 ENERGY |
Romania is one of the few European oil producing countries, exporting a large part of its production. Paradoxically, the loss of markets and the slowdown of the economy have brought about a dramatic decrease of energy consumption. Many factories have closed down or are working well below their capacity and a number of companies have left their energy bills unpaid. This is one of the major problems that affect Conel, the National Electricity Company whose main task is to insure the access to the national power sector, coordinating its 3 subsidiaries, Termoelectrica, Hidroelectrica and Electrica.
"Many companies have debts and cannot pay us, but we cannot cut their electricity just like that. For the time being many companies ask for discounts in order to be able to continue operating, or they ask us to cancel the penalties for paybacks. The problem is that many companies have not changed their mentality and they still think that energy should be for free, like in communist times", protests Mr. Tudor Serban, General Manager of Conel. As a consequence of this and to reduce expenses, a number of thermal plants are going to be closed down. Mr. Serban believes that the future of the sector relies in its penetration by foreign investors: "We need foreign investors to rehabilitate some of these plants because many are obsolete and need to be improved. For the next years we need to keep competitiveness in this field. For this reason we will try to transform some of these into IPP's. We are also open to joint ventures with foreign capital". Conel has recently embarked a restructuring process that will culminate with its breakdown and full privatization. | 
Given its condition as oil producer, Romania counts with a number of companies highly specialized in the engineering and construction of oil plants, extraction and distribution (Petrom), refining (Rafo) or responsible for the pipeline distribution (Conpet). Probably the best known abroad is Rompetrol, the international face of Romanian oil and gas industry, providing equipment for the sector. Over its 25 years of experience, they have operated in some of the most important Libya, Iraq, Russia, Mozambique, etc. and even though their international operations somewhat decreased in the early 90's, they are re-launching the company trying to capture countries where they had a very strong imange. Even though most of its capital is Romanian, its senior management is mostly western, as Mr. John Works, President and CEO said: "They are all foreigners or foreign trained, and they bring into the company western management, cost control and financial reporting".
Mr. Works objective is "to build a vertically integrated oil company that goes all the way from owning oil fields and producing oil and all the down to refining and selling gasoline through a retail network. We are growing in both directions". For that reason they have just acquired a Vega, a specialized refinery, and Petros, a manufacturer of oil field equipment. They have plans to develop their own gas station network. However the core of their activity will remain abroad. Their most ambitious plan: to grow as fast as they can so that in 3-4 years a large international company can buy them. |
