(Corrects name of NC KMG CEO to Sauat Mynbayev in paragraph 8)
* KazMunaiGas offers to buy remaining shares at subsidiary
* Move seen as clearest signal for public offering
By Ron Bousso and David Sheppard
LONDON, July 25 Kazakhstan's state-owned energy
company KazMunaiGas moved towards a possible stock market
flotation in London, confirming on Friday it had approached its
majority-owned exploration company to buy its remaining shares.
Bringing the cash-rich exploration arm back into the
state-owned group is widely seen by analysts as a move towards
the eventual public listing or IPO of the national company,
which operates some of the largest oil and gas fields in the
"It is no secret that an IPO has been previously
considered," a source close to the company said. "This move,
which will give the company a clearer strategic direction,
should be seen in that context."
The share offering would likely take place in London, the
KazMunaiGas (NC KMG) has "made a preliminary approach" to
buy shares it does not own in KazMunaiGas Exploration Production
(KMG EP) at a value of $18.50 per share, NC KMG said.
"Given the preliminary nature of discussions, there can be
no certainty that an offer will be made nor as to the terms on
which any such offer might be made," NC KMG added.
The share offer was at a 40.7 pct premium over the current
value of KMG EP, excluding its cash pile estimated at $4.1
billion. The national energy company already holds a 63 percent
stake in KMG EP.
NC KMG is undergoing a restructuring under chief executive
Sauat Mynbayev. The company accounts for 27 percent of oil and
14 percent of gas production in Kazakhstan.
The national firm has been hampered by significant delays
and huge cost overruns at the giant Kashagan offshore field,
which it jointly owns and operates with a consortium of
international energy majors including ENI, Exxon Mobil, Royal
Dutch Shell, and France's Total.
Kazakhstan's national oil output has slowed as the project,
which was halted just months after starting production last
year, may not now restart until 2016.
KMG EP, which was spun off by the Kazakh national energy
company in a 2006 public listing in Astana and London, produces
more than 250,000 barrels per day of crude oil and sits on
reserves of more than 1 billion barrels.
The company raised over $2 billion in its initial public
offering (IPO). Its current market capitalisation is over $7.5
billion. At 1211 GMT, its share price was up 2.5 percent.
Any offer for KMG EP would not be subject to the UK City
Code on Takeovers and Mergers, KMG EP said in a statement.
The central Asian country produced 1.64 million barrels per
day of oil in 2013, according to the U.S. Energy Information
(Reporting by Ron Bousso and David Sheppard; Editing by David
Holmes and Ruth Pitchford)