Petrom prepares to invest over €1 bln in 2010Publish date: 30-11-2009
Petrom, Romania's largest company in terms of net sales, part of the Austrian OMV oil and gas group, will invest over €1 billion in 2010, similar to the level scheduled for this year.
According to Wolfgang Ruttenstorfer, Chief Executive Officer of OMV, more than half of this amount will be directed towards the exploration and production division. Petrom has invested nearly RON 17 bln (€4.67 bln) since OMV took over the company in 2004, until the end of September 2009, but results have not yet met the expectations of the Austrian owner included in the development strategy for 2005-2010. OMV's CEO said that Petrom is revising its strategy, and the largest target shifts will be on the refining segment.
"Margins on the refining segment declined significantly in the recent period. We are, of course, revising our strategy on this segment, as margins and demand are down, and because Petrom must allocate as much money as possible for exploration and production," said Ruttenstorfer. The initial strategy, which set the targets that had to be met by 2010, had a budget of over €3 bln, and the main goal was to transform Petrom into the largest integrated oil and gas company in Southeastern Europe, with a production of 210,000 barrels of oil equivalent (BOE) per day, a reserve replacement rate of 70 percent, using refineries at 95 percent of their capacity, and a market share of over 35 percent on the natural gas segment.
Ruttenstorfer added that OMV maintains the objective of producing 350,000 BOE daily in 2010, although this is a difficult target to meet, considering the decline in the Romanian gas market. Local natural gas consumption fell over one quarter year-to-date. "It will take between three and five years until oil and gas demand will amount to the level prior to the crisis," said Ruttenstorfer, who indicated that gas demand will resume growth, especially due to the construction of new thermo-energy plants. The official added that any additional increase in the 350,000 BOE per day production target will require acquisitions.
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