KazMunayGas Challenges Romania's Seizure of Black Sea Refinery
KazMunayGas has challenged Romanian prosecutors' seizure of a Black Sea refinery and other assets owned by the Kazakh energy company and oil group Rompetrol Rafinare, saying it will take the dispute to international arbitration if no solution is found.
In May, Romanian prosecutors seized the Petromidia refinery, and other assets, belonging to Rompetrol and parent company KazMunayGas in a wider investigation regarding the Romanian company's privatisation in 2000.
KazMunayGas has said it was not notified of any potential investigations of Rompetrol by the Romanian authorities when it bought a 75 stake in the company in 2007. It consequently bought an additional 25 percent from a Romanian businessman.
KazMunayGas said on Wednesday it had submitted to the Romanian authorities a notice of investment dispute, the first procedural step towards an arbitration dispute between an investor and the country where the investment was made.
"If no solution is found, we are compelled to use all legal means to defend our rights and obtain compensation and that includes international arbitration against the State," Azamat Zhangulov, senior vice president of KMG International, said.
The letter details asset freezes totalling more than $2.1 billion.
Romanian prosecutors said in May that 14 suspects that were associated with Rompetrol, its parent and other firms formed a trans-border criminal group in 1998 to mislead Romanian authorities over the privatisation of Rompetrol Group.
They said the suspects, which are under investigation, caused damages of 1.72 billion lei ($423.88 million), $290.8 million and 34.9 million euros ($38.4 million) through fraud, tax evasion, money laundering and manipulating capital market.
(Reporting by Radu Marinas)
