ECONOMY

Eight file non-binding bids in Romania’s key privatization

BUCHAREST – Eight suitors, including US and European firms, have submitted initial bids for Romania’s leading oil company SNP Petrom in one of Eastern Europe’s biggest oil privatizations, a minister said yesterday. Petrom’s sale, estimated to fetch about $1 billion and due to be completed by the end of March, is a key element in the country’s accords with international lenders and is seen as a litmus test for the government’s willingness to let go of strategic assets. Romania’s Economy Minister Dan Popescu said US firms Alon Inc and Conoco Philips had pulled out of the contest as they had not filed bids by a November 21 deadline. «Eight companies have lodged preliminary bids,» he told a news conference. Popescu also said the deadline for submitting binding bids would now be extended to the end of February 2004 from January 31, as was originally announced. Western analysts said the number of preliminary bids shows strong foreign interest in Romania’s biggest company, which offers access to the Black Sea and could become a springboard for transporting Middle East crude to Europe. «I believe this a high number. I think it shows a generally strong interest (in Petrom). This is the most important deal in Central and Eastern Europe if it happens,» Tamas Pletser, Erste Bank oil analyst, told Reuters. Strong bidders The remaining bidders are: US firm Occidental Oil and Gas, Italy’s ENI, Austria’s OMV, Hungary’s MOL, Poland’s PKN Orlen, Russia’s Gazprom, Greece’s Hellenic Petroleum and Swiss Glencore. Russia’s TNK-BP withdrew from the race earlier this month. The government, which owns around 93 percent of Petrom, plans to sell 33.34 percent to an investor who would at the same time buy newly issued shares to raise its stake to 51 percent. «Some consortia will surely be formed before the companies submit binding bids,» Pletser said. «It may happen that ENI and the other three Central European firms would try to form consortia.» MOL officials have not ruled out joining forces with PKN to bid for Czech Unipetrol chemical group and for Petrom. The two companies signed a letter of intent on Thursday to create Central Europe’s top fuel group. Other analysts said Central European oil firms and Italy’s ENI were among the most likely to win. Petrom, which has a work force of over 60,000, has both upstream facilities – drilling 6.0 million tons of crude and 6.1 billion cubic meters of gas per year – and a downstream business – two refineries and 600 filling stations. Petrom’s nine-month profit fell to 1.2 trillion lei ($35.63 million) in the first nine months of this year from 1.48 trillion in the same 2002 period. Seven percent of Petrom’s 37.7 trillion lei share capital trades on the Bucharest bourse. Its shares traded 0.68 percent down to 1,480 lei at midday.