OMV Gets Back the Money from Petrom

OMV has already recovered 34% of the sum paid to the Romanian state for the purchase of Petrom by a simple operation: the Romanian company bought the Austrians’ gas stations in Romania, Bulgaria, Serbia and Montenegro. The operation, presented as a strategy of the Petrom privatization outside Romania, has one bad part as well: the newly purchased gas stations will still be under the OMV brand.

Petrom has to pay 234.4 million euros to the owner company, OMV, for the 178 gas stations that it has sold to the Romanian company. The gas stations are in Romania, Bulgaria, Serbia and Montenegro. The transactions’ value is the same with the one of the KPMG evaluation, according to the Petrom public statement. The sum represents 15.6 % of the 1.5 billion euros that the Austrian group gave to have 51% of the Petrom shares. However, the situation changes if we take into account the actual sums cashed by the Romanian state. OMV paid 699 million euros for 33% of the Petrom shares. The rest to 1.5 billion euros is the sum brought by OMV to the joint stock in order to hold 51% of the shares and take over the control of the company. The sum paid by Petrom for the purchase of the OMV gas stations represents approximately a third of the money cashed by the Romanians after the privatization of the greatest Romanian oil company. According to the deputy manager of OMV, Werner Schinhan, the financing of the transaction will be made out of the 830 million euros offered by OMV for the increase in the Petrom joint stock, as well as from the private funds of the company.

THE RECOVERY

The net profit of Petrom in 2005 could reach 500 million euros, according to an estimation seen as realistic by Gheorghe Constantinescu, the general manager of Petrom, quoted by Medifax at the end of last year. If 50% of this profit goes to equities, OMV cashes another 125 million euros. This means the recovery rate for this year will get to 50%. The analysts said that the proportion of the equities in the profit could get higher as well as smaller. It all depends on the OMV strategy. On the other hand, OMV gets money from Petrom from its contracts with the other companies of the Austrian group. At the end of last year’s November, Werner Schinhan said that, according to the Petrom privatization contract, the value of the agreements with companies that take part in the OMV Group can get to maximum 25 million euros each year. This is added to the commercial margin for crude oil imports, which gets to 50 million euros, which are also intermediated by a company affiliated to OMV.

THE PROFIT AND THE SE

"The profit rate of Petrom is almost double than the average in the worldwide oil industry, which doesn’t go over 10%", Razvan Pasol, president of Intercapital Invest brokerage company, stated for us. In the first nine months of last year, Petrom obtained a net profit of 389 million euros from a turnover of 2.17 billion euros, which means a profit rate of 17.9%. There is no wonder that, last year, OMV was the main winner of the FTSEurofirst 300 coefficient at the London SE, with an increase of 123.3%. In their turn, the Petrom shares have increased by 8% between the 16th and the 23rd of January, reaching 6,250 ROL.

GLORY AND PLOD

OMV says it wants to turn Petrom into a regional power in the field, but it has to be branded as OMV. "OMV is a popular and well-positioned brand. It is synonymous with the idea of quality and comfort", Gerhard Roiss, the deputy president of OMV, explains. Roiss stopped explaining when he should have said the reason for which Petrom cannot be the brand synonymous to the values invoked in the region. These are the terms of the situations, which is characterized by Ruttenstorfer, the OMV president, as a "winning-wining one for the mother-company and for its subsidiary".

THE FORCE OF THE RESOURCES

In the first nine months of last year, Petrom produced 3.973 million tons of crude oil (including gasoline) and 4.63 billion cubic meters of natural gas. "The amount of the sales decreased by 6% for crude oil and by 12% for gasoline, while the sales for natural gas increased by approximately 3% because of the sales from the silos which reached approximately 385 million cubic meters", the company report says. Through Petrom, OMV is one of the two owners of the Romanian natural gas, together with Romgaz. Each of them holds approximately 48% of the Romanian production. Therefore, Petrom responded to the Ministry of Economy and Commerce that requested them to supplement the production by pumping 6.4 million cubic meters per day, which includes the closing of the Doljchim plant, says a public statement of the company. The Romanian state cashes 3.5 to 13.5% of the market value of the products extracted by Petrom in the form of royalty fees.

Translation by Sorin Balan