KazMunaiGas eyes foreign borrowings to grow

/REUTERS, Astana, July 28, 04/ - Kazakh state oil and gas firm KazMunaiGaz (KMG) said on Wednesday it planned to raise a syndicated loan and issue a Eurobond by the end of this year as part of its 2004-06 development programme. "The main task now is to get a good credit rating for the company, and we hope to tap markets already this autumn, if market conditions allow us to do so," KMG Managing Director Aidan Karibzhanov told Reuters in an interview. He said that the company aimed to get an additional loan of up to $300 million from French bank BNP Paribas and Swiss-based firm Euromin S.A., with whom it signed a similar credit agreement in March. Karibzhanov said state-run gas transportation firm KazTransGas, part of the KMG holding, hoped to issue a $250 million Eurobond this autumn and had selected ABN AMRO Bank and J.P. Morgan to lead manage the issue. "We are working with rating agencies these days," Karibzhanov said. "They (KazTransGas) have announced plans to borrow $250 million, but in principle they may borrow more if there is high demand on the market." KazTransGaz is rated "BB" by Standard & Poor's. In March this year KMG announced it planned to borrow $1.3 billion from foreign and domestic lenders in 2004-06 to fund its development, including in the oil-rich Caspian Sea shelf. KMG said on Wednesday that in line with its revised plans, approved by the government, it now aimed to invest in its development a total of 328.2 billion tenge ($2.4 billion). It gave no details. GAS PROJECTS Karibzhanov said the modernisation of KazMunaiGaz equipment might easily cost "billions of dollars", and apart from that the company planned to boost the capacity of the main regional pipeline which runs across Kazakhstan and ships natural gas from Central Asia to Russia. "(Russian gas monopoly) Gazprom is likely to be interested to boost shipments of Central Asian natural gas, and we want KazTransGaz to be ready for this situation which may emerge in a few years," Karibzhanov said. Gazprom already buys large volumes of natural gas from neighbouring Turkmenistan, and it now plans large-scale investment in gas fields in another regional neighbour, Uzbekistan. Oil transportation firm KazTransOil, which also forms part of KMG, plans to refinance its $150 million, five-year Eurobond launched in June 2001, Karibzhanov said. The bond had been due to mature this month. Last year KazMunaiGaz raised its oil and gas condensate output to 7.9 million tonnes (158,000 barrels per day) from 7.4 million tonnes (148,000 bpd) in 2002. The company's net profit stood at around $490 million in 2003, rising 18.9 percent over the previous year. [2004-07-28]