Erik Sagiyev, CEO of KMG International (Rompetrol): “The Black Sea remains an important strategic direction for KazMunayGas, both for ensuring stable crude oil supplies to European refineries and for supplying the region with petroleum products.”
In a year marked by extremely high geopolitical tensions, both in the region and on the international stage, vision, strategy, swift decision-making, and close cooperation between companies and public authorities can play a decisive role and help ensure stability and energy security.
Against the backdrop of unprecedented pressure on the European market, securing supply routes for raw materials and petroleum products, developing new routes, and maintaining refining capacity in optimal operating condition have become key priorities in the strategies of every country and region.
At the European level, Kazakhstan rose to become the third-largest crude oil supplier in early 2023. In the first half of the current year, it recently surpassed that level, ranking second with a market share of 13.4% (Norway - 12.4%, the United States - 18.5%).
The sustained growth in supply volumes is also supported by the activities of major international companies operating in Kazakhstan, including ExxonMobil, Shell, Eni, Chevron, and TotalEnergies, which cooperate with the national company KazMunayGas. By directly transferring equity stakes in local field exploration projects to European refineries, these energy giants contribute to ensuring stable supplies to the European Union.
Erik Sagiyev holds a key position in Romania’s energy sector and across the wider region as CEO of KMG International, a group of companies wholly owned by KazMunayGas. Since April 2025, he has led one of Romania’s most important corporate groups, which owns nearly half of the country’s refining capacity and operates one of the most extensive networks of filling stations in the region.
In his first interview with the Romanian media, Erik Sagiyev discusses how Rompetrol is navigating the numerous overlapping crises of 2026, as well as the outlook for Kazakhstan’s presence in Romania.
1. All forecasts for this year have been revised in light of events in the Middle East and developments in international markets. How would you characterize 2026 at this point, considering the challenges and opportunities in the oil and gas sector, supply chains, and the refining industry?
It is impossible to reduce such a complex year to a single narrative. Looking back, we can say that, for Rompetrol, 2026 has been a year of strategic resilience, operational consolidation, and maintaining the positive results and high performance indicators achieved in 2025.
We began the year with a scheduled 20-day technological shutdown of our production facilities in Romania to carry out repair and maintenance work. Immediately after its completion, we faced an unprecedented logistics and geopolitical crisis in international markets, which tested global supply chains and raised questions about our ability to meet demand in our key markets: Romania, the Republic of Moldova, Bulgaria, and Georgia.
In this unstable environment, our absolute priority became ensuring an uninterrupted supply of raw materials and the availability of finished products. The flexibility and responsiveness of our commercial operations and supply chain teams enabled us to turn logistical disruptions into opportunities to demonstrate a high degree of adaptability and maintain our businesses at optimal production capacity utilization levels.
It is precisely in moments of extreme pressure that the strategic foundation of our business is put to the test: the strategic partnership between Kazakhstan and Romania. Events during the 2020–2024 period demonstrated that this integrated relationship is the foundation of our structural resilience.
The synergy between the predictability of crude oil supplies from Kazakhstan, the high industrial capacity of the Petromidia refinery, and our regional distribution network creates a unique model. This enables us not only to mitigate the impact of macroeconomic shocks but also to act as a pillar of stability for the region’s energy security.
I would particularly like to emphasize the resilience of KMG International’s entire supply chain: from extraction in Kazakhstan and transportation to the Petromidia and Vega refineries, through refining, and ultimately to the fuel tank of a consumer’s vehicle at one of our filling stations, the wing of an aircraft operated by an airline, or the production of numerous materials derived from our petrochemical products. This well-established, integrated supply chain gives Romania an energy advantage and strengthens regional security during fuel crises.
At the same time, despite the challenging macroeconomic environment, we have managed to maintain a clear development trajectory thanks to the consistent efforts of all stakeholders involved in this process – our employees, shareholders, executive management, business partners, and financial partners – who have placed their trust in our vision and strategy.
We have achieved solid results and record volumes in both processing and sales, while continuously improving finished-product yields and energy efficiency. We have expanded our commercial presence across the region, established new strategic partnerships, and accelerated the transition toward producing higher value-added products.
Furthermore, the commissioning of the new cogeneration power plant at the Petromidia industrial complex marked an important milestone in improving energy efficiency. This objective was also achieved thanks to the flexibility of our technological processes, which enabled us to shift peak electricity consumption from the evening hours to daytime hours throughout the year.
