Only one US company among eight contenders left in Petrom race

One by one, the US oil groups are dropping out of the race for the privatisation of Romania’s largest company, SNP (National Oil Company) Petrom. Only two months ago, four American companies had submitted expressions of interest in Petrom (Halliburton, ConocoPhilips, Alon and Occidental), but only one US company, California-based Occidental Oil and Gas Corporation, has actually submitted a non-binding, non-priced offer for the Romanian company. The strongest competitor, ConocoPhilips, left the race without even buying the company’s presentation file.

“Out of the eleven shortlisted companies, TNK BP sent a letter to inform us it was quitting (even before being granted access to the data room). ConocoPhilips did not buy the presentation file, which was bought by nine companies, of which eight eventually submitted non-binding offers – OMV (Austria), PKN Orlen (Poland), MOL (Hungary), Occidental (USA), Gazprom (Russia), Glencore (Switzerland), ENI (Italy), and Hellenic Petroleum (Greece),” Economy and Trade minister Dan Ioan Popescu said yesterday. US company Alon had bought the presentation file but did not submit an offer, the minister added.

At this point, the best-positioned contenders seem to be those companies that managed to secure legal counselling from local law firms. Among these companies – Occidental (counselled by Musat & Asociatii), OMV (which teamed up with Nestor Nestor Diculescu Kingston Petersen) and Gazprom (which retained law firm Racoti Predoiu). However, regional companies are credited with the biggest motivation to take over the Romanian oil company. These companies are MOL (Hungary), OMV (Austria), PKN Orlen (Poland) and Hellenic Petroleum (Greece).

The takeover of 51% in Petrom, scheduled to end in the first quarter of next year, is estimated at some $1-1.4bn by analysts.

However, the US companies’ walkout points to low real interest in Petrom, all the more so as they benefited from political support that was to be of great help in their fight against competitors.

The American exodus began when the consortium comprising Halliburton (USA) – Tender (Romania) – Regal Petroleum (Great Britain) was ousted from the race for failing to meet the criteria stipulated in the privatisation strategy. The consortium officials did not agree with the ministry’s decision and implied they would take this matter to court. The Economy and Trade Ministry said it had received two letters from the law firm retained by the Tender group, that were then sent to the State’s consultant for the Petrom transaction – the consortium comprised of investment banks Credit Suisse First Boston and ING banks and law firm Linklaters Miculitii.

adrian.mirsanu@zf.ro