OMV to finance Petrom for Kazakhstan operations

SNP Petrom has given up a loan worth 60 million euros from the European Bank for Reconstruction and Development (EBRD), which it planned to use to finance its operations in Kazakhstan. Instead, the necessary funds will be released by the Austrian OMV. The Austrian group is about to finalise talks for the takeover of 51% in Petrom.

“OMV will come up with sufficient funds and there is no use in us contracting a loan to finance our operations in Kazakhstan,” Gheorghe Constantinescu, Petrom general manager, told Ziarul Financiar.

OMV is negotiating the direct purchase of a stake of 33.34% in Petrom’s stock, in the wake of which it will have to participate in a capital increase in order to hold a final 51% in Petrom stock. The price to be paid by OMV for the stake will stand at somewhere between 600 and 850 million euros, according to estimates by sources on the Romanian oil and banking markets. Adding the entire contribution brought by OMV in the second phase of the transaction, the total value is likely to go to 1.3-1.4 billion euros.

Petrom is one of the top producers of crude oil and gas in Central and Eastern Europe, considered by many experts as being the most attractive asset of the company. Petrom produces 5.8 million tonnes of crude oil per year and 6 billion cubic metres of gas, while its crude oil reserves stand close to 900 million barrels. Following the transaction, OMV, with a smaller crude oil and gas production in comparison to Petrom’s, will become the most powerful oil group within this sector in the entire region. The Austrians have voiced their interest in Petrom’s operations within Kazakhstan from the very beginning.

At this moment, Petrom’s production in Kazakhstan is not significantly large.

Petrom owns licences in Kazakhstan for Tasbulat, Turkemenoy and Akstas deposits through the Tasbulat Oil Corporation. Of these, only one field is currently being exploited, at a level of 200 tonnes each day. This production is entirely sold on the foreign markets of Central Asia.

During the 2000-2002 period, investments made with regard to the exploitation of these deposits exceeded 35 million dollars.

The exploitation of the other two deposits is scheduled to begin this year, according to the latest available information. Last year, Petrom announced its strategy to boost investments directed towards the above-mentioned area so as to reduce the investment-recouping period. OMV’s cash flow amounts to about one billion euros per year.
adrian.mirsanu@zf.ro