Petrom, the largest Romanian company, will completely withdrawfrom the chemical products market by the end of 2010, with thepetroleum and gas producer being in the process of completing thetransaction to sell the petrochemical operations of Arpechimrefinery to state-held plant Oltchim.
The chemical and petrochemical segments do not account for morethan 10% of Petrom's annual turnover, which amounted to 4.5 billioneuros last year. At the end of 2011, Arpechim's fate will also bedecided, with the refinery to operate only as necessary.
"In our effort to increase the worth of Petrom's integratedoperations, we decided to drop secondary operations," says MarianaGheorghe, Petrom's CEO. The company says neither chemical norpetrochemical products are part of Petrom's core activity, and thatthe profitability of these operations is very low under the currentmarket conditions.
Petrom reported a 1.53 billion-RON net profit in the first ninemonths of this year, 33% less than in the same period of last year,and a 9.45 billion-RON turnover.
The company, which is the largest producer of petroleum and gas onthe Romanian market, has also announced a radical change in itsrefining strategy over the next five years, going from expansionplans to strategies of cutting the capacity of Petrobrazi, thecompany's biggest refinery.
The intention of OMV, Petrom's majority shareholder, to make therefining segment secondary as far as investment priorities areconcerned, has been announced recently, with the Austrians sayingthat exploration and production will be of primaryimportance.
OMV representatives said at the time that Europe now had an excessrefining capacity, which would inevitably lead to several Europeanrefineries closing down. Although after the 2004 privatisation theAustrians' plan was to boost the Petrobrazi refining capacity to 6million tonnes a year from 4.5 million tonnes, the crisis promptedthem to change their strategies, with Petrobrazi expected to have a4.2 million-tonne capacity in 2014.
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