Spotlight: Romanian business chief sees EU entry outdoing 1989

Publish date: 10-02-2007
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BUCHAREST: Mariana Gheorghe remembers clearly how she felt during Christmas Week 1989 when she got the news that Nicolae Ceausescu, the dictator who had ruled Romania for more than 40 years, had been deposed.

"It was an exhilarating time," she said with a relaxed smile. "I was crying in the streets because of the changes to come."

Gheorghe, 50, is getting used to being a witness to revolution. In June, the former banker and energy expert became chief executive of Petrom, the former Romanian state oil company and the biggest private employer in the country.

She is one of the few women in Eastern Europe to hold a top executive position, responsible for managing access to one of the world's hottest commodities in one of Europe's hottest economies. Romania's gross domestic product grew 7.2 percent in 2006, compared to a projected 2.8 percent average for the 25 countries in the European Union last year. The country has an estimated 1 billion barrels of oil equivalents of gas and oil, the fourth biggest in Europe after Norway, Britain and Denmark.

Today, Gheorghe stands at the threshold of another major change: Romania's entry to the EU, which took place on Jan. 1. A firm supporter of EU membership because of the economic benefit it will bring to Romania, Gheorghe is also a realist — an attitude born of 17 years of intimate familiarity with the painful transition to a free-market multiparty system.

"The pace of change will be faster" with EU membership, she said during a recent interview in her barely broken-in office in Petrom's new building on one of Bucharest's wide boulevards. "But I don't think it will be all honey and butter."

Gheorghe stressed that it was difficult for Westerners to gauge the progress and fundamental changes Romania has already made since Westerners have always lived according to the values and rule of law found in modern European democracies.

"For Romanians, young and old, they have to learn it, understand it, absorb it and implement it," she said. "That is a big challenge."

Her personal challenge is trying to expand oil sales and exploration internationally while modernizing a 150- year-old behemoth.

Petrom is the largest oil and gas producer in southeastern Europe, processing around 6.4 million tons of oil a year. While oil and gas reserves allow Romania relative energy self-sufficiency — Romania imported 30 percent of its energy in 2004, compared to an average of 50 percent for the EU-27 — it still depends on Russia for all of its imported gas, and 62 percent of its imported oil.

Gheorghe is focusing on expanding Petrom's sales in southeastern Europe and exploration operations in Russia and the Caspian area. The company has 573 gasoline stations in Romania, and another 118 in neighboring Hungary, Bulgaria, Serbia and Moldova. Revenue in 2005 was €2.97 billion, or $3.86 billion.

"Our aim is to recognize the benefit of Romania having reserves and to have more moderate prices than the international ones," she said.

Gheorghe grew up in the coal mining region of Transylvania. She went to Bucharest to study international trade and law and worked in a Romanian chemical company during the Communist era.

The concept of "business" was hardly a word one could use to describe work in Communist-era state enterprises, she said. "We were not allowed to talk about risk," she said. "Everything was planned top-down. 'Change' was not a word you could use."

She worked at the Romanian Ministry of Finance for two years before leaving in 1993 to work at the European Bank for Reconstruction and Development in London. She stayed there 13 years and studied corporate finance during that period at the London Business School.

Until a year ago, there was no woman at the top of a large-size Romanian company. Women's positions in business focused on "so-called soft issues," she said, like human resources.

But she has found that women have interpersonal skills needed for team building, which she finds helpful at Petrom, both in implementing tough institutional changes and in juggling its complex ownership structure. The company, which was privatized in 2004, is 51 percent owned by OMV, an Austrian resources company. The Romanian government still owns 41 percent, while 6 percent is in the hands of private shareholders and 2 percent is owned by the EBRD.

Privatization has also meant tough decisions about jobs. Petrom's work force has been cut from 50,000 employees in 2004 to 36,011 as of September. A further 14,000 employees are scheduled to be laid off, according to the privatization contract, although no target date has been set.

Gheorghe sees her role as building a team at Petrom, although a smaller one. "For a corporation to grow, you need team work rather than individual work," she said. "I strongly believe that women can bring that sort of dimension to a management style."

Colleagues back that up. "She always had a smile but she could always give both good news and bad news," said Chikako Kuno, who worked with Gheorghe at the EBRD. "She wasn't afraid to deliver difficult messages, and that's something that won her a lot of respect."

While no one in Romania, including Gheorghe, expects things to go smoothly, joining the European Union creates confidence and more realistic expectations than the last revolution in 1989.

"This moment is more profound," she said, adding, "I have returned to live this moment."

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