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EBRD First Vice President, Phil Bennett, said that EBRD invested about 700 million euro into Petrom over the years, and hailed the Petrom’s privatization as a resounding success, as the company spends now more than 1 billion euro annually.
”Over the years, the EBRD mobilised more than EUR 700 million for Petrom, supporting its investments not only in Romania, but also in Kazakhstan, where last September the Bank signed its first upstream oil project in the country by providing a USD 200 million syndicated loan to Petrom’s subsidiary Kom Munai”, says Bennett.
It is a showcase for how the privatization process, if properly handled, creates value beyond the company itself, with benefits for the wider community and the country by creating jobs, tax income, and future opportunities for the next generation, says Bennett.
“Privatization has transformed Petrom from a big company with interesting potential into the largest oil and gas group in South-Eastern Europe, with results which make its mother company, Austria’s OMV Group, rather proud. The EBRD is delighted that we had the opportunity to contribute to Petrom’s success”, he said.
”Petrom is the largest private employer in Romania, indirectly employing more than twice the number of direct employees and it represents about 11 per cent-equivalent of non-consolidated state budget income per annum. At the same time, Petrom is the largest investor in the country (with over EURO 1bn capex spent yearly since privatisation).”
Romania has 600 million barrels in reserves
”The 2008/09 economic crisis has hit many of our countries hard and illustrated how long, difficult and sometimes also unpredictable the road towards advanced and established economies can be. Romania stands out in recent years as a country which has confronted difficult challenges head-on and is now reaping the rewards: our latest growth forecast from September for Romania is 2.6 per cent in 2014, which is not only higher than the average for South-Eastern Europe (1.9 per cent) but also Central Europe (2.5 per cent)”, Bennett added.
Due to its geographic location which combines being a member of the European Union with access to the Black Sea, Romania holds a critical position in one of our continent’s most pressing questions: the future supply of energy.
While there is a lot of strategic thinking going on at the moment about pipelines, Romania is a supplier in its own right: the country has the fourth largest crude oil reserves in Europe with 600 million barrels of proved reserves and the third largest natural gas reserves.
”As recently as in July, Petrom announced a significant discovery of oil in the Black Sea offshore Romania, while the exploration of the deepwater block Neptun with an estimated 1.5 trillion to 3 trillion cubic feet of gas is progressing.”
Investments into energy efficiency
”Here the EBRD experience comes in handy: In recent years we have financed several wind parks together with a variety of local and international investors in the country to support Romania’s energy supply and its efforts to meet the European Union’s climate change targets.”
Sustainable energy is one of the EBRD’s core competencies.
”We have developed a private sector approach to climate change and energy efficiency investments under tailor-made Sustainable Energy Financing Facilities. This is a framework that allows us to structure credit lines to local banks along with an incentive structure and energy audits so that local banks can on-lend for energy efficiency and renewable energy loans. We have used this approach with 80 banks in 19 countries, including Romania, and they in turn have financed over 55,000 loans for industrial, commercial and residential energy efficiency projects.”
Since 2009 the EBRD has radically increased its annual new overall investments from a level of about EUR 5 billion per year to EUR 8-9 billion.
”We stood by clients and countries when the supply of credit dramatically decreased and the threat of investors’ withdrawal on a large scale was real. And we are also standing by our countries through deepened policy engagements”, he concluded.
