Could you please explain how OMV Petrom’s operations fit into the larger structure of the Group, given that you are the largest private investor in Romania and the largest player in the energy market in the country?

OMV Petrom’s operations in Romania are integrated, ranging from crude oil and gas production, refining, power generation, to fuel, gas, and electricity sales. Our Petrobrazi refinery production can cover the annual consumption of about 3 million cars, and our gas production can cover around 40% of Romania’s consumption. Additionally, the Brazi plant can cover up to 10% of domestic electricity consumption. We are also the largest taxpayer in Romania, contributing approximately 2 billion euros to the state budget per year. With over 13,000 direct employees at the end of 2018, and an overall estimated impact on the labor market of over 50,000 jobs (through contractors and subcontractors), OMV Petrom is one of the most important players on Romania’s job market. The Downstream Gas Division in OMV Petrom ensures electricity production and gas & power sales, and thanks to our integrated business model, we are able to capture market opportunities along the entire value chain.

What are your current priorities for investments, given the broad scope of OMV Petrom’s operations in Romania?

We have been investing approximately 1 billion euros each year since mid-2000s, and we mostly reinvest most of our operational profit. Upstream activities are where most of our investment budget is focused, as most of our fields in Romania are mature and facing declining production, requiring high investments to mitigate this natural decline. In our other business divisions, such as the Petrobrazi refinery and Downstream Gas, the need for investment is lower because we have already completed major modernization programs in recent years. For example, the Petrobrazi refinery benefited from approximately 1.6 billion euros for modernization, and the filling stations were also modernized. In Downstream Gas, OMV Petrom invested 530 million euros to build the gas-fired Brazi Power plant, which was commissioned in 2012 and is the largest greenfield project in power generation in Romania over the last decades. Brazi power plant plays an active role in securing Romania’s power supply, covering demand during peak consumption times and providing balancing capacities to complement increasing power production from energy sources. In 2018, the power plant’s production covered 6% of Romania’s demand.

What criteria are you considering with priority as you are evaluating whether to move ahead with the final investment decision for the Neptun Deep project, given that OMV Petrom holds an important stake in the Black Sea?

The Neptun Deep project is a significant opportunity for Romania to increase revenues to the state budget, create new jobs, and secure Romania’s gas needs. For such large-scale projects, many pieces of the puzzle need to be aligned, including regulatory framework, fiscal stability, competitive terms, liberalized gas market, and key infrastructure. Deepwater projects require large-scale investment, requiring billions of dollars to be invested upfront, making stability and predictability of crucial importance.

Could you share your thoughts on what international companies should consider when considering setting up a business in Romania?

Well, Romania presents a compelling proposition to international businesses considering expanding their operations to the country. Firstly, Romania is an emerging economy, which means there are still vast untapped opportunities available, unlike in more developed economies. Additionally, Romania is part of the European Union, which provides various guarantees in terms of legal and regulatory frameworks, ensuring a level of stability and predictability for foreign investors.

One unique strength that Romania has in Europe is its abundance of oil and gas resources. This presents a significant opportunity for the country, as it can reduce reliance on foreign imports and create new business opportunities for investors. However, as with any emerging economy, there are still challenges to overcome. For example, the regulatory framework and infrastructure are not yet fully developed. Additionally, there has been some legislative volatility in recent times.

Despite these challenges, investors are still committed to Romania, and dialogue and consultations can help move things forward. Working together with local stakeholders can help identify and address any obstacles that may arise, leading to win-win solutions for both businesses and the country as a whole. Overall, Romania’s unique strengths and opportunities make it a promising destination for international businesses looking to expand their operations.