“We’ve initiated a reexamination process of the company’s equity investment projects, based on two criteria, namely profitability of each investment project and retrieval period of investment in order to maintain a solid balance. We will continue to focus on upgrading activities, program started in 2005”, said the representatives of Petrom Romania.

The company did not exclude contracting loans from local and international market (both corporate financing and on specific projects).

“Despite the unprecedented events in the past few weeks on financial and crude oil market, the reorganization program of Petrom will proceed. As it is an integrated oil and gas company, with solid cash flow, and strategic partnership with OMV, Petrom has the financial possibility to overcome this period marked by weaker economic climate, geared by financial markets’ outburst”, according to statements of Petrom representatives.

In an effort to consolidate their position, the company unveiled a reorganization process and aims to establishing the priorities of equity investment projects, in order to maintain a solid balance.
“In an effort to upkeep the company’s cash flow, against the negative impact fuelled by the downdraft of crude oil price, we called upon risk coverage instruments to partially secure the cash earnings in E&P segment for approximately 40% of crude oil output estimated for 2009. In order to acquire this objective, there have been used margins for sale options, through which is ensured a minimum level of the price of 80 US dollars/bbl. In the event of a price slump below 65 US dollars/bbl in 2009, we will receive an additional amount of 15 US dollars/bbl, through the risk coverage instrument. The sale options expenses have been covered by purchase options, in order to avoid an initial investment (cost zero structure), whereas through this, Petrom will not benefit of the crude oil price increase above 110 US dollars/bbl in 2009, for the 40% production volume”, Petrom representatives added.

Translated by Camelia Oancea