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Strategy for 2015: leading integrated energy player in Southeastern Europe

  • Continue sizeable investments to ensure business sustainability and growth
  • E&P: Aim to largely offset natural decline and unlock exploration and production potential 
  • R&M: Maximize integration value and strengthen position on fuels market
  • G&P: Market leader on Romanian gas market and important power generation supplier

Petrom, the largest oil and gas producer in Southeastern Europe, announces its strategy for the next five years. After a profound and successful restructuring and modernization process, Petrom aims to become the key player in the regional energy market. 
Mariana Gheorghe, CEO Petrom: “In order to reach our objective of becoming the leading integrated energy player in SEE, with increased performance and flexibility, we will focus our efforts on consolidating and expanding the hydrocarbons business, on business portfolio diversification through power production, on improving efficiency and maximizing the integration value in all units. Against the background of major economic and environmental challenges Petrom continues to invest in key projects to maximize performance. In this way, we will secure our sustainable growth and ensure a diversified portfolio of energy products, from fuels to gas and power, at EU quality specifications for our customers. With annual investments of more than EUR 1 bn, we will continue to be a significant contributor to economic growth in Romania through the multiplying effect of our investments.” 

E&P: Aim to largely offset natural decline and unlock E&P potential 
The exploration and production activity will focus on securing long-term oil and gas supply and develop activities in the Caspian Region.
In Romania, optimization of oil and gas production will be achieved by both applying the latest technologies as well as through partnerships with other operators on selective fields.
The key projects aim to re-develop 6-8 major fields, to finalize infrastructure modernization projects on 3-5 fields, and to de-bottleneck the gas system and install gas compressors. Also, following the first deepwater exploration drilling scheduled for 2012, the company aims to complete the deepwater offshore appraisal and start development by 2015. Moreover, in order to capitalize on synergies between E&P and E&P Services, the two activities will be completely integrated by 2012.
In Kazakhstan, the focus will be on increasing production from Komsomolskoe field (during this year) and start production of the Kultuk field.

R&M: Maximize integration value and strengthen position on fuels market
In order to maximize the value of the integrated operation at Petrom, the Petrobrazi refinery will be modernized and its nameplate capacity will be streamlined to process 100% domestic crude. The modernization process aims at reducing the energy loss to 10% (from 14% in 2004), increasing the yield structure of diesel and aviation fuel to approximately 45% (from 30% in 2004) and reducing heavy fuel to approximately 7% (from 15% in 2004).
With regard to its presence on the Romanian fuels market, Petrom aims at increasing annual throughput per filling station at approximately 5.2 mn liters (from 4.9 mn liters in 2009).

The marketing activities in Romania will be consolidated in a single entity, OMV Petrom Marketing SRL, for process optimization, which will generate an increased efficiency of cost management. The company will focus on Petrom and OMV brands, with the PETROMV filling stations being re-branded, some of them to OMV brand and some to Petrom brand.

In the gas business, one of the main objectives concerns domestic gas price convergence to import gas prices. The company also aims to expand gas marketing into neighboring countries. However, this depends on connecting the Romanian transport system to the European one. Petrom is also considering the appraisal of locations in order to enter the gas storage business, which should also support the Nabucco project.
In order to position itself as an important power supplier, Petrom aims to reach a market share of up to 10% through the enlargement of its portfolio in this activity. The company has already taken the first steps in this market with the start of construction of the Brazi power plant. In the context of growing electricity demand and the obligations undertaken by Romania in terms of CO2 reduction and clean energy development, Petrom has given itself a competitive advantage: the first modern power plant - a greenfield project - in an industry characterized by the prevalence of aging assets which face difficulties in reaching European environmental standards. The company aims to form a diversified portfolio which includes both gas-fired capacities as well as renewable capacities, especially wind power, thus benefiting from the advantages of both technologies.

Sizeable investments for business sustainability and growth
Sustainability represents the foundation of all projects and activities at Petrom, starting from growth and diversification principles, financial discipline, corporate governance and business practices, up to employees’ development and CSR. Petrom will continue to grant special attention to HSEQ activities, operational and energy efficiency and strict cost management.
Petrom’s objective regarding sustainability consists of improving the company’s rating at Prime mid range.
In order to support the company’s sustainable development and growth potential, investments of more than EUR 1 bn per year are needed. Therefore, the company will focus on securing financing sources through a combination of strict cost management and optimization initiatives as well as a share capital increase of up to EUR 600 mn according to the authorization received from our shareholders. In addition, we intend to pursue gas price convergence and seek further access to credit markets whilst maintaining our prudent financial management.

OMV Petrom SA
Petrom is the largest Romanian oil and gas group, with activities in the business segments of Exploration and Production, Refining and Marketing as well as Gas and Power. Petrom exploits estimated proved oil and gas reserves of 823 mn boe in Romania (854 mn boe at Group level), has an annual refining capacity of 8 mn t and holds around 550 filling stations in Romania. The company also has an international network of 268 filling stations located in Moldova, Bulgaria and Serbia. In 2009, the turnover of Petrom was EUR 3,029 mn and EBITDA was EUR 696 mn. OMV Aktiengesellschaft, the leading energy group in Central and Southeastern Europe holds a 51.01% share in Petrom. OMV is active in 12 Central European countries in its Refining and Marketing business segment and in 17 countries on four continents in Exploration and Production. The Ministry of Economy holds 20.64% of Petrom shares, the Property Fund SA holds 20.11%, the European Bank for Reconstruction and Development 2.03% and 6.21% is free float traded at the Bucharest Stock Exchange.