|
European Bank approves ECU 22 million loan to improve oil production in Romania
The Board of Directors of the European Bank for Reconstruction and Development today approved an ECU 22 million (US$ 27.5 million) loan to the Autonomous Oil Company of Romania (Petrom), a state-owned enterprise, to help improve the productivity of its operations at selected oil fields. The loan is guaranteed by the Romanian Government.
Mario Sarcinelli, Vice President of the Bank in charge of Development Banking, said: "By giving financial support to this Petroleum Pilot Modernisation Project, the European Bank will help Petrom modernise its operations, save the Government foreign exchange by curbing the need to import oil, and, more importantly, help promote future involvement of the private sector in oil activities."
The project is conceived as a pilot operation to improve oil production operations with modernised equipment in three of Petrom's 25 production units. This is consistent with the Romanian Government's strategy to slow down the decline of domestic oil and gas production. In addition to contributing to more efficient oil production, the project is designed to assist Petrom in actions that are needed for planning its restructuring, such as establishing commercial accounting systems. It is also to help Petrom modernize its research and development activity, particularly in the area of environmental protection, and prepare the foundation for a smooth transition to increased private sector involvement.
The total cost of the project is estimated at ECU 30.7 million: the European Bank loan will provide ECU 22 million, ECU 1.1 million will be granted out of technical cooperation funds, and ECU 7.6 million from Petrom.
|
