NP PETROM EQUITY PRIVATISATION

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 34915

Status Complete

Location

Romania

Business Sector

Natural Resources

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 34915

Status Complete

Location

Romania

Business Sector

Natural Resources

Notice Type

Private

Environmental Category

Approval Date

20 Jul 2004

Disclosure date

19 Jul 2004

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The proposed project consist of subscription of up to 5% ordinary shares of SNP Petrom, SA, Romania through a capital increase , alongside 51% of the Strategic Investor in the process of on-going privatisation.

The transaction will require conversion of part or whole of the Bank’s outstanding amount of US$ 73 million under the existing SNP Petrom Pre-Privatisation Loan (OPID 4410).

Transition Impact

The rationale for the Bank's participation is to support the privatisation and liberalisation of oil and gas sector in Romania. The Bank’s participation in the transaction directly supports the following:

More widespread private ownership
The possible equity presence of the Bank, as an international financial institution with experience in the sector and regional privatisation market, will contribute to the successful completion of one of largest privatisation in the region and at the end of this first phase of the privatisation, more than 60% of Petrom’s ownership will be in private hands.
Setting standards of corporate governance and business conduct
The Bank’s participation is expected to increase standards through ensuring: the quality and transparency of the privatisation process and protection for minority shareholders rights.

In addition, as a result of the Bank’s participation, the proposed transaction will carry some other transition impact potential including; (a) transfer of skills to the Romanian oil and gas industry; (b) the demonstration effect arising from a successful flagship privatisation conducted according to best international practice and (c) market expansion.

The Client

SNP Petrom SA is the national integrated oil and gas company of Romania. It is producing approx 6 m tons of crude oil and 6 bln cubic meters of natural gas per year. Its two refineries process a combined about 8m tons per year and also the firm has a network of around 700 petrol stations which gives a market share of about 40%.

EBRD Finance

Up to US$ 73 million equity financing, through conversion of part or whole outstanding amount under the existing SNP Petrom Pre-Privatisation Loan (OPID 4410).

Project Cost

To be confirmed upon finalisation of the privatisation process.

Environmental Impact

C/1 screened project. Environmental due diligence on the existing loan revealed various environmental issues at Arpechim and Petrobrazi and an Environmental Action Plan is being implemented to address these issues. The main components of this USD 108 million EAP are the following: (i) volatile organic vapour recovery system at the gasoline loading facility; (ii) installation of acrylonitril incinerator; (iii) ammonia and propane vapour recovery; (iv) refurbishment of the Carbon Black Plant; (v) refurbishment of vacuum distillate hydro-treating in order to reduce SO2 emissions; (vi) installation of low NOX burners; (vii) installation of secondary seals on floating roof tanks and vapour recovery units on fixed roof tanks; (viii) installation of a sludge incinerator; (ix) upgrading of waste water treatment, including biological treatment of phenol, sour water stripping and membrane-based aeration system; (x) installation of a new gas recovery compressor and new flare heads; (xi) installation of Sulphur Recovery Unit and Tail Gas Unit; (xii) building a cogeneration plant; (xiii) upgrading environmental monitoring systems. Petrom has published an Environmental Policy statement and is committed to implementing an ISO 14,001 certified Environmental Management System for all its activities. At present two of its sites are ISO 14,001 certified. Petrom is committed to continue the implementation of its Environmental Compliance Programme for 2003-2007. This will bring Petrom’s operations into compliance with present Romanian standards. Further environmental investigations will be conducted in order to determine needs for environmental investments and structural changes in order to bring Petrom into compliance with EU IPPC standards. A specific investment programme and EAP will then be identified. It should be noted that the EAP for the two refineries remain in place.

Technical Cooperation

None.

Company Contact

Lucian Motiu
EBRD Project Manager

Tel: +40 21 315 5443
Fax: +40 21 310 0610

Email: Lucian.Motiu@petrom.ro

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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