Petrom

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Petrom SA

Type	Public (BVB: SNP)
Founded	1991
Headquarters	Bucharest, Romania
Key people	Mariana Gheorghe, CEO
Industry	Petroleum
Products	Petroleum products, Petrochemicals, Microelectronics chemicals
Revenue	€3.846 billion (2006)
Employees	32,837 (2006)
Parent	OMV
Website	http://www.petrom.com

Petrom is a Romanian oil company, the largest corporation in Romania and the largest gas and oil producer in Eastern Europe.

In late 2004, Petrom was privatized by the Romanian state and sold to Austrian oil company OMV. As of 2005, it was the largest privatization deal in Romania's history. OMV controls 51% of Petrom's shares. The other shareholders are the Romanian state (40.74%), EBRD (2.03%), and others (6.23%).

Apart from its operations in Romania, the company operates in Bulgaria, Serbia, Hungary, Moldova, Kazakhstan and Iran. In Moldova it operates 73 filling stations, being one of the leading oil companies, alongside Lukoil. In Hungary there are 2 Petrom filling stations.

In January 2006, Petrom purchased OMV's operations in Romania, Bulgaria and Serbia and Montenegro.[1] As a result of the transaction, 178 OMV stations operating at the highest standards belong now to Petrom and will continue to operate under the OMV brand. With significant investments of €500 million until 2010 in the Marketing business alone, Petrom will consolidate its leading market position in SEE.

Petrom Gas Station in Iasi - Romania

See also: Rompetrol

[edit] Privatization controversy

The Petrom privatization was realized during the last months of the Adrian Nastase government.

Major Romanian newspapers published articles criticising the privatization of Petrom, on the grounds that last-minute unadvertised moves gave Petrom all of Romania's oil and gas reserves just before the privatization contract was signed.

As a consequence, OMV/Petrom has a de facto monopoly on the oil production of Romania. Moreover, the state did not impose price controlling clauses in the privatization contract, so that Romanian-produced petroleum is sold in Romania at the same price as imprted petroleum.

Internal company manoeuvres allow the price increase. As reported in Evenimentul zilei (translated):

At Petrom, 159 litres of gas cost 197 dollars. The price is 15 times bigger than the extraction costs from Romanian reserves. Freshly extracted, one oil baril is worth 12 dollars, but the price increases to 46 dollars as it reaches the gates of the refinery.

The OMV-Petrom case must be clarified. A simple computation shows that simply "selling" the oil between the Exploration-Extraction Division and the Refining Division brings OMV/Petrom a profit of some 32 dollars per oil baril.