ECONOMY

Deadline for Petrom extended

BUCHAREST (Reuters) – Romania yesterday extended by one month to April the deadline to submit binding bids in the sell-off of its leading oil company SNP Petrom, with oil majors shuffling their cards ahead of the big push. Earlier this month, Romania put off the deadline to sell the oil firm by three months to June, sparking fears that the process may stumble into political hurdles in an election year, with polls due in November. «We’re expecting final offers at the beginning of April,» Popescu told reporters. He did not elaborate. Seven firms are lined up to bid for Petrom, whose sale is estimated by analysts to fetch about $1.0 billion. They are US firm Occidental Oil and Gas, Austria’s OMV, Hungary’s MOL, Poland’s PKN Orlen, Russia’s Gazprom, Greece’s Hellenic Petroleum and Swiss firm Glencore. The government, which owns 93 percent of Petrom, aims to sell about a third to an investor which would then buy newly issued shares to raise its stake to 51 percent. Analysts said the postponement risks undermining the credibility of Petrom’s privatization, seen as a test case of the government’s willingness to let go of strategic assets ahead of Romania’s joining the European Union as early as 2007. Popescu said LUKOIL, the Russian oil giant, which said yesterday it plans to negotiate with the winning bidder to buy some of Petrom’s assets, was welcome if it added value to the company. «I can only welcome any presence which would strengthen Petrom,» Popescu said. «This company should come out stronger after privatization, not weaker.» LUKOIL officials have said the company was interested only in Petrom’s downstream operations – refining and retail – and that they would not bid alone for Petrom because, as they own Petrotel refinery in Romania, they would have formed a monopoly. Petrom, with around 60 percent of the domestic oil market, has upstream operations and downstream – two refineries and 600 filling stations. Popescu said OMV, which owns 25 percent of Romania’s second-largest oil company Rompetrol, should also consider its position on the market to avoid becoming a monopoly.