Petrom buys back Petromservice for 328.5m euros

Petrom announced the acquisition of the petroleum services branch of Petromservice on Tuesday, with Romania’s largest company paying 328.5 million euros for the supplier that was part of it at some time. Petrom plans to make investments worth 90 million euros and will also add 10,000 new employees to those almost 30,000 it has at present, which the company had been trying to cut back on.
The decision was released publicly on Tuesday during the general meeting of Petromservice’s shareholders, where the possibility of transferring the company’s most important operations to Petrom was discussed. For taking over Petromservice, Petrom paid half the sum collected by the state from the privatisation of the largest Romanian company. Austrian-based OMV paid 1.5 billion euros in 2004, half of which in form of a capital increase. New information on relinquishing the petroleum services division was published in the Official Gazette on September 6, in addition to information included in the notice to attend published on August 17. The new information referred precisely to the transfer, which involved Petromservice’s core business.
“The Romanian market of petroleum services, with the exception of Petromservice, is not able to provide the volume or the service quality that Petrom requires, so we took advantage of this opportunity to buy Petromservice’s petroleum services division, and integrate it into the company,” said Mariana Gheorghe, Petrom’s CEO.
According to Petrom representatives, the approval from the Competition Council is expected by the end of this year, with the transaction to be finalised at the beginning of 2008.
“This will enable us to start an extensive modernisation process for petroleum services, in order to improve both standards and effectiveness. This step will help us get better results and achieve our strategic objectives for our Exploration and Production division,” added Gheorghe.
As a result of the transaction, Petrom will acquire around 1,000 employees. The new employees will supplement a current staff of 30,000, which Petrom was struggling to cut back on in an attempt to minimise costs. Additionally, Petrom representatives say significant investments will be made in state of the art technology, equipment, infrastructure and IT applications. The investments are worth almost 90 million euros and will be carried out over the next few years.