The KazMunayGas IPO is planned for after Year 2018, Ardak Kasymbek, the company Economy and Finance Managing Director reported during the Fitch Ratings’ 10th Annual Conference on Kazakhstan in Almaty. 
“We have plans to IPO KazMunayGas.  In my view, it will be more realistic to accomplish IPO after 2018. In its present condition, the company is not ready for IPO. At the first stage, it will be necessary to run a rather big-scaled privatization of the KMG subsidiaries.  In total we have 63 companies, out of which 9 were included in the first list (privatization list) …Probably, it will be partial withdrawal of mother company from subsidiaries and their charter capitals, i.e. we will not mandatorily sell 100% of shares in our plants” – Mr. Kasymbek added.
He emphasized benefits from privatization of the KMG subsidiaries – “Our plants have grown up a rather big body of debt, some USD3 billion, so it is clear that selling control shares in companies will allow us to deconsolidate the aggregate debt. At the second stage, we will sell all other companies, and those are mainly service companies.  We do not, in the principle, anticipate high revenues, we are ready to withdraw from those assets for rather reasonable prices” – Mr. Kasymbek emphasized. 
The presenter clarified that KMG was undergoing transformation – “we reckon that it is necessary to make a rather simple and mobile organization of company, which is complicated in management, not transparent and not effective…At present, we have 9 tiers of management within the company: daughter companies, grandchildren, great-grandchildren and so on.  In the near 2 to 3 years, as we plan, we will create a three tier National Company KazMunayGas management system. Only once measures I discussed earlier are successfully implemented, shall we be in position to commence IPO.  By that time, we of course hope, the price conjuncture will be better, compared to what we have at present” – KMG Economy and Finance Managing Director clarified.
Mr. Kasymbek added that the company budget for 2016 was assessed based on USD30 per 1 bbls of Brent and underlined that it was a rather conservative approach – “In average, the whole group of companies exports Black Gold with the USD3 to USD4 discount.  In the last two to three years, we have been actively optimizing our expenditures.  Now, based on the budget we have, we can say that all of our main oil producing companies are not unprofitable, i.e. they generate not big amounts of revenues”.
Also, Mr. Kasymbek reported that in the past year KMG managed to significantly reduce its debt – from USD19 to USD10 billion – “That happened due to support from the Government and Samruk-Kazyna National Wealth Fund.  At present, we do not plan to increase the debt.  With the oil price at USD30-USD40 per 1 bbls, we consider we will be capable of not violating covenants.  Our forecast of average annual oil price for 2016 is USD30-USD40 per 1 bbls” – Mr. Kasymbek added. 
Let us be reminded that Brent price was USD46.08 per 1 bbls and that the Chairman of Samruk-Kazyna Umirzak Shukeyev earlier communicated that KMG planned to enter IPO by 2018. 

Source: kapital.kz