SNP Petrom, the largest company on the Romanian market, has managed to make the most of the decline in the oil product supply on the European market and therefore boost exports in the first five months by 63%. It also stopped importing crude oil over the last two months.
“SNP Petrom exported some 258 million euros’ worth in oil products to the European Union countries, which is 100 million euros more than last year. At the same time, Petrom has not imported oil over the last two months,” Florin Ciocanelea, Petrom International general manager told Ziarul Financiar.
This time of growth for Petrom’s exports to the euro region was also a time when, fortunately, the single European currency appreciated, given that the dollar had been stronger than the euro last year.
How did Petrom achieve this?
The favourable situation for its exports was created by the decline in the supply on the largest markets of the world, the EU and the U.S., due to the Gulf War, as well as to the fact that Venezuela put a damper on exports for a four to six weeks during this period, while Nigeria’s output went down because of inner turmoil.
This situation forced the U.S. to choose an oil supplier other than Venezuela, one of the leading oil exporters of the world and the American market’s traditional oil source.
Petrom’s oil product exports amounted to approximately 640 million euros, twice the 2001 level, according to the estimates of the former Petrom general manager Ion Popa.
On the other hand, the domestic oil market leader cut its oil imports down. “There were a number of factors that led to this result. On the one hand, there was no longer demand from other refineries and we must not forget the Gulf War period and those speculations about a barrel of oil reaching $50. At the same time, Petrom’s Arpechim Pitesti Refinery was closed for maintenance for about one month and reopened three days ago. The only operational refinery during that period was Petrobrazi,” company management sources explained. They added Petrom would also perform maintenance works on Petrobrazi in September and October.
SNP Petrom holds two of the ten refineries in Romania, Arpechim Pitesti and Petrobrazi Ploiesti. The current refining capacity of the two entities is 8 million tonnes a year, accounting for 36% of the total domestic refining capacity, Petrom officials say.
Petrom’s refineries processed 6.5 million tonnes of oil in 2002, some 55% of the total amount of oil processed in Romania, given that Petrom imports some 2.4 million tonnes of oil a year.
Petrom’s privatisation is ongoing, with the date for signing the contract with the selected investor set for December 31, 2003, according to the privatisation agenda. The consortium hired to audit the company and assist the State all through this deal is comprised of Credit Suisse First Boston and ING Barings investment banks.