Conpet starts trading at the first tier of the Bucharest Stock Exchange today, after having moved from RASDAQ. Conpet shares have gained 30% in the past month amid expectations of the move, driving its market capitalization to almost EUR90 million.
“One of the goals for the coming period is to find solutions to offset the decline in activity. Our priority is the Constanta-Pitesti-Pancevo pipeline. Interconnection with the regional pipeline transmission systems and with the European system later is the key,” says Liviu Ilasi, general manager of Conpet Ploiesti.
“Conpet can become a regional champion at least, if shareholders choose to go for major projects and this is a goal I think it’s worth fighting for.”
Such a project is the building of a pipeline to link Pitesti and Pancevo, where Russia’s Gazprom has a refinery. This is why the Russians are interested in joining forces with Conpet to build it.
He says another investment goal he proposed for the oil transmission system operator to be implemented later is a pipeline connecting Constanta to central Europe.
“Building an oil pipeline in Romania would be the shortest and better route to transport oil from the Black Sea to central Europe. Another advantage is that Constanta has the largest terminal in the area and would also create the premises to unfreeze traffic in the Bosporus area.”
Such a project would require a really large investment but it would be a good one because the current transmission alternatives are rather old.
A pipeline connecting eastern and western Romania is also needed because of the larger amounts of oil that will arrive from Kazakhstan at the Black Sea in the coming years and the most effective way to transport them is precisely a pipeline, Conpet’s boss added.
Conpet’s general manager says one of the goals of his company is to boost profitability and offset decline in the transmission business by developing additional operations such as a system to store oil and oil products. Another way to boost profitability would be to cut costs.
One more solution that Conpet used to improve revenue was to transport the freshly drilled oil for Petrom to the processing centers.
However, Conpet officials say the oil transmission price is still less than 1% of the final gas pump price.
Conpet saw its net profit up 25.7% to 25.7 million (EUR5.78 million) in the first half, mainly because of cost savings. Revenue rose by 5.7% to RON171.8 million, although the volume of oil transmitted fell by 3.6%. The company does not have any debt to banks and had EUR54 million in its accounts on June 30.
Conpet along with Oil Terminal is trying to become the main depository of the oil and oil product reserves Romania has to set up as a result of European regulations.
The company replaced 368 kilometers of pipeline out of the 3,800 kilometers it operates in 2003-2012.
It concluded an extensive upgrade process worth EUR150 million and partly funded by the World Bank in 2010, which improved its efficiency and helped cut maintenance costs. The latter are expected to decline at a rate of 5% to 10% a year, without jeopardizing the running of the system.
One of the most important investment projects that Conpet has is a pipeline leak detection system, Liviu Ilasi said. (EUR1=RON4.4461)
(English version by Loredana Fratila-Cristescu)