2 0 11
A N N U A L R E P O R T
3
4 . . . . . . . . . . Letter from the CEO
6 . . . . . . . . . . Refining and Petrochemicals PetromidiaRefinery
VegaRefinery
RompetrolPetrochemicals
20 . . . . . . . . Trading
32 . . . . . . . . Retail RompetrolDownstream
DyneffFranceandSpain
RompetrolBulgaria
RompetrolMoldova
RompetrolGeorgia
RompetrolGas
50 . . . . . . . . Business Development & Industrial Services RompetrolWellServices
DrillingandWorkover
ExplorationandProduction
Rominserv
RQC
Palplast
Ecomaster
70 . . . . . . . . Corporate Social Responsibility
80 . . . . . . . . Marketing, Corporate Governance & Finance Marketing
CorporateGovernance
Finance
Contents
4 AnnualReport2011
“Evolution is change and adaptation
to the constantly changing environment,
while seeing the good opportunities
for future investments.”
Letter from the CEO
5
Evolutionischangeandadaptationtotheconstantlychangingenvironment,while
seeingthegoodopportunitiesforfutureinvestments.Overthelastyears,theindustry
changedalot,andweasagroupofcompanies,hadtoadapttothesechangesinorder
tocontinueouractivitiesandimproveouroperations.Thus,in2011wemanagedto
comeclosertoourgroupcapitalobjectives,tooptimizeourcurrentlineofbusinessinall
countriesandimprovethecompany’skeyactivities.
Oneofthekeyobjectivesfor2011wastocontinuetheinvestmentpackageforthe
PetromidiaRefinery,whichaimstoincreasetherefinery’scapacityandgeneralworkflow.
Inthisregard,majorimprovementshavebeenmadetowardstheproject’sfinalization,
andthewholepackageistobecommissionedin2012.Oneofthekeycompaniesin
makingthispossibleisRominserv,theRompetrolGroup’sgeneralentrepreneurandone
oftheleadinglocalcompaniesinEPCM(Engineering,Procurement,andConstruction
Management).
Thecompletionofthisproject,alongwiththeconstantdevelopmentofouroperations
abroad,arepartofTheRompetrolGroup’sstrategytoimprovetheenergeticbridge
betweenCentralAsia,andEurope.WebuyouroilfromKazMunayGasinKazakhstan,
processesitatPetromidiainRomania,anddistributetheproductsintheBlackSeabasin,
theBalkans,CentralandEasternEurope.
OurTradingdivision,responsibleforoptimizingtheentiresupplychaininTRG,has
shownincreasedresults,especiallyinFranceandSpain.Onthesemarkets,ourexports
grewby50%,whilethevolumessoldtothegeographicallyclosesubsidiarieshave
showna25%increase.
AnessentialcomponentofTRG’sactivitiesistheRetaildivision,whichmanaged
tomaintainover1,000fueldistributionpointsacross6Europeancountries,while
announcingitsexpansionontheTurkishmarket.Eventhoughtheeconomicconditions
werenotthegreatest,ourRetailsubsidiariesadaptedtothemarketchangeandachieved
significantcostimprovements,increasedvolumessoldoreventhecommissioningof
newgas-stations.
Intunewiththegroup’soverallstrategy,ourretailnetworkwillprovidebetterfuelsfor
ourclients,mainlythankstothemodernizationpackageimplementedatPetromidia.
Wehelpedthecommunitieswhereweworkandlivebycontinuingournational
programentitled“Togetherforeachandeveryone”,withstrongemphasisonhealth
andenvironmentissues.Thus,RompetrolmaintaineditspartnershipwithSMURD,the
emergencymedicalrescueunit,implementedcloseto20projectsin15countiesand
invested25millionUSDinenvironmentalprotection.
OnemajorculturalmilestoneinRomaniain2011wastheGeorgeEnescuInternational
MusicFestival,whichbroughttoBucharestthebestclassicalartistsintheworld.
Rompetrolwasanactivepartneroftheevent,providingfuelfortheentirefleetofcars
responsiblewiththefestivallogistics.
