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Strategic and Operational Performance Assessment at Petrom

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Introduction

Contents: * Introduction : About Petrom - Industry and competitor analysis * Process Management - The innovative side of the company - Exploration and Productio - Refining and Marketing - Gas and Power * Strategic Level Assessment * Operational Level Assesment * Future Predictions - Resources for the Future - Respect for the Future * Analysis and Conclusions Project based on Petrom inside information. Introduction With activities in the business segments of Exploration and Production, Refining, Marketing as well as Gas, Petrom has proved oil and gas reserves of 940 mn boe, a maximum refining capacity of 8 million metric tons per year, approximately 550 filling stations in Romania and 269 filling stations in Moldova, Bulgaria and Serbia. In 2008, the turnover of the company was EUR 4,552 mn and EBITDA was EUR 969 million. After its privatization in 2004, the company recorded positive results. The modernization process initiated in 2005 is underway in accordance. Petrom is the sole crude oil producer in Romania and accounts for half of Romanian gas production. The domestic and international oil and gas production amounted to 71 mn boe in 2008. The aim of the company is to stabilize and increase the production of the mature fields they operate, through a sustained and comprehensive investment program. The company produces crude oil at two refineries, Petrobrazi and Arpechim, with a total installed capacity of 8 mn tons per year. In order to improve their product quality and productivity, they have implemented a significant restructuring and modernization program, underpinned by capital investments. We supply our products through 550 filling stations in Romania, and a further 269 stations in neighboring countries (including our affiliates). The company is also the leading provider of aviation fuel services in Romania and the number one player on the local LPG market. Petrom is an important player in the Romanian gas market, covering all gas market segments. ...read more.

Middle

We therefore committed to developing a power generation portfolio in order to leverage the value of natural gas while pursuing relevant opportunities in the renewable energy field. Meanwhile, we will continue to leverage our role as the OMV Group operational hub for marketing in Southeastern Europe and for exploration and production in Romania and the Caspian region, which is our core priority. Sustainable development through diversification of energy sources The extension of our activities in the energy sector is a significant component for the sustainable development of the company. To this end, we plan to develop a portfolio of projects covering energy from both conventional and renewable sources. As part of this process, we are expanding our value chain to leverage the value of the natural gas by developing our own power generation business and we are positioning ourselves to enter the renewable energy market, with a focus on wind projects in order to reduce carbon intensity. Moreover, we are committed to sustainable development based on good corporate governance, high standards of corporate social responsibility, clearly defined corporate values and our internal code of conduct. After a profound and successful restructuring and modernization process, Petrom aims to become the key player in the regional energy market. In order to reach our objective of becoming the leading integrated energy player in SEE, with increased performance and flexibility, we will focus our efforts on consolidating and expanding the hydrocarbons business, on business portfolio diversification through power production, on improving efficiency and maximizing the integration value in all units. Against the background of major economic and environmental challenges Petrom continues to invest in key projects to maximize performance. In this way, we will secure our sustainable growth and ensure a diversified portfolio of energy products, from fuels to gas and power, at EU quality specifications for our customers. With annual investments of more than EUR 1 bn, we will continue to be a significant contributor to economic growth in Romania through the multiplying effect of our investments. ...read more.

Conclusion

- 4,307,710 euros were invested in community and sustainable business practices (business ethics, corporate governance, health and safety, employee development) - 4,7 million of Romanians from 16 counties will be able to benefit from emergency and specialty medical services - 140,400 trees planted on approximately 35 hectares of land throughout the country in benefit of local communities from Prahova, Bacau, Vaslui, Suceava, Galati, Dolj, Giurgiu counties and Bucharest - 318 enlisted projects out of which 23 solutions for communities financed during the project contests from Andrei's Country and that will benefit 400,000 people - 2 schools completely rehabilitated and another 16 educational institutions renovated and equipped with new furniture that benefits 4,600 pupils from rural areas in Gorj, Teleorman, Arges, Giurgiu, D�mbovita, Prahova, Braila, Buzau, Ialomita and Galati counties - Approximately 10,500 students familiarized with environmental protection notions, civic involvement, health, road and indoors safety - Over 300 young Olympics with exceptional results were awarded and supported on their road to performance with monthly scholarships, prizes or participation in career coaching activities and summer camps - 2,300 students from Bacau, Salaj and V�lcea benefited from workshops held by Petrom Olympics in Physics, Geography, Chemistry, Psychology, Medicine, Business or Dance during the project "Knowledge Caravan" - 737 kindergarten children from the rural area were prepared for their integration in the 1st grade - Over 300 professors throughout Romania learned new informal teaching methods and developed their eco-civic teaching abilities - 400 students from 11 highschools from Bihor, Bacau, Buzau, Arges, V�lcea and Giurgiu counties followed leadership and personal development courses Conclusion The oil and gas industry is witnessing technological reform that can transform the nature of its business. Romania's largest company, Petrom, has taken the initiative to use Cisco's expertise to revolutionize its communication system. IP technology now enables Petrom to centrally manage its concerns while possessing the capacity to expand globally with uniformed filling stations. Customers will be able to enjoy a brand experience by using filling stations as retail experiences, enhancing loyalty to Petrom in the world's first oil country. ...read more.

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