Kazakh state energy firm KazMunayGaz will retain ownership of gas shipping and trading unit KazTransGas despite handing over its management to the sovereign wealth fund, the company's deputy chief executive said on Monday.
KazMunayGaz is the oil-exporting nation's biggest borrower on the Eurobond market, and some analysts had expressed concerns that the government's plan to hive off the gas unit would weaken KazMunayGaz's credit profile.
Last week, KazMunayGaz and its parent company, sovereign wealth fund Samruk-Kazyna, signed an "agreement of transfer to discretionary management," making KazTransGas a direct subordinate of the fund.
However, KazMunayGaz retains ownership of the gas trader and KazTransGas will continue to be consolidated in its financial reports, Deputy Chief Executive Dauren Karabayev told a briefing.
Like other upstream companies, KazMunayGaz's core revenue is vulnerable to oil price fluctuations, with the gas unit's more stable income helping smoothen out the parent company's cash flow. (Reporting by Olzhas Auyezov; Editing by Devika Syamnath)