Allexperiencegainedin2011,aswellasduringthedecadesofactivitiesperformedon
fourcontinents,givesmetheconfidencethatpeopleofRompetrolcansurpassany
challenge.Thecompanywillevolveandconstantlyimproveitsoperations,regardlessof
thechangesitmeets.
Saduokhas Meraliyev
CEOofTheRompetrolGroup
LetterfromtheCEO
6 AnnualReport2011Refining and Petrochemicals
TheRefiningandPetrochemicalsdivisioncomprisesthreeproductionentities:
—ThePetromidiaRefinery(locatedinNăvodari,Constanţa)
—TheVegaRefinery(locatedinPloiești)
—RompetrolPetrochemicals
WhilePetromidiahasapproximately29%oftherefiningcapacityinRomania
(est.capacityfor2012–5,000,000tons/year),beingtheonlyspecializedplantlocatedon
theBlackSeacoast,Vegaemphasizesonorganicsolvents,bitumenorecologicalheating
fuels(capacity300,000tons/year).
RompetrolPetrochemicalsistheonlylocalproducerofpetrochemicals,withanannual
productioncapacityofover200,000tonesofpolymers(polypropylene,polyethylene
oflowandhighdensity).
TheBusinessUnithastwooperatingentities:
—RompetrolRefining(PetromidiaandVegarefineries);
—RompetrolPetrochemicals.
RefiningandPetrochemicals
growth
8 AnnualReport2011
Rompetrolcontinuedin2011thegeneralinvestmentprogram,whichaimstoincrease
theprocessingcapacityto5milliontonsofrawmaterial(from4.03milliontonsin2009
and1.15milliontonsin2000–beforethetakeoverbyTheRompetrolGroup).Tothis
extent,thecompanycompletedtheconstructionof6newunits.
TheyarescheduledtoentertheoperationalflowoftherefineryintheQ32012,when
threemoreinstallationswillbecompleted(theMildHydroCrackinginstallation,the
HydrogenandSulfurrecoveryunit).
Theprogramwasinitiatedin2006as“RefineryInvestmentPackage2010”,related
investmentvaluebeingestimatedatover377millionUSD.Afterthecompletionofthe
investment,therefinerywillproducefuel(petrol)withsulfurcontentbelow10ppm,
whileprocessing100%Uraloil.
Petromidiawillalsoshowincreasedproductionofdieselyields,alongwithadifferent
productionstructure,moresuitableforthecurrentmarketdemands.
TheGroupcreatedtheinfrastructurefortheseinvestments,byfocusingalsoon
complementaryprojectslocatedonthePetromidiaplatform–off-shoreoilterminalon
theBlackSeacoast,fuelexportcapacityincreaseforgasolineanddiesel,andanLPG
terminalonthe9thberthintheMidiaport.
ThetotalexportedvaluegeneratedbyRompetrolRefining,RompetrolGasand
RompetrolPetrochemicalsincreasedbymorethan53%YTY,upto1.5billionUSD.
Therefore,thecompanywasasignificantcontributortotheRomanianstatebudget,the
totalcontributionbeingofover1.2billionUSD,200millionUSDmorethanin2010.
2011 Key Performances— 195millionUSDinvestedinefficiencyincrease,environmentalprotectionand
processingcapacityofPetromidiaandVega.
— 84%efficiencyinwhiteyields,thelargestlevelreachedbyPetromidiainthelast5years.
— Consumptionreduceby8%
— AlignmenttotheEUenvironmentalrequirements,intermsofairemissionsand
hazardouswastedisposal.
BycommissioningthenewinstallationsonthePetromidiaplatform,RompetrolRafinare
willbeabletoproduceinS22012onlyEuro5byprocessingonlysulfurousoil.This
happensamidanincreaseoftheprocessingcapacityupto5milliontonsperyear.
Duringthescheduledstopin2011,themaincatalysts,neededinordertomaintainand
increasethefuelquality,werereplaced.Throughthesameperiod,refiningmaintenance
workwasdone,aswellasspecializedworksmeanttointegratethenewunitsinthe
processingflow.