All these measures and decisions have been reflected in robust financial results, significantly exceeding the figures recorded in 2025.
Nevertheless, as managers, we assess these indicators realistically and with a strong sense of responsibility. Our current financial results have also benefited from favorable market conditions and high refining margins, but these temporary circumstances do not offset the consequences of the difficult 2020–2024 period. That period, marked by declining demand due to the pandemic, substantial asset impairments, the consequences of the regional conflict, and additional fiscal measures, required extensive restructuring and placed significant pressure on our debt levels.
Therefore, achieving profitability in 2026 should not be seen as a reason to ease our efforts. On the contrary, it represents a strategic window of opportunity. The financial surplus we have generated provides the capital needed to cover the legacy costs of previous crises and finance the Group’s sustainable transformation.
Our approach to global uncertainty remains unchanged: a long-term vision, strict financial discipline, and the maximization of synergies arising from bilateral cooperation.
2. In the first half of 2026, Rompetrol Rafinare demonstrated an impressive recovery in its financial performance: turnover reached $3.5 billion (Ă25%), while net financial results turned positive, reaching Ă$40.4 million. How do you explain the return to profitability following the losses recorded in the first half of 2025?
As CEO of KMG International Group, I view our operations in a broader context: that of a complex ecosystem comprising more than 40 companies, two refineries of strategic importance in Romania, and extensive distribution networks in Romania, Bulgaria, Georgia, and the Republic of Moldova.
From this perspective, I can state that internal synergy is not merely a theoretical concept. It is the very foundation of our resilience and profitability. No asset, however efficient, can create sustainable value on its own. Success is always the cumulative result of the entire value chain.
Within our integrated business model, this synergy is reflected in our ability to transform global instability into regional resilience. When our commercial division secures and diversifies supply routes, it ensures that the Petromidia and Vega refineries receive the raw materials they need, enabling them to operate at optimal capacity and reduce processing costs per tonne of raw material.
In turn, this industrial efficiency directly supports the operations of our distribution networks in Romania and neighboring countries, transforming refined volumes into energy security for consumers and contributing to improved financial results for the Group as a whole.
The return to profitability in 2025, which continued into 2026, represented a natural financial recovery and confirmed that the efficiency-enhancement measures implemented over the past two years had successfully strengthened the Group’s market position. This recovery reflects the close connection between our operational discipline and our full commitment to our role as a guarantor of Romania’s energy security.
A more detailed analysis of these results shows that the key factor was our strategic decision to significantly redirect fuel supplies toward the domestic market. To ensure supply security and prevent interruptions or fuel shortages in the country, during the first half of this year we increased the share of products allocated to the Romanian market from a historical level of 50–56% to 69–70%.
In this regard, we have maintained and continue to maintain an ongoing, constructive dialogue with the state authorities to identify the most efficient and effective solutions for ensuring domestic market stability while also protecting crude oil supply routes, particularly those originating in Kazakhstan.
These financial results were also closely linked to the excellent operational performance recorded in the first half of 2026, when the Petromidia refinery’s capacity utilization rate reached 98.11%. Operational stability enabled us to achieve a record refining rate of 15,800 tons per day in the third quarter, the highest level in the refinery’s history. In total, Petromidia processed more than 4 million tons of raw materials during the first nine months of the year, exceeding the initial plan and recording its lowest-ever energy consumption index for the January–September period.
Control over every stage of the production and sales process allows us to optimize logistics costs, mitigate geopolitical risks, and maintain structural profitability, ensuring stable results for the Group regardless of the complexity of the macroeconomic environment in which we operate.
At the same time, we approach these indicators with the utmost responsibility. Although favorable market conditions and high refining margins have contributed to the improvement in our current financial results, I continue to be guided in my work by the principles of prudence, discipline, and sustainable development.
Production safety and equipment reliability will always take precedence over the desire to exceed the technical operating limits of our assets solely to maximize short-term production volumes.
Structural stability also depends on transparent cooperation with the state, our partner in Rompetrol Rafinare, a predictable legislative environment, and a balanced operating framework capable of ensuring the Group’s long-term energy security.
3. Regarding tax revenues, in the first half of this year alone, the operations of the key assets managed by Rompetrol Rafinare generated more than $1.3 billion in revenue for the state budget. How do you address disagreements over additional taxation while maintaining a partnership with the Romanian state, which owns 44.7% of Rompetrol Rafinare’s shares?
