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ROMANIA – Celebrating 150 years in the oil business
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Romania was the first country in the world
with an oil production in excess of 275 tonnes,
officially registered in the international statistics
of 1857, followed by the United States
in 1859, Italy in 1860, Canada in 1862 and
Russia in 1863. Having the largest petroleum
reserves in Eastern Europe, Romania was
a major producer and exporter throughout
the twentieth century and it’s oil extraction
industry, developed primarily by German,
United States, British, and Dutch companies,
was the forerunner of the country‘s
belated industrialization. Peak production
was reached in 1976, gradually declining in
subsequent years, as many of the country‘s
200 oil fields began nearing depletion and
discovery of new reserves waned. Over the
past few decades, Romania‘s oil production
has fallen precipitously from 252 000 barrels
per day in 1980 to 122 700 barrels in 2007,
but today Romania also produces nearly 75
percent of its own domestic Natural Gas
requirements.
With a population of just over 22 Million,
Romania, which joined the European Union
on 1 January 2007, began the transition from
Communism in 1989, with a largely obsolete
industrial base and a pattern of output unsuited
to the country‘s needs. The country
emerged in 2000 from a punishing three-year
recession thanks to strong demand in EU
export markets. Domestic consumption and
investment have fueled strong GDP growth
in recent years. Inflation rose in 2007 for the
first time in eight years. Romania hopes to
adopt the euro by 2014. Major manufacturing
industries in Romania centre around
electric machinery and equipment, textiles
and footwear, light machinery and auto assembly,
mining, timber, construction materials,
metallurgy, chemicals, food processing and
of course petroleum refining. Unemployment
currently stands at 4.1 percent.
In the retail petroleum sector, three companies
dominate the Romanian market and utilise
their own refining and storage facilities. The
former state company Petrom, now owned by
OMV, has 553 company owned sites. Lukoil,
the Russian oil company giant has just over
300 sites and Rompetrol, which in recent
years has taken huge steps in developing it’s
retail networks in Romania, Bulgaria, Georgia,
Moldova and in France through Dyneff, has
296 company owned and dealer operated sites.
In Romania, petrol consumption is expected
to rise by as much as 7 percent in 2008 and
all three major retailers are carrying out major
investment programmes to modernize their
retail facilities and improve the services they
offer to their customers.
On a recent visit to Bucharest, Nick Needs
discovered that in some cases, petrol and
diesel is still bought by customers demonstrating
a brand preference. One taxi driver
claimed that he always bought a particular
brand of diesel because a few years earlier
one oil company had water in it’s fuel. At a
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restaurant in downtown Bucharest, a girl in
her 20’s declared that she and her friends
routinely use a particular oil company because
it’s unleaded petrol is far superior to that of
other brands. Could it be that they know
something we don’t?
To get a better general understanding of the
Romanian retail petroleum market, erpecnews
profiles two of the major three, Petrom and
Rompetrol. Nick Needs, reports.
Eric Kish
Vice President of Retail
at Rompetrol