PetromidiaRefinery
195millionUSDinvestedinefficiencyincrease,environmentalprotectionandprocessingcapacity
Refining and Petrochemicals
9
The Reconfiguration of the Vacuum Distillation and Hydrofining Unit to Diesel HydrofiningPatofthecapacityincreaseprogram,theprojects’purposewastotransformtheVacuum
DistillationandHydrofiningunit(VDH)intoaDieselHydrofiningone,abletoprocessthe
rawmaterialathighquality(Euro5dieselcomponent)andsafetystandards,ataflowof
180cm/hour.Thefinalizationofthisinvestmentwillallowtheincreaseofdieselyields.
Thetotalvalueoftheinvestmentswas7.5millionUSD.
The modernization of the Gas Desulfurization unitWiththeincreaseoftheprocessedgasandaminesresultedfromtherefinery’scapacity
increase,thecompanymodernizedthegasdesulfurizationinstallationandintegrated
intheproductionflowtheMildHydroCrackinginstallation(MHC).TheMHCunitisan
importantproviderofsulfurousgasandamine.
ThefinalizationoftheprojectledtoaincreasedprocessingcapacityofH2Sgas,
from19,000Nmc/hto32,800Nmc/h,andofamine,from100to195mc/h.Thetotal
investmentamountsto18millionUSD.
New Flame systemWithaninvestmentvalueof12.7millionUSD,thenewflamesystemensuresthe
following:
— BurnsthegasesproducedatPetromidia.
— Protectstheequipmentfromover-pressure.
— Eliminatesthedangerofexplosionorairpolution,inattunewiththelocaland
internationalEnvironmentalLegislation(OUGnr.152/2005andOUGnr.195/2005,as
wellastheactissuedbytheEuropeanCommissioninFebruary,2003,onthebest
availabletechniquesinoil&gasrefining).
The construction of High Purity Nitrogen and Compressed Air installationsTheconstructionoftheHPNinstallationispartofthemodernizationprogrammeantfor
thenitrogen,instrumentalandtechnicalairdistributionunit,necessarytooperatethe
refineryandthepetrochemicalunitunderanycircumstances.
Theprojectalsoaimedfortheincreaseoftheliquidnitrogenvaporizationcapacity
from3,000to7,500Nmc/h.Thiswillensurethenecessarynitrogenforthestartofall
installationsinthe2010package–Nitrogenproductionunit,MildHydroCrackingunit
andthenewlineofSulfurRecoveryunit.Readyin2012,theunithasareducedenergy
consumptionofover40%.
Representative productsProduction results
RompetrolRafinarehasincreasedby10.2%thequantitiesofprocessedrawmaterialYTY,
from3.5milliontons,to3.9.Also,consideringthe18daysofgeneralrevision,whenthe
mechanicalavailabilitywaslower,theutilizationcapacitydecreasedfrom80.2%,
to77.56%.
40%
5
reductionofenergyconsumption
milliontonsperyearincreaseoftheprocessingcapacity
10 AnnualReport2011
Total raw material (tons) 3,896,516
Crude oil (tons) 3,729,615
Finished goods (tons) 3,812,199
Petrol(tons) 1,258,126
DieselOil(tons) 1,497,116
In2011,thevolumesoffinishedgoodsincreaseby12%,andby54%,thetotalsaleslevel.
Thiswassustainedbythegrowthinsalesofthefinishedgoods,alongwiththe36%
increaseofinternationalquotations.
Refining and Petrochemicals
Quantities of raw material processed annually (thousand tons)
0
1,000
2,000
3,000
4,000
5,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
-Total -Crude oil
Total raw material processed per month, 2011 (thousand tons)
0
100
200
300
400
DecNovOctSepAugJulJunMayAprMarFebJan
Volumes of finished productssold (mt)
-2010 -2011
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2010
3,003,0643,359,004
2011
Meanwhile,theamountofmotorfuelsoldincreasedby14%.
10.2%
54%
increaseofprocessedrawmaterials
increaseoftotalsaleslevel
11
Market outletsThedivisionfocuseditstradingactivitiesontheoptimizationofthecommercialflowsfor
thepurchaseofrawmaterialsandsalesoffinishedgoods.Thevolumesofpurchasedraw
materialsincreasedbyapproximately6%,whilethefinishedproductssoldby12%.