Our financial contribution to the state budget ($2.1 billion in 2025 and a further $1.3 billion in the first half of 2026) demonstrates a strong partnership with the Romanian state, built on mutual trust and good faith. Nevertheless, we emphasize that a strong economy requires, first and foremost, predictability in legislative, fiscal, and budgetary policies.
The sustainability of a business of this scale depends directly on stringent fiscal measures, such as the minimum turnover tax (IMCA), the turnover tax applicable to the oil and gas sector (ICAS), the construction tax, the solidarity contribution, as well as the logistics costs associated with maintaining strategic reserves. We rightly expect policymakers to establish a balanced regulatory framework and foster constructive, proactive dialogue between the state and major companies, which are pillars of the national economy.
Despite the challenging tax environment and the doubling of logistics costs across supply chains over the past two years, we have fulfilled all our strategic commitments to the Romanian economy. Our contribution is reflected in continued new investments, the support of thousands of direct and indirect jobs, and the provision of stable, uninterrupted supplies of crude oil and petroleum products.
Ultimately, the true results of our work are reflected not only in figures and strategies, but also in every liter of fuel distributed through our filling stations and every ton of petroleum products leaving our refineries. They are evident in our ability to turn losses into profits, in our rigorous approach to operational optimization and, above all, in the responsibility with which we ensure the safe operation of our production assets and protect our employees.
4. Petromidia remains the country's only polymer producer, recording a 12% increase in petrochemical production in the first half of 2026, reaching 44,000 tons. Why does KMG continue to focus on this segment amid Europe's large-scale deindustrialization?
The answer is simple: because we look beyond short-term business horizons and remain committed to a long-term strategic vision. In Europe, where major chemical groups are shutting down production facilities under pressure from high energy costs, we firmly believe that integrated petrochemicals represent a sustainable future for modern oil refining.
Our financial results for the first half of 2026 confirm the soundness of this strategic direction: revenue from this segment increased by 37%, reaching $62.9 million. Regional demand for specialty polymers, low-density polyethylene (LDPE), and polypropylene (PP), which are used in essential sectors such as healthcare, agriculture, and industrial packaging, continues to grow. In this context, our position as the only producer in the Romanian market gives us a significant competitive advantage and a particularly strong strategic position.
From the very beginning of my tenure as CEO, I have made the restart of the low-density polyethylene (LDPE) production unit a top priority. This year, our technical teams took a decisive step forward by launching production of an advanced copolymer characterized by superior performance and a high degree of adaptability to our customers' specialized production requirements. These two major achievements have significantly strengthened the entire segment, demonstrating that the implementation of innovations and industrial integration can ensure high profitability even under the most challenging market conditions.
Our expansion is not aimed solely at increasing production and sales volumes. It is also guided by the same principles of sustainable development that underpin our entire business model.
For 2026, our strategic plan foresees the construction of 13 new filling stations across our Romanian network. Four stations have already opened. This represents an absolute record: for the first time, filling stations have become operational on the Transylvania Motorway (A3). In addition, we have opened two more modern stations on the Suceava ring road.
In the near future, we plan to open another two stations on the Braşov ring road, while the remaining seven projects are at various stages of review, design, and building permit approval. In addition to expanding the network through our own investment efforts, we are developing a further six stations in close cooperation with local operators.
This strategy of expanding our presence at key transport hubs directly contributes to further increasing sales volumes, creating jobs, and supporting local communities. For us, growth is not measured exclusively in absolute figures: we continually reassess its qualitative aspects to ensure that we adapt to our customers' changing needs.
Over the next five years, the Rompetrol filling station will rapidly evolve from a conventional fuel station into a multifunctional hub offering integrated mobility services.
Of course, we will continue to offer high-quality fuel from our Efix range, but the structure of our offering will undergo significant conceptual changes. We expect a rapid increase in the number of stations equipped with fast-charging facilities for electric vehicles, the expansion of spaces dedicated to modern food-service and retail concepts, and a broader range of products with a lower carbon footprint.
In other words, our long-term strategy marks a definitive transition from the traditional role of fuel distributor to that of an integrated service provider for people on the move. The future of energy retail lies in flexibility and sustainable development, and Rompetrol is already at the forefront of this transformation.
5. The conflict in the Middle East and the closure of the Strait of Hormuz have caused sharp fluctuations in Brent crude oil prices, which exceeded $105 per barrel in September 2026. In addition, disruptions to operations at the Novorossiysk terminal occurred in July. How did Rompetrol manage to secure raw material supplies for the Petromidia refinery under such extreme circumstances?
