However, revenue growth was not fueled by a higher production, but by the rising prices of extracted gas. Prices rose by over 23% in the analyzed period.
In the context where it sells internal gas with an 140% “commercial add-on”, Romgaz boasts the biggest profit margin in the industry, of almost 26%, topping Petrom’s and at a significant distance from regional hydrocarbon producers or the world’s leading oil producers Exxon or Shell.
Though Romanian authorities are always speaking of “potential” when mentioning the name of Romgaz, the company has not got directly involved in significant growth areas such as the Black Sea, has not developed external activities to be able to grow on the production side and its storage capacity has remained unchanged.
In 2013, the company’s net profit hit EUR225.3 million, up almost 67% against 2009. While for 2009-2013 the figures are calculated in line with international accounting standards, for 2009 indicators are set in line with Romanian standards.
Thus, in 2013 Romgaz reached a 25.6% profit margin, one of the largest in the Romanian economy, and above the almost 20% margin reported by Petrom, its direct rival.
During the crisis years, the company’s gas output dropped by around 2.4%, while deliveries from internal production slumped by 9.5%. Thus, the company extracted 5.6 billion cubic meters, but says one of its major accomplishments during this period was to reduce production decline.
While the company’s output slid and so did Romania’s gas consumption, prices for internal production rose. According to Romgaz data, 1,000 cubic meters from internal production were sold in 2013 at a price of EUR124, up 23.3% against 2009. Meanwhile, production costs have remained relatively flat.
To extract 1,000 cubic meters, Romgaz spends EUR51.7. Virtually, according to 2013 data, Romgaz sells internal production gas with a “commercial add-on” of almost 140%.
On the storage segment, Romgaz also saw a significant revenue increase during the analyzed period, to EUR136 million last year, from EUR66 million in 2010. According to Romgaz officials, the trend is due to the rising storage tariffs.
This year, the company’s management resumed plans to boost the storage capacity, announcing investments of RON100 million to add 100 million cubic meters to warehouses.
In terms of natural gas output, the company has budgeted investments of above RON1.1 billion, up 30% from last year. For 2014, the company has earmarked around RON650 million to discover new deposits, up 50% on the year. The level of latter investments is set to rise to over RON800 million in 2015 and RON1.1 billion in 2016.
This year, Romgaz announced its intention to sell 50% of the stake it held in two oil exploration perimeters of Poland, with this as the only bid of the company to go abroad.
As regards the Black Sea, Romgaz does not own any perimeter, owning minority stakes in two projects held by Petrom and ExxonMobil, and Lukoil.
Romgaz also announced it’s interested in new concessions as the National Mineral Resources Agency organizes new auctions.
In the five years of crisis, Romgaz’ headcount has remained relatively flat, at around 5,700 employees, but the average salary at the company rose by over 17%, to almost EUR920.
(English version by Catalina Apostoiu)