Strategy pushes up Petrom revenues

The recent upward revision of Petrom’s 2004 budget forecasts is the result of the strategy applied since last year.

In line with the new targets, Petrom is aiming for total revenues of 94,610 billion ROL (2.3 billion euros), up 10.5% in nominal terms and 24.6% higher than last year.

“The revision of the company’s 2004 results is based on a cut in production costs, on stable oil output and a slight increase in natural gas production. The projected growth is also due to the recovery of part of our receivables and an increase in exports, triggered by the favourable international conditions,” Petrom general manager Gheorghe Constantinescu told Ziarul Financiar.

Another factor that is set to boost Petrom’s sales is the recent hike in gasoline prices, the steepest in the last fifteen years.

As to the projected increase in oil output, the company’s general manager says Petrom will receive assistance from Austrian group OMV, which will hold 51% in the Romanian oil company in Q4, 2004. The value of the transaction is in the region of 1.4-1.5 billion euros.

OMV decided on a takeover of Petrom mainly due to the latter’s drilling and production portfolio, which includes crude reserves estimated at one billion barrels.

OMV confirmed Gheorghe Constantinescu as the new general manager of SNP Petrom when they signed the privatisation contract in July.

After replacing Ion Popa, who was in charge from 1997 until February 2003, Constantinescu began preparing the operator for privatisation, announcing a strategy based on “financial cleansing”, internal cost cuts and a focus on exports.

These measures were mainly applied in order to push up the company’s value before sale, so that the Romanian State could get a good price for Petrom.

The company estimates this year’s turnover will reach 87,147 billion ROL (2.12 billion euros), more than 6,700 billion ROL higher than last year. The target accounts for a 22% increase in turnover compared to 2003.

Gross profit is set to reach 4,293 billion ROL, up 25% on last year’s figure of 3,198 billion ROL.

adrian.mirsanu@zf.ro