“I’ve seen big changes in the oil and gas industry lately with a significant impact on all actors; whereas a little while ago we were talking about how to grow the business, now we are talking about how to keep it profitable,” said Seele, accompanied to the news conference by Johannes Vetter, the spokesman of the Austrian group. No OMV Petrom SA officials were at the conference, though.
Petrom is the second largest company in Romania after Renault-owned Automobile Dacia and the only local oil and natural gas producer. The company last year posted its first losses after its privatization in 2004, 690 million lei (EUR154 million). Revenue was down, too, by 16% to RON18.1 billion, due to the drop in fuel price caused by the oil price slump that hit all oil companies in Europe.
To keep the business profitable, OMV needs to focus on what it knows how to do best and that is the integrated part of the business. OMV will continue to invest in production in the next five years to keep the capacity that currently stands at about 300,000 barrels per day. Romania and Austria generate two thirds of that so a lot of investment will go towards Romania, Seele added.
Rainer Seele, who replaced Gerhard Roiss in the summer of 2015, is known as a supporter of stronger economic and political ties with Russia and a friend of the Gazprom boss, Alexander Medvedev.
The OMV CEO explained he came to Romania for the people to see the new management of the group. Asked whether he had met with Prime Minister Dacian Ciolos, he did not give a clear answer, saying only that he had meetings with a lot of people, but would not comment on whom he met with. Seele had previously come to Bucharest in November 2015, when he met with President Klaus Iohannis but there was no media event. The two discussed the future energy taxation system and the natural resources and the exploration in the Black Sea.
The OMV official said there could be no significant drilling in the Neptun block in the Black Sea any sooner than 2019, as the group had not completed assessment of the reserves there with its partner, Exxon, and needed time to decide on the type of investment there. OMW wants most of its share of the production there to stay in Romania, he added.
To OMV, which expanded in full gear in the region after 2000, Petrom is the main asset, while in Turkey it put up for sale Petrol Ofisi.
“Romania is an attractive market to OMV, there is no intention to sell assets in Romania,” he said, adding the power plant in Brazi was part of an integrated business and as such the group was not considering selling it.
Seele also said the group needs a stable governmental and legislative framework to be able to continue investment in drilling. The group’s investment plans were made for 20 to 25 years but as a major investor OMV needs this stable framework. (EUR1=RON4.4794)
(English version by Loredana Fratila-Cristescu)