Allcrudeoilacquisitionswerecarriedoutsolelythroughthegroup’stradingdivision,
VectorEnergy,whichhasalsotakenovermostofthevolumesofgasolineanddieselsold
onforeignmarkets.AllproductssoldbyRompetrolcompliedwiththeEUenvironmental
standards,placingtherefinery’sproductionatahigh-qualitystandard.Hence,the
positionofthecompanywasstrengthenedonthetraditionalmarkets.Moreover,starting
withJanuary1st,gasolineanddieselwith5%bio-componentwassold,asrequiredby
theEU’sregulations.
— 60%ofthefinishedgoodsweresoldonthelocalmarket.
— 53%ofthemotorfuelsoldwenttothelocalmarket.
-2010 -2011
Total sales, 2011 vs. 2010 (tons)
DecNovOctSepAugJulJunMayAprMarFebJan
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
-Domestic -Export
Domestic vs. External sales in 2011 (tons)
DecNovOctSepAugJulJunMayAprMarFebJan
0
50,000
100,000
150,000
200,000
250,000
Abroad,petroleumproductsweresoldbothintheEUspace(25%),aswellasoutside
ofit(75%).Almost80%oftheforeignsalesweredirectedtoEuropeanmarketsin
Romania’sproximity.
ThemainexportdestinationsforRompetrolRefiningproductsarethefollowing:
Gasoline Georgia,Ukraine,Turkey,Lebanon,Moldova
Diesel Bulgaria,Turkey,Georgia,Serbia,Moldova,Lebanon
Coke Ukraine,Greece,Turkey,Serbia
Sulfur Egypt,Ukraine,Greece
60% ofthefinishedgoodswentonthelocalmarket
12 AnnualReport2011
Themaindomesticcustomerswere
RompetrolDowstream,Rompetrol
Gas,RompetrolPetrochemicals,
AirBPSales,andAirTotalRomania.
Themainexternalcustomerswere:
VectorEnergy,RompetrolMoldova,
RompetrolBulgaria,CalviTrade
Limited,TransamoniaSwitzerland,
andSteuerman.
Major objectives for 2012
QHSE Objectives (Quality, Health, Safety, Environment)
— RecertificationoftheintegratedQHSEmanagement,accordingtoISO&OHSAS
standards.
— ReachzeroaccidentsonthePetromidiaandVegaplatforms.
— Continuethe1.LIFE,meanttoincreasesafetyawareness,inordertoachieve3rdlevel
ofhealthandsafety,accordingtotheDuPontmatrix.
— Improvesafetyperformanceindicatorsestablishedatgrouplevel,byloweringthe
targetvaluewithmin0.5%YTY(autocrashrates,disabilityfrequency,incidencerate,
andfrequencyandseverityrates);
— RevieworrenewaloftheIntegratedEnvironmentAuthorizations,SecurityReportand
InternalEmergencyPlanforRompetrolRefining,byincludingnewinvestments;
— Participateinvolunteerandsocialresponsibilityprojectsintheneighboring
communities;
— Maintainacustomersatisfactionindicatorofmin.90%;
— RecertificationoftheautofuelsproducedbyRompetrolRefiningandadditives
producedbyVegaRefinery.
Operational objectives
— Tocompletethe“2010investmentpackage”.Aftertheprogramis100%implemented,
Petromidiawillstarttoprocessover5milliontonsofrawmaterialperyear.
— Theincreaseofdieselyieldsintherefinery’sproductstructure,duetotheincreasein
demandfordiesel.
— AlignwiththemandatoryEUproductsspecificationsforgasanddieselproduction–
produceonlyfuelswithbelow10ppm,whileprocessing100%sulfurousoil.
— Furtheroptimizationofthebusinessinordertoachieveanoperationalandfinancial
efficiencyashighaspossible;
— Currentactivitiesandassetsstrengthening.
Refining and Petrochemicals
-Export -ICS
ICS vs. Export (tons)
DieselGasolines
0
200,000
400,000
600,000
800,000
1,000,000
-Trading -Near abroad
Near abroad vs. Trading (tons)
DieselGasolines
0
200,000
400,000
600,000
800,000
1,000,000
Outofthetotalautomotivefuels
distributedontheexternalmarket,
approximately46%weredelivered
tosubsidiariesinMoldova,Bulgaria,
Georgia,andUkraine.
