Petromservice targets half a billion euros

Petromservice, the biggest domestic provider of services and equipment for the oil and gas industry, targets double turnover for the next 3-5 years.

The company is still largely dependent on Petrom, a company it split from four years ago. Petromservice shares are 49.3% held by Elbahold Limited, 25% by Petrom Employees” Association (PAS) led by Liviu Luca, with the rest of stock belonging to a number of 8,577 natural persons.

Liviu Luca represents both the interests of PAS, and of the Petrom Federation of Free Independent Trade Unions, with participations in agriculture, banking and insurance, and the media.

“For 2005, we estimate turnover to have been approximately 10% higher compared with the previous year,” said Gheorghe Supeala, advisor to the Petromservice general manager.

“In 2004, the company posted net income worth 17.6 million euros and turnover amounting to 271.5 million euros.

“We plan to develop our current activities, particularly drilling and constructions, but we also intend to approach the foreign market by setting up subsidiaries in areas that are relevant for our business. These operations will boost our customer portfolio and implicitly our business,” Supeala also said.

For expansion, the company is interested in the Caspian Sea, the Middle East, as well as the Russian area.

At present, 80-85% of Petromservice revenues come from contracts carried with Petrom, the biggest Romanian company, which entered the portfolio of OMV Austrian oil group.

Recently, Petrom has extended its services contract with Petromservice over a seven-year period, with the minimum value of the contract standing at 1 billion euros.

In line with the new contract, Petrom is set to engage in a minimum work volume worth 180 million euros in 2006, 20 million euros below the level agreed upon for last year and 63 million euros less than in 2004.

“Petrom is currently undergoing massive restructuring, which will lead to the elimination of several activities that are not profitable for the company. In this context, the portfolio of activities carried through Petrom will also account for a smaller part of our turnover. Over the next five years, Petrom will come to account for 50% of our deals,” explained the Petromservice representative.

Petromservice shareholders intend to float the company on the stock exchange over the next years as it grows less dependent on Petrom, according to sources close to the company.

Petromservice

* The biggest domestic provider of services and equipment for the oil and gas industry

* Plans to double turnover over the next 3-5 years

* Estimates that turnover went up about 10% in 2005 from the previous year

* In 2004 derived net income worth 17.6m euros amid turnover standing at 271.5m euros

* 80-85% of Petromservice revenues currently come from contracts carried with Petrom