“I hope the market will be flat at least,” says Kinga Daradics, 33, chief executive officer and country chairman of MOL Romania.
Sales of fuel on the entire market went down by 2% in volume last year, but even so MOL still sold 7% more gas and diesel, according to its nine-month financial statement.
“A number of factors generated this. First it was the expansion of the number of gas stations. We opened eight new filling stations last year. Then we worked on promotions and diversified the business to business offer,” says the youngest CEO in the local oil industry.
If the sales growth pace maintained until the end of 2013, MOL Romania could join the so-called ‘euro billionaire club’, considering it ended 2012 with EUR930.8 million revenue, up 25% on 2011. Moreover, it posted EUR17 million net profit in 2012, after having ended 2011 with a more than EUR3 million loss due to a fine by the Competition Council.
Kinga Daradics did not provide any 2013 revenue and net profit figures.
“We want to continue our growth strategy in 2014 so as to reach a 15% market share by the end of 2015,” MOL Romania’s CEO said.
The company has already added three new gas stations to the 143 it ended 2013 with. Company officials did not say where the latest investment was made or how high its market share at the end of last year was. MOL ended 2012 with 12% market share.
“We want new gas stations this year, as well,” Kinga Daradics said without revealing the 2014 investment budget.
Why does MOL keep expanding on a market struggling with feeble growth rates and decline in the years after the Lehman Brothers collapse?
“We still believe Romania has tremendous potential. There are only 150 to 200 cars per 1,000 people now, while in Hungary the number of cars is 300, in Slovenia 500. Infrastructure, too, is a long-term development factor. Romania now has more than 600 kilometers of highway, while Poland has 2,000.”
Romania uses 5.7 million to 5.8 million tons of fuel (gas and diesel) sold via the retail and wholesale segments. Diesel accounts for about 75% of the total fuel consumption.
Retail fuel sales are done via more than 2,000 gas stations. OMV Petrom has the largest network, 542 stations, followed by Rompetrol, 405, Lukoil, 301 and MOL, 146. Two other international giants entered the market last year, Gazprom and SOCAR.
Besides the fuel business, MOL is also involved in exploration and production in Romania.
MOL signed concession agreements for three exploration blocks with Romania’s national mineral resources agency (ANRM) in April 2011, awarded by auction in 2010. The three blocks are located in Voivozi (Bihor County), Adea (Arad County) and Curtici (Arad County), in the western and northwestern part of the country.
Only one of the three blocks has had the concession agreement approved by the Romanian government, which is needed before the company can start operations there. MOL said last year it had $38 million investment budget for the three blocks but a large part of it was left unspent.
ANRM announced last year it planned to auction another 36 oil blocks, 8 of which offshore (in the Black Sea). It did not say when exactly the auction would take place.
MOL Romania’s CEO says the company wants to conduct exploration in Romania if all the necessary conditions are provided.
The investors interested in exploration and production in this country, however, may be expecting to see the new royalties announced first, which should be changed this year.
(English version by Loredana Fratila-Cristescu)