog bank, beat six other bidders. TCAP was formed to pursue Kazakhstani/Russian investment projects in the country. "This acquisition is proof of the high level of Russian and Kazakhstani confidence in the huge growth potential of the Turkish market," Troika Dialog said.
Other bidders for Petkim included a group comprising Socar, Azerbaijan's state-owned oil company, Turcas, the domestic petroleum distributor, and Saudi Arabia's Injaz Partners, and a separate partnership between state-owned Indian Oil Corporation and Calik Enerji, a local oil and gas producer. TuranAlem, Kazakhstan's biggest bank, and Credit Suisse advised on the deal, which requires approval from Turkey's competition board before becoming effective.
Dmitri Loukashov, a senior analyst at Russia's Alfa Bank, claims it has become "fashionable" for former-Soviet oil producers to buy downstream assets in Europe or connected with that market, despite the dubious economics of such acquisitions. "Operationally, I see no real synergies in this type of acquisition. Financially, it's a bet. It might or might not make sense," he says.
Uzakbay Karabalin, chief executive of KazMunaiGaz (KMG), Kazakhstan's state-owned oil company, has said KMG is hunting for downstream assets in Europe to be able to process crude oil closer to end markets. KMG recently lost out to Poland's PKN Orlen at the auction of Unipetrol, the Czech refinery. PKN also won control of Lithuania's Mazeikiu Nafta, which owns the biggest refinery in the Baltic region, after KMG's attempt to buy the plant failed.
KMG and Socar are both considering building new oil and gas processing plants at Ceyhan, on the Turkish Mediterranean, the terminal of various new pipelines bringing Caspian oil and gas to European markets. Karabalin says Ceyhan will soon overtake Rotterdam as Europe's biggest oil-trading hub.