Crude / Refining / Petrochemicals Sector in Romania (Update – March 2009)
Adresa
Bulevardul Nicolae Titulescu, Nr. 4-8
Cladirea America House Aripa de Vest, Etaj 4
Bucureşti, Sector 1
Telefon
+40-21-206.23.00
Fax
+40-21-206.23.10
Website
www.efgfinance.ro
- Romania is a mature oil processing country, with multiple refining facilities and intensive transportation infrastructure. Of the total number of 10 refineries, 5 are owned by three players which succeeded to improve operations (Petrom-OMV, Rompetrol Rafinare and Petrotel-Lukoil), while all others are in a poor financial situation or even in liquidation.
- The retail distribution is still in a consolidation stage, with retail units of refineries and of foreign distributors with no production facilities in Romania increasing weight, and small private filling stations losing ground.
- The sector also includes services providers (an oil terminal company and an oil products pipes transportation company, both public entities majority owned by the state).
- The major changes in the sector were Petrom’s privatization with OMV at the end of 2004 (that resulted in a price increase of the oil refined and petrochemical products in 2005, to a level close to the CEE one) and the acquisition of Rompetrol Rafinare by KazMunaiGaz in 2007.
- Requirement for Romania to comply with EURO5 standards starting with January 1, 2009 (2 years later than the EU countries) has forced the players to accelerate investments in technology; EURO4 standards in Romania have been enforced on January 1, 2007, when Romania joined EU.
Industry structure
Crude production and imports
Total crude supply absorbed by Romania’s refining system recorded an upward trend during 2004-2005 (+17.5% and +8.8% y/y respectively) and was downward over 2006-2008 most likely due to milder winters (-3.2%, -0.7% and -3.2% y/y respectively).
Imported crude quantities recorded the same pattern – significant growth during 2004-2005 (+40.2% and +18.8% y/y respectively), and slight decrease over 2006-2008 (when imports decreased 0.1%, 1.7% and 1.3% y/y respectively).
The weight of imports has increased over the past years, reaching to 65.0% in 2008 (from 48.0% in 2003). The balance is domestically produced.
Romania’s crude reserves stands at some 70 mn tons and we computed around 760 mn boe reserves of natural gas at Dec 2007 (based on Petrom reporting and considering gas reserves equally split between Petrom and Romgaz – country’s key producers), with a life of around 15 and 10 years respectively.
Important to mention that Petrom’s reserves replacement rate stood at 71% in 2008 (from 38% at Dec 2007 and 13% in 2006) due to significant investments, meeting the management’s target of 70% two years earlier.
The domestic crude mostly represents sweet heavy crude, Petrom being the major Romanian producer.
Refining facilities
Romania has a total refining capacity of 23.5 MMT, in 10 facilities, the most important being Arpechim and Petrobrazi (Petrom OMV’s plants), Petromidia (owned by Rompetrol) and Petrotel-Lukoil. Except Rompetrol Vega (re-oriented to produce solvents), all other ones are in a poor financial situation, with unclear shareholding structure or in liquidation.
In 2008 Romania’s refineries processed some 13 MMT of crude, resulting an utilisation rate of Romania’s total nameplate capacity of around 50%.
Petrom processes both imported and domestic crude, and Rompetrol and Lukoil – only imported crude.
Oil-refined products delivery
Over the first 11 months of 2008, the domestic market absorbed a total of 9.05 mn tons of oil refined products (vs 9.08 mn tons over the full-year 2007), so consumption recorded an increase in 2008 vs a year before.
Of these, 13.1 mn tons were produced in Romania, 1.5 mn tons were imported and 4.7 mn tons were exported. The balance represents own consumption and stock variances.
