Petrom's Arpechim refinery forced to close

The closing down of the Arpechim refinery following the suspension of the integrated environmental authorisation by the National Environmental Protection Agency in Pitesti, generated a 4.7% drop in Petrom’s shares, with the company losing around 430 million euros of its market value. The decision to close down the Arpechim refinery came as a result of Petrom failing to comply with the obligations stated in the action plan on environmental protection. The shutdown of the refinery means that half of Petrom’s refining capacity will be abruptly cancelled and an approximately 15% market share could be taken by the company’s rivals. The refining branch of Petrom conducted a business worth 2 billion euros through its two refineries. The closing down of Arpechim, which in 2006 refined 3.4 million tonnes of crude oil, will halve Petrom’s refining business in one abrupt move. The news, which took many investors by surprise, comes at a time when Petrom’s shares have already been falling, following negative information on the market that has emerged over the past few months. The announcement that Arpechim had been forced to close also affected the share prices of the Ramnicu-Valcea-based chemical plant Oltchim, which dropped by 2.5% after falling by as much as 5% during the trading session – due to Arpechim being one of Oltchim’s prime suppliers of raw materials. The shares of Oil Terminal also dropped by 2%, as Petrom is one of the main clients of the harbour operator.