Kazakhstan currently accounts for between 63% and 65% of Romania’s crude oil requirements, which places a significant strategic responsibility on us.
Against the backdrop of the situation in the Black Sea region, crude oil deliveries from Kazakhstan experienced a temporary decline this summer, with supply volumes fluctuating. Nevertheless, thanks to the integrated structure of our Group, we managed to address these challenges quickly. We had prepared for such scenarios by maintaining strategic reserves at the Petromidia refinery and preserving the capacity to use alternative supply routes through the Middle Corridor or the Baltic region.
The Group’s key divisions ensured crude oil deliveries, maintained the operation of production facilities, fulfilled product deliveries to customers, and met their contractual obligations.
Our offshore terminal at Midia, which can accommodate large vessels of up to 160,000 deadweight tons (DWT), represents a significant logistical advantage. It provides the flexibility needed to protect the Romanian market from major supply disruptions caused by international crises.
In a context of profound uncertainty on the international stage, the fundamental value of our business lies in our ability to build strong, predictable partnerships in which all commitments are fully honored.
6. The domestic market is also being affected by the overall situation. With only two major refineries currently operational, you are effectively a guarantor of national energy security. How difficult is it to manage such a responsibility?
Against the backdrop of reduced refining capacity nationwide, the strategic partnership between Kazakhstan and Romania, as mentioned earlier, has played an important role in compensating for the resulting supply shortfall, particularly in diesel. This cooperation has also strengthened Romania’s position in the regional market.
In response to these economic pressures, we decided that the Petromidia refinery should prioritize redirecting its deliveries toward the domestic market. This is because Petromidia is Romania’s largest refinery of its kind, accounting for 46% of the country’s total refining capacity and directly meeting approximately 30% of national fuel demand. These figures place a significant strategic responsibility on our shoulders.
For this reason, our objective this year has been to ensure the uninterrupted operation of the facility, while complying with the highest safety standards and maintaining a stable flow of raw material supplies. In addition, we have reviewed and optimized the operations of our distribution channels, filling stations, and petroleum product depots, as well as our logistics networks, including road and rail transportation, to prioritize domestic demand.
We have ensured priority deliveries to Rompetrol filling stations and our partner networks, as well as to institutional customers, including public transport operators and national security services.
One of our objectives has been, and continues to be, protecting the economies of the countries in which we operate against the risk of fuel shortages, even when extreme volatility in international benchmark prices, demand for petroleum products, and delivery volumes places enormous pressure on prices at filling stations.
7. Mr. Sagiyev, managing such a large enterprise, with more than 2,000 specialists employed at the Petromidia refinery alone, presents certain challenges, particularly against the backdrop of gradually rising inflation and a severe shortage of qualified personnel in technical sectors. How do you maintain dialogue with the refinery's trade unions, and what strategies do you use to retain key technical personnel in Romania?
The value of our industrial facilities is complemented by our employees' unique expertise. We fully understand the current situation in Romania, which is why we maintain an ongoing dialogue with our social partners and trade unions, based on mutual respect and economic pragmatism.
Nevertheless, we must not forget that, since the end of 2022, our company has been operating under an exceptional fiscal and budgetary regime, dominated by solidarity and turnover taxes that do not reflect the economic realities of a capital-intensive industry with traditionally low margins, such as oil refining.
To date, the Group has consistently recorded losses, particularly since 2020, when the COVID-19 pandemic began, as well as as a result of successive overlapping crises. For example, Rompetrol Rafinare's cumulative losses for the 2020–2025 period exceeded $550 million.
These losses were not the result of our own mistakes, but rather of factors beyond our control, as well as significant investment-related expenses. In recent years alone, millions of dollars have been invested in scheduled refinery shutdowns to carry out major maintenance and turnaround works. These are large-scale projects required to ensure that our refineries operate optimally and comply with the highest safety standards, primarily to protect our employees.
Consequently, like any other business with high turnover but low margins, we are forced to rely on credit facilities. Although these create an additional financial burden, they simultaneously enable us to maintain our operations, preserve jobs, and ensure the continued functioning of Romania's energy sector. Furthermore, mandatory investments and development-related expenditure have resulted in the accumulation of a certain level of debt, which must be managed with the utmost caution.
