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Eyeing growth Petrom sets targets until 2010

  • Stabilize production level at 210,000 boe/day in Romania until 2010
  • Raise refinery utilization to 95% by 2010 and comply with EU product quality by 2007
  • Opening of 250 Petrom V filling stations
  • Gas marketing volume above 7 bcm annually in Romania
  • Investments up to around Euro 3 bn until 2010

Petrom, the largest oil and gas producer in South-Eastern Europe, sets targets for the company growth until 2010. Petrom will stabilize the oil and gas production volume at 210,000 boe per day until 2010. The company will raise its refinery utilization significantly to 95% until 2010 and will comply with EU product quality by the end of 2007. In addition, the company will set new standards in its gas stations business, building 250 Petrom V filling stations until 2010. In the gas business, Petrom will increase its gas marketing volume to over 7 bcm per year in Romania with a market share of more than 35%. A total amount of the investments of around EUR 3 bn until 2010 will sustain the growth of the company up to 2010. Petrom CEO Gheorghe Constantinescu stated:” Petrom has the economic force needed for significant investments as well as clear strategies to allow the company to develop under the best conditions and to meet the requirements of the international market. We set strong objectives and we are determined to successfully achieve them.”

Advanced technology to refurbish exploration and production

Significant investments of more than EUR 300 mn per year until 2010 and international know-how will enable Petrom to become the flagship producer of the South Eastern European oil and gas industry. “All our activities focus on reaching a higher level performance; as we consider ourselves the backbone of the company we undertake all the necessary measures to secure its long term future”, said Werner Ladwein, Member of the Managing Committee, responsible for upstream operations. With current reserves of around 1 billion boe, the company will stabilize the daily production at 210,000 boe in Romania until 2010. The reserves of Petrom arebeing audited in accordance with international standards.
Centralized management functions together with modernization and re-organization of field operations will keep the production costs under control.
Company growth entails the expansion of exploration and production activities in the Caspian Sea region. As a result, until 2010, the reserves replacement rate is expected to reach 70%. Up to EUR 100 mn per year are intended to be spent in exploration only. The implementation of an efficient seismic system, the new technologies, especially 3D and the experience of Romanian and Austrian professionals will definitely provide solid grounds to achieve the set objectives.

Full control of the refining capacity

To meet the increasing demand of oil products, the Petrom refineries will increase their efficiency, production and the product quality in order to cover market demand. Investments in refining and marketing will come to a total of EUR 300 mn per year until 2010. By end of 2007, extensive and steady modernization processes will bring the products of the two refineries in line with the European environmental and quality standards. The utilization rate of the refineries will go up to 95% (HY 2005: 79%) due to optimized asset utilization in both Arpechim and Petrobrazi refineries. Centralization of the procurement and maintenance systems, giving real time information on crude production and crude types, administration of the two refineries as one (e.g. quality, profit, production level, maintenance and the exchange of semi-finished products between refineries) will bring on costs reduction. “We are the largest refining operator on the Romanian market, and we’ll consolidate our leadership position providing the best products” , said Florian Constantinescu, Member of the Managing Committee, responsible for Refining.

Modern and convenient network of more than 600 filling stations

The company development on the oil products distribution market is marked by its competitiveness and dynamism. Permanent assessment of the trend of this segment as well as of the customers’ requirements calls for forward-looking solutions. Accordingly, 250 Petrom V filling stations will be built until 2010. The stations will be a meeting point for the mobile consumer. The conveniences offered by Petrom V filling stations range from basic services in a filling station to additional ones (restaurant, terrace, children playground etc.), as well as a large product line that meet the most various demands. The introduced Full Agency concept also certifies the dynamism of the fuels market and leads to great performance as to the products and services quality in the context of costs reduction. Petrom network will bring about a market share of about 30%. “Our customers will certainly appreciate the news in Petrom’s network, as all the changes are made to their benefit”, stated Tamas Mayer, Member of the Managing Committee, responsible for Marketing.
Moreover, Petrom will develop a competitive export position both in products (e.g. Turkey) and will also supply neighborhood retail markets (e.g. Bulgaria and Serbia).

Gas business to grow bigger

Petrom grants a great importance to the gas business, a strategic factor in the profitable growth of the company. The company will make use of the opportunities of the market liberalization. The company analyzes whether own storage facilities can increase the competitiveness of the Petrom gas business. Up to 2010, Petrom’s market share in the Romanian gas market will rise to about a third, and the sales will amount to over 7 bn cubic meters in Romania.

Modernizing to reach international standards

“The company has already taken important steps, in order to achieve a strong position on the South-Eastern European oil and gas market. Not only the core activities are being evaluated and improved but also their approach is done in a modern manner, according to international standards. Meanwhile, the employees benefits from development and training courses, the efficiency of the current organisation and procedures is being increased, so we can achieve maximum performances from de employees. We pay great importance to the health and security of the employees as well as to environment protection, and therefore we initiated far-reaching programs for the implementation of the best international procedures, which will allow full alignment of Petrom to the OMV HSEQ reporting and management systems”, added Gheorghe Constantinescu, Petrom CEO.

Background Information
Petrom SA

Petrom is the largest Romanian oil and gas group, with activities in the business segments of Exploration and Production, Refining and Petrochemicals, as well as Sales and Marketing. Petrom has estimated oil and gas reserves of 1 billion boe, refining capacity of 8 million metric tons and 600 filling stations. In 2004 the sales revenue of Petrom was EUR 2,143 million, EBITDA was EUR 28 million. Since December 2004 OMV, the leading oil and gas group in Central Europe holds a 51% share in Petrom. OMV is active in Refining and Marketing, Exploration and Production, Gas as well as Chemicals in 28 countries on five continents. The Romanian state holds 40.74% of Petrom shares, the European Bank for Reconstruction and Development, 2.03% and 6.23% are owned by minority shareholders.