UPDATE 1-Kazakh oil pipeline company eyes $100 mln 'people's IPO'

Wed Oct 3, 2012 3:36am EDT

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By Mariya Gordeyeva

ASTANA Oct 3 (Reuters) - Kazakhstan's oil pipeline monopoly plans to raise more than $100 million through an initial public share offering (IPO) as part of the central Asian country's "people's IPO" programme, the deputy head of its parent company said.

KazTransOil, 100 percent owned by state oil and gas company KazMunaiGas, will be among the first state-run enterprises to list on the local stock exchange in a drive to attract ordinary Kazakh investors. No date has been set for the proposed IPO.

"It's a big political task. We want the people of Kazakhstan to participate in our prosperity," Daniyar Berlibayev, the deputy chief executive of KazMunaiGas, said.

Asked how much KazTransOil planned to raise in the offering, he said: "It will be more than $100 million."

Kazakhstan, central Asia's largest economy, plans to invigorate the small local stock market and to raise about $500 million from the first round of IPOs, with between 5 percent and 15 percent of the companies' shares being sold to retail investors and local pension funds.

The government had planned to launch the people's IPO by the third quarter of this year, but it postponed the first listings because of the volatile global market. State grid company KEGOC will also be among the first to take part in the programme.

The government envisages the jewels in the Kazakhstan's crown - KazMunaiGas as well as uranium miner Kazatomprom - will go public after 2015, potentially raising billions of dollars via sales to local and foreign investors.

Kazakhstan, which holds 3 percent of the world's recoverable oil reserves, is the largest former Soviet oil producer after Russia. KazTransOil shipped 66.9 million tonnes of crude through its pipelines last year, most of the oil exported by Kazakhstan.

AMBITIOUS PLANS

In an interview with Reuters, Berlibayev said that KazMunaiGas - the second-largest oil producer in Kazakhstan after the Chevron-led Tengizchevroil joint venture - would record only a modest increase in crude oil production this year and next.

He said that the state company forecasts crude oil production of 21.9 million tonnes this year and 22 million tonnes in 2013.

Longer term, KazMunaiGas has more ambitious plans for a 60 percent increase in output by 2022. Chief Executive Lyazzat Kiinov said on Tuesday that crude oil production should reach 35.4 million tonnes by 2022.

More assertive state policy has helped KazMunaiGas to acquire stakes in foreign-owned consortiums developing major oil fields in the country.

Its 10 percent stake in the Karachaganak field, acquired in December, will help the state company to maintain relatively stable output in the next two years and offset a drop in production at ageing fields in western Kazakhstan, Berlibayev said.

The company's London-listed subsidiary, KazMunaiGas Exploration Production (KMGEP), will produce slightly less than the 13 million tonnes planned this year, Berlibayev said, having failed to recover fully from a sharp drop in 2011.

KMGEP's output fell 7 percent to 12.3 million tonnes last year because of technical difficulties at its Ozen and Emba fields and a months-long strike that erupted into deadly clashes in the nearby town of Zhanaozen in December.

The listed company is awaiting the transfer of onshore assets owned by the parent, including the 50 percent stake in MangistauMunaiGas acquired by KazMunaiGas in 2009. China's CNPC owns the other 50 percent.

"MangistauMunaiGas remains our asset," Berlibayev said. "We will take a decision (on transferring it to KMGEP) when we have finalised the strategy for our oil production assets."

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