Preserving jobs and our ability to secure the resources necessary to maintain and develop our business depend directly on our capacity to strike a delicate balance between current remuneration levels, existing financial obligations, and long-term growth prospects.
Human capital is an absolute priority for us: its development, fair compensation, predictability, and social planning that benefits every employee of the Group and the entire community in which we operate.
Furthermore, as in any other industry, and particularly in our day-to-day civic engagement, the value of human capital is measured not only by talent, but also by professional discipline, mutual understanding, overcoming difficulties together, sharing responsibilities, and, ultimately, the rightful achievement of material well-being.
I am referring not only to physical discipline, but also to financial discipline, technical discipline, and corporate ethics.
8. We have discussed the petrochemical sector in terms of production volumes. But how competitive are the specialized production facilities in Năvodari in the face of fierce competition from cheap imports from Asia and the Middle East – regions where raw material and energy costs are traditionally significantly lower?
Technological integration is our strategic advantage, enabling us to withstand such market imbalances. Our petrochemical division does not operate in isolation: it is directly connected to Petromidia's crude oil refining processes.
Our production units obtain propylene directly from our internal production stream, which completely eliminates external logistics costs. As far as ethylene is concerned, the expertise of our trading division plays a decisive role: even under extremely challenging market conditions, we are able to secure reliable supply routes and stable sources of raw materials, while fully complying with all measures and sanctions imposed by the European Union.
Against the backdrop of an influx of imports from Asia, our strategy is not to compete exclusively on the basis of volumes of inexpensive mass-market products, but rather to focus on high-quality polymers sought after by high-value-added European industries. We are targeting specialized market segments, including medical device manufacturers, modern food packaging producers, and manufacturers of specialized industrial components.
As the only facility of its kind in Romania, we have a unique competitive advantage: shorter delivery times and commercial flexibility, areas in which no supplier from Asia or the Middle East can match us. While our global competitors deliver products over a period of several weeks or even months, we can respond to regional demand in real time, turning our proximity to customers into a significant competitive advantage.
This efficiency is further enhanced by close, direct, and prompt cooperation between our sales teams, production division, and commercial partners. This local synergy allows us to tailor technical solutions to specific requirements and provide customers with direct technical assistance as quickly as possible.
9. Let's look at the figures and margins. In July and August, insurers massively withdrew war-risk coverage in the Black Sea; insurance premiums increased to 1–2% of a vessel's value, while transit fees through the Bosphorus and Dardanelles increased by 15%, reaching $6.70 per net tonne. How have these logistics costs affected Rompetrol's gross refining margin, and what measures have you taken to ensure net profitability?
The partial disruption of oil terminal operations, the sharp increase in Black Sea insurance premiums to more than $10–15 per ton, and the rise in the transit fee through the Bosphorus to $6.70 per net registered ton (NRT), which came into effect in July 2026, clearly placed significant additional pressure on our cost structure.
To protect our financial and operational performance, I believe we acted swiftly by implementing two clear measures: we suspended large-scale purchases of raw materials at peak market prices and strategically redirected finished-product volumes toward the domestic market and the markets of our subsidiaries in neighboring countries.
10. How can the Port of Constanţa strengthen Romania's strategic position within the Middle Corridor by 2040, and what could the projected growth of this transport corridor, as reflected in World Bank reports, mean for the country's economic development, investment attraction, and job creation, particularly in the Dobrogea region?
As you rightly pointed out, World Bank data indicate that developing the Middle Corridor by 2040 could attract more than $55 billion in investment in infrastructure and related sectors. Across all the countries covered by the report, these investments, combined with reforms designed to improve transport and trade efficiency, could significantly increase freight volumes, reduce transit times, accelerate economic growth, and create new jobs.
The Port of Constanţa, together with the Port of Midia, could play a central role in this process. Their strategic geographical location, combined with investments in railway and road infrastructure along the Trans-European Transport Network (TEN-T), provides a solid foundation for connecting maritime transport with European markets.
In my opinion, closer integration between maritime, river, and rail transport, particularly through the Danube Corridor, could further improve logistics efficiency, reduce transit times, and strengthen Romania's competitiveness as a regional transport hub.
I am convinced that Rompetrol and KMG International are well positioned to contribute to these transformations. Building on the capabilities of the Petromidia refinery, as well as our integrated trading and distribution networks, we can contribute to the development of regional energy and trade flows while simultaneously strengthening economic ties between Romania and Kazakhstan.
Corporate Communication and Public Relations
KMG International
