As part of its development strategy, Petrom, Romania's largest oil and gas group, has revealed that it is considering diversifying its activities in the power sector as it becomes a hub for parent company OMV in southeastern Europe. The company is also looking to extend its fuel retail network by increasing the number of its flagship filling stations and ramping up its product offerings.
The revelation came as Petrom’s board of directors reconfirmed the company’s development strategy for 2010. The overall strategic goal remains as approved in 2005, namely to become the leading integrated oil and gas company in southeastern Europe. In line with this, Petrom will continue its international development, thus positioning itself as an OMV hub for the region.
In exploration & production (E&P), significant investments, together with a comprehensive transformation program, are expected to lead to production stabilization in Romania at 210,000boe/d, the increase of international production to 70,000boe/day, the reduction of production costs to $9/boe, and a reserve replacement ratio of 70%. Petrom aims to pursue further growth of E&P activities in the Caspian area and in Russia, the core areas for the development of the company’s upstream operations outside Romania.
In refining, the strategy is based on a reconfiguration of refineries, which will benefit from large investment programs in order to improve efficiency and comply with EU product standards. Petrom will invest E1 billion in Petrobrazi until 2011 and the capacity will be expanded from 4.5 million tons/year to 6 million tons/year. The refinery will target 94% capacity utilization, while the diesel output should increase threefold to 2.1 million tons in line with market demand.
In order to remain the market leader in Romania, where it aims reaching 35% market share, Petrom will further increase the number of its flagship PetromV filling stations, and provide enhanced services and products. The company is also expanding its retail network in southeastern Europe and the Black Sea region.
Petrom’s gas business will further develop in time with the expected liberalization of the market, the company said. Petrom intends to capitalize on the gas and power convergence, as well as the benefits of clean energy, and thus is considering a future diversification of its activities in the power sector.
In light of the future EU accession of Romania, Petrom’s strategy also includes specific actions allowing the company to comply with the requirements regarding biofuels and carbon management.