Bucharest, February 8 / Agerpres/
The management of the national sovereign fund of Kazakhstan Samruk Kazyna, owner of KazMunayGas is interested in Rompetrol experience with the implementation of the Change for Good program aiming at streamlining the activity in Romania in order to apply it at group level, said Adamas Ilkevicus, Chief Transformation Officer of the Fund in an interview for AGERPRES.
He mentioned that their aim is streamlining Rompetrol activity without any intention of “cutting personnel” and underlined that the ambitious plans the company management set for the following years can be regarded as an “example of successful change”.
Regarding this Change for Good program, Can you give us some insight about?
Well, my role here is to listen, to learn what Rompetrol is doing, because I think the management here is having great ideas and we are going over their plans and checking their results, looking at how things were achieved for a simple reason: to understand what can be done better in the future, but also to use Rompetrol as an example that change is possible - which is very important for us. They have a good team of passionate people, who made change possible. Again, I represent the sovereign wealth fund of Kazakhstan, Samruk-Kazyna, which controls a wide range of companies - approximately 700 entities. KazMunayGas is just one of them, and a very important one. We are looking for inspiration and, so far, Rompetrol can be this inspirational story, through what they have managed to achieve in just a couple of years in terms of production and their plans for the future. They introduced some impressive new things already and showed us the ambitious plans for this year. I am convinced this will be a very good success story.
Will this program entail personnel cuts?
That was discussed, because when we say transformation or change the first reaction is "oh, you will probably be cutting jobs", but the message is crystal clear that we have no intention to do so. Why? We wanted to use people in a more efficient way. We have well-trained, intelligent employees, especially in Rompetrol - whether it's the refinery or the petrol stations, people are committed. I don't think the smartest way is to operate cuts on the job side, because we want these people to perform better, to achieve more. For three days now, we learned there is room for improvement and people are doing better, so why stop now? I see no reason. Again, we are learning about a lot of new possibilities. You here are very inventive. You are a new market in the European Union and there is still room for improvement. Given this environment, we have absolutely no intention to operate cuts. Yes, we want efficiency.
Do you think there will be issues at Rompetrol, as an oil company, now that oil prices have dropped?
Rompetrol is more of a downstream company, meaning that it takes crude, refines it, produces fuels and sells them through a retail network, so when the oil is down, the effect on Rompetrol is not negative, because they are getting cheaper oil. If we look at the group as a whole, KazMunayGas is going through challenging times, which is another reason why we need to rethink the way we operate, to be more efficient in our business, how to take care of all the possible costs and benefits for the company. This rethinking is what we call a transformation.
So you think change can be implemented in other parts of the group and other companies?
Yes. What we are looking for is to gain experience from past achievements, to share stories of successful change and bring them to other companies in our portfolio, but this is not just about the power of example. We are looking to share the human capital as well, by taking the smartest people and asking them to join us in our organization and try to make a difference in other companies. Their experience here looks quite successful.
Do you think that KMG financial results will be higher this year compared to last year, because they gave you the dividends? Do you think they will be higher, the dividends?
No, I don’t think so, because last year the drop of the oil price started and when you look at KazMunay Gas as a company, it is really the oil price […]. So, when the oil price drops at this rate, so heavily, you cannot expect high results.
So, we are pragmatic about that and I need to tell you that we’ve been doing different scenarios with quite […] scenarios with what will happen if the oil price reaches 40 or 30 USD, what will happen then and how we will survive and we are planning all this. However, market reality is currently different; we are monitoring the performance of the company very closely. Being a shareholder, we have full trust in the management of the company. I believe we have very professional people who will be doing whatever possible to maintain the best results for the company. Now, speaking about the revenues, I don’t think that’s […] if we’ll exceed the previous years when the price was higher, but, again, this pushes us to look for internal reserves, for efficiency to be implemented, to reduce this negative impact of the oil price.
AGERPRES: is there a possibility of running an IPO at KazMunayGas this or the next year?
Adamas Ilkevicus: I don’t have an answer or certain information on the matter, but I can say that different discussions are being held at the moment. The shareholders and the management of the company are studying different scenarios. The upstream activities regrouped under the name of KazMunayGas Exploration & Production are already listed. Discussions are held whether some changes shall be made to the portfolio, some assets shall be listed or the group as a whole. We are currently analyzing different scenarios but no final decision was made. I hope you understand that the actual market conditions, especially in the petroleum industry don’t allow us making long term forecasts because of the high volatility and low predictability. We analyze and react to the market conditions.
What is your opinion after this visit in Romania?
Well, I could probably share with you some aspects of Samruk-Kazyna as shareholder of KazMunayGas, that we had challenging questions about why KMG actually entered the international market and looking back at the acquisition of Rompetrol we need to say that the first years and first steps in Romania were not very easy. On the one hand, it was an economic situation and on the other hand, there was a cultural aspect; KazMunayGas had no experience working overseas and looking back to these couple of years now I believe this was a very good experience for KMG and for Kazakhstan in general, that demonstrates that we can overcome cultural challenges, even financial challenges and build really efficient teams and work together with international assets. So, this has been taken as a success as a group. So, seeing Rompetrol, meeting people, management here is an inspiration and I am really happy to see what the management is doing here. This will probably boost our next international expansion.
Read the original article in Romanian here: INTERVIU Adamas Ilkevicus