Petrom

OMV Petrom S.A.

Type	Subsidiary of OMV (BVB: SNP)
Industry	Petroleum
Founded	1991
Headquarters	PetromCity, Bucharest, Romania
Key people	Mariana Gheorghe, CEO
Products	Petroleum products, Petrochemicals, Microelectronics chemicals
Revenue	3.56 billion EUR (2010) (Bucharest Stock Exchange reporting standard)
Net income	321 million EUR (2007)
Total assets	€ 13.19 billion RON
Employees	24,662 (2010)
Parent	OMV

Petrom (BVB: SNP) is a Romanian oil company, the largest corporation in Romania and the largest gas and oil producer in Eastern Europe operating in several countries:

• Romania - largest company;
• Moldova - 2nd largest company, 31% market share;
• Bulgaria - 3rd largest company, 18% market share;
• Serbia and Montenegro - 3rd largest company, 13% market share.

History

In late 2004, Petrom was privatized by the Romanian state and sold to Austrian oil company OMV. As of 2005, it was the largest privatization deal in Romania's history.

Apart from its operations in Romania, the company operates in Bulgaria, Serbia, Hungary, Moldova, Kazakhstan, Iran and Russia. In Moldova it operates 73 filling stations, being one of the leading oil companies, alongside Lukoil. In Hungary there are 2 Petrom filling stations.

Petrom owned until 2005 a number of six offshore drilling platforms of which five, GSP Atlas, GSP Jupiter, GSP Orizont, GSP Prometeu and GSP Saturn were sold to Grup Servicii Petroliere for US$100 million.

In January 2006, Petrom purchased OMV's operations in Romania, Bulgaria and Serbia and Montenegro.[1] As a result of the transaction, 178 OMV stations operating at the highest standards belong now to Petrom and will continue to operate under the OMV brand. With significant investments of €500 million until 2010 in the Marketing business alone, Petrom is attempting to consolidate its leading market position in South Eastern Europe.

Typical Petrom Gas Station in Iaşi, Romania

In 2007 the company produced 5.5 billion m³ of natural gas and 191,000 bpd of crude oil.

In 2007, Petrom signs the construction contract for Petrom City, the new company headquarters.

In 2008, Petrom signed a contract to build power plant Brazi with the consortium of General Electric and Metka. The consortium will build and deliver turnkey by September 2011, will be producing electricity and steam combined cycle, which will run on natural gas. The contract value exceeds 400 million Euro.

From 1 January 2010, the Extraordinary General Meeting decided to change the name of Petrom oil company to OMV Petrom.

On February 1, Rainer Schlang became member of OMV Petrom S.A.’s Executive Board, responsible for Marketing. He replaced Tamas Mayer, who took over new responsibilities within OMV Group.

In April 2010, Petrom expanded portfolio of its projects in terms of electricity production through the acquisition of 100% of the SC Wind Power Park SRL. Dobrogea Wind Power Park holds a draft of wind power generation for which all permits were obtained, with a capacity of about 45 MW. Petrom will build and operate a wind powerplant, which is expected to enter production in mid 2011.

On May 18, Petrom announced the conclusion of a very successful offshore campaign in the Lebada Est and Lebada Vest fields, located at the Histria block in the Black Sea, using pioneering technology in Romania. Following this offshore campaign, additional production of more than 300,000 boe is expected in 2010 from two existing wells (LO2 and LO4) and a new well drilled (LV05).^{[citation needed]}

On June 1, Petrom announced the start-up of the Hurezani gas delivery system, a project intended to optimize gas delivery into the national transportation network in periods when pressure in the system is very high.^{[citation needed]}

On July 12, Petrom announced the signing of a 15-year production enhancement contract for several fields in the area of Ticleni, Southwest Romania, with Petrofac, a leading international provider of facilities solutions to the oil and gas production and processing industry. Petrofac will perform services in the respective fields in order to maximize production while improving operational efficiency. The partnership targets cumulative production enhancement out of nine onshore fields in the Ticleni area by at least 50% in the next five years.^{[citation needed]}

On September 6, Petrom announced the sale of the 74.9% stake in Ring Oil (Russia) to its minority partner Mineral and Bio Oil Fuels Limited (MBO).^{[citation needed]}

From October 1st 2010, Petrom has completed the consolidation of marketing activities in Romania in a single entity, OMV Petrom Marketing SRL.

PetromCity, located in northern Bucharest, serves as the company headquarters

On November 24, Petrom announced two changes in its Executive Board. Starting January 1, 2011, by the decision of Petrom’s Supervisory Board, the Executive Board will have two new members: Daniel Turnheim, Chief Financial Officer and Hilmar Kroat-Reder, responsible for Gas and Power. The two new members succeed Reinhard Pichler and Gerald Kappes respectively, who took over new responsibilities within OMV Group.^{[citation needed]}

In December 2nd 2010, Petrom inaugurated Petrom City, the headquarters that will host the company’s central operations. Situated in the Northern part of Bucharest, it will be used by around 2,500 employees from 7 headquarters of the company in Bucharest and Ploiesti. The employee relocation process started in the fourth quarter of 2010 and is estimated to be finalized in the first half of 2011.^{[citation needed]}

In 2010, Petrom inaugurated Hurezani gas delivery system designed to optimize gas supply to the national transport network. The system includes a new compressor station at Bulbuceni, 11.5 km of new pipe station and a new measurement of the gas delivery point Hurezani to adapt to changing parameters of the gas flow and pressure.The total investment budgeted amounts to about 135 million euros.

Petrom Cross

Petrom organized in 2008, 2009 and 2010 Petrom Cross, an event in which the company builds a bike trail meter for each participant. 4,200 feet (1,300 m) of trail bikes have been achieved from the 2009 and 2008 editions.

Privatization controversy

The Petrom privatization was realized during the last months of the Adrian Năstase government. In December 2004, OMV obtained a 51 per cent stake in SNP Petrom SA.

Major Romanian newspapers published articles criticising the privatization of Petrom, on the grounds that last-minute unadvertised moves gave Petrom all of Romania's oil and gas reserves just before the privatization contract was signed. It was claimed that this move gave away the control of the country's national resources

As a consequence, OMV/Petrom has a de facto monopoly on the oil production of Romania. Moreover, the state did not impose price controlling clauses in the privatization contract, so that Romanian-produced petroleum is sold in Romania at the same price as imported petroleum.

Internal company manoeuvres allowed the price to increase. As reported in Evenimentul Zilei (a leading daily newspaper in Romania), translated from Romanian:

At Petrom, 159 litres of gas cost 197 dollars. The price is 15 times bigger than the extraction costs from Romanian reserves. Freshly extracted, one oil barrel is worth 12 dollars, but the price increases to 46 dollars as it reaches the gates of the refinery.

The OMV-Petrom case must be clarified. A simple computation shows that simply "selling" the oil between the Exploration-Extraction Division and the Refining Division brings OMV/Petrom a profit of some 32 dollars per oil barrel.

External links

• Official Site (Romanian)
• Official Site (English)
• Annual Report 2008
• Respect for the future – results 2009
• Petrom on Facebook
• Petrom on Twitter
• Petrom on Youtube
• Petrom Press Office on Youtube
• Petrom on Flickr