Oil & gas industry in Romania
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
Oil industry overview
AT A GLANCE: CRUDE-RICH COUNTRY, STILL NET IMPORTER
- Romania is the CE Europe’s most oil-rich country, still a net importer with supplies coming mainly from Kazakhstan and Russia
- Requirement for Romania to comply with EURO 5 standards starting with January 1st, 2009 (2 years later than the EU countries) forced players to accelerate investments in technology
- 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 to a level close to the CEE one) and the acquisition of Rompetrol Rafinare by KazMunaiGaz in 2007.
- OMV Petrom is the major domestic crude oil producer; exploration facilities are located in Romania and Kazakhstan; it is also one of the country’s two leading natgas producers. In 2010, OMV Petrom reported crude and natgas proved reserves (1P) of 805 mn boe and proved and probable (2P) reserves at 1,120 mn boe. Petrom also reported that its reserves replacement rate reached 72% in 2010, significantly improved compared to 34% reported for 2006.
INDUSTRY STRUCTURE
Crude Production and Imports – 40%/60%
Total crude supply absorbed by Romania’s refining system increased during 2004-2005 and afterwards entered a regression phase on the back of economy restructuring, albeit positively accompanied by improved quality norms. The expected economy growth this year, if achieved, will definitely have a favourable impact on the sector by helping it enter a recovery process.
Crude imports topped a 65% weight in 2008, while in the first nine months of 2010 accounted for 59% of the crude supply, with crude production providing the 41% balance on country consumption.
Petrom oil&gas reserves: OMV Petrom reported that the level of total crude and natgas proved reserves (1P) it currently exploits stood at 805 mn boe in 2010. Petrom’s total proved and probable (2P) reserves amounted to 1,120 mn boe in 2010. There is no official information on Romania’s total crude and natgas reserves, neither regarding total level nor split on oil and gas; while Petrom is the major crude producer, in terms of gas production it enjoys quite equal market shares with Romgaz.
OMV Petrom is leading crude producer. Petrom represents Romania’s major crude oil producer with a 99% weight in 2009 (latest available data). Both in 2009 and 2010, the domestic crude production has entirely entered Romanian refineries for processing.
Crude Refining and Related Facilities - Crude refined by two refineries basically
According to our computation and based also on publicly available sector and company data, most of the domestically produced crude and imported quantities were refined by OMV Petrom (in Petrobrazi refinery) and Rompetrol Rafinare (Petromidia refinery).
These jointly accounted for approximately 77% of the crude refined in Romania over the first nine months of last year. In full year 2010, weights might have changed as Petromidia was halted for a planned general overhaul in Q4 2010.
Romania has in total 8 refining facilities, the most important being Petrobrazi and Arpechim (Petrom OMV’s plants, Arpechim presently shutdown to further be divested most likely next year), Petromidia (owned by Rompetrol) and Petrotel-Lukoil.
Except for Rompetrol Vega (re-oriented to produce solvents), all others are in a poor financial situation, with unclear shareholding structure or in liquidation. Petrom presently processes only domestic crude, while Rompetrol and Lukoil – imported crude.
Oil-Refined Products Delivery - Domestic production leads the market
In 2009 the domestic market absorbed a total of 8.5 mn tons of oil refined products. As much as 12.2 mn tons of refined products were produced in Romania, 1.6 mn tons were imported and 4.5 mn tons were exported. The balance represents own consumption and stock variances.
Petrochemical Facilities
Main petrochemical plants are Rompetrol Petrochemicals, Petrotel-Lukoil and the one located at Arpechim refinery and acquired in 2009 by the stateowned chemical producer Oltchim from OMV Petrom.
The petrochemical sub-sector is heavily affected by imports, low capacity utilisation and volatility of the domestic currency. Oltchim’s petrochemical plant (taken-over from Petrom) is the main domestic supplier of petrochemical products for the Romanian chemical industry. Rompetrol Petrochemicals is the sole polypropylene and polyethylene producer in Romania and starting with 2007 the company is subject to plans to become an important player in the regional polymers market.
