British assess Petrom reserves

UK’s Gaffney, Cline & Associates was retained by the consortium comprising Credit Suisse First Boston and ING to assess the current oil and natural gas reserves of SNP (National Oil Company) Petrom. The conclusions of the new sub-consultant could lead to revising the entire audit report of the company, Economy and Trade Ministry representatives said. “The consortium (i.e. the consultant for SNP Petrom’s privatisation) hired Gaffney, Cline & Associates to conduct an audit of the current oil and natural gas reserves of the largest oil company in Romania,” the representatives of the Office for State’s Interests and Industrial Privatisation (OPSPI) told Ziarul Financiar.

The results of the reserve assessment could modify the value of the company and therefore the price of the deal. At present, the most likely price a strategic investor would have to pay amounts to approximately $1bn for directly buying 33.34% in Petrom and then participating in a capital increase to acquire up to 51%. Gaffney, Cline & Associates is an international management and technology consulting firm, specialising in audits for oil and gas companies.

Petrom’s reserves are estimated to amount to 128 million tonnes of oil and 101.225 billion cubic metres of natural gases, according to the data provided by the company. It has both on-shore and off-shore reserves in Romania and abroad (Kazakhstan). Petrom’s annual revenues amount to more than $2.2bn. Market capitalisation reaches $1.6bn and net profit $69 million. The deadline for SNP Petrom’s privatisation is March 31, 2004.

A number of 15 companies have submitted expressions of interest so far. The suitors include Western oil companies (ENI), Russian companies (TNK BP, Gazprom), those interested in an expansion in the region (MOL, OMV, PKN or Hellenic), traders (Glencore) or several other companies or investment vehicles that are virtually unknown on the Romanian market.
adrian.mirsanu@zf.ro