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Petrofac dropped the contract with OMV Petrom

27 February 2015
Exploration & production

Oil services company Petrofac waived the contract with OMV Petrom concluded in 2010, which aimed to exploit the deposits in the Ţicleni area, Gorj county, although in December 2014 it had increased its share capital of the subsidiary in Romania with $ 3 million. In total, last year the British company has injected $ 10 million to support local operations.

“In 2014, we worked on the revision of the development plan and the framework contract for the perimeters of Ţicleni. However, after a review of the project at the beginning of 2015, we decided to abandon the contract,” says Petrofac in the financial report for the past year, quoted by Mediafax.

The company has built provisions to cover the full amount of the contract with OMV Petrom and provided also in the budget the costs of exiting the partnership with OMV, writes the mentioned agency. Assets held in Romania by Petrofac are worth 139 million euros.

In 2010, OMV Petrom has concluded a 15 year partnership, through which Petrofac is the operator for the management of operations for nine deposits in the Ţicleni area, the contract targeting the total production increase by at least 50% in the first five years of implementation. Being in operation for over 60 years, the deposits from Ticleni at the time of signing the contract, were producing 4,500 boe per day, about 2.5% of all Petrom production, which it was performing at that time in Romania.

Mariana Gheorghe, CEO Petrom, said then: “In order to reach our potential on the exploration and production segment, given the complexity of the operation of the mature fields as well as our portfolio in Romania, we will focus on the re-development of an estimated six-eight major fields by 2015.

In parallel, to maximize the production in other mature fields, we decided to initiate partnerships with reputable international companies that have achieved remarkable results. The partnership with Petrofac, a leading international provider of services in the oil industry is an example in this case. Through this partnership, we focus on getting the best results in terms of risk sharing, reducing costs and increasing production.”

The contract provided that Petrofac ensures the necessary expertise and technologies, as well as the financial and human resources. On the other hand, Petrom had to oversee operations and to pay for the amount of oil produced, including an increased price according to the additional production.

The company has 1,000 employees in Romania. Petrofac’s net profit fell in 2014 to $581 millions from $650 millions in 2013, while revenue fell to $6.2 billion from $ 6.3 billion.

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