5 milliontonsperyearofprocessedrawmaterials
13
14 AnnualReport2011
RompetrolRefining–VegaPloiestiisaunitintendedfortheprocessingofspecial
products:organicsolvents,fuelsforheating,orspecialbitumen.
Theinvestmentactivityin2011atVegahasbeenfocusedonenergyefficiencyincrease,
diversificationofproducts,doublingtheproductioncapacityofthehexaneplant,
increaseofoperationalsafetyandabidanceofthecomplianceprogram.
In2012,Vegawillonlyprocessalternativerawmaterials(suchasNaphthagasoline,
C5-C6fraction,slurryandjetfuel).Theunitsoperatingontheplatformwillbe–hexane,
grinding,de-flavoring,refining,AFP,DVandbitumen.
2011 Key Performances— Thecompanykeptthevolumeofrawprocessedmaterialover335,000tons,achieving
recordnumbers–highestinsevenyears.
— 100%capacityincreaseoftheN-Hexaneplant,from70tons/day,to140tons/day.
— Achieved100%oftheplannedCAPEXworks–refinery’sboilermodernization,
thoroughtheassemblyofnoxburnersandtheautomationoftheCR3steamboiler.
— Technologicalconsumptiondecreasedto1.76%(from1.81%),throughtheintegration
ofnewprojectsandbetterstorageandhandlingofrawmaterialsandfinishedgoods.
— Decreasedenergyconsumptionto2.49GJ/mt(from2.7GJ).
— ContinuedtoworkontheprojectsintheIntegratedEnvironmentAuthorizationplan.
— 100%saleofproduction.
Representative products and production resultsVegaRefinery’sproductionisdividedintospecificproductgroups:
— Solvents:Organicsolvents–RompetrolSE,lightsolvents,lightn-hexanenaphtha
— Gas:ExtraIcalor
— WhitespiritandPetroleum
— Fuel
— Bitumen
— Oil
Vegaistheonlymanufacturerofn-hexaneinEasternEurope,usedforpolypropylene
productionandextractionofvegetableoilsinfoodindustry.Inaddition,VegaRefineryis
theonlymanufacturerinRomaniaof:
— Organicsolvents:RompetrolSE–itprovidesalowtoxicitylevelbyreducingsulfur
andaromatichydrocarbons.
— SpecialBitumen,usedinthemanufacturingofbituminousmasticsandfor
waterproofingworksinconstruction,metallicpipelinescorrosionprotection.
Vegaalsoproducesroadbitumenmodifiedwithpolymers,widelyusedinasphalting
worksforhightrafficroads.Therefineryproducesorganicheatingfuelsareproducedas
well,whichareinaccordancewithallstandardsimposedbytheEuropeanUnion.
VegaPloiestiRefinery
Refining and Petrochemicals
100% saleofproduction
15
Theproductionprogramfor2011wasexceededwithatotalproductionofrawmaterials
of336,646tons,1.5%YTY.
In2011,therefineryincreaseditswhitegoodsefficiencyinthetotalproduction,which
allowedstrengtheningitspresenceonforeignmarkets,especiallyontheorganic
solventsmarket.
Salesofwhiteproducts(Naphthagasoline,organicsolvents,n-hexaneandwhitespirit)
representabout63%oftotalsalesfor2011.Salesoffinishedproductsonforeignmarkets
were65%,whiletherest35%wassoldinRomania.
Major objectives in 2012
— Maximizethemarginsofnicheproducts.
— Obtaincertificationforallclassesofbitumenmodifiedwithpolymer.
— Achievesignificantreductionsinconsumptionofutilitiesandtechnology,
bycontinuingtheinvestmentprogram.
— Compliancewithenvironmentalrequirements.
-Budget -Actual
Processing of raw materials (tons)
ActualBudget
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000 331,816 336,646
-White products -Black products
Efficiency 2007–2011(tons)
2007 2008 2009 2010 2011
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
23%
77%
30%
70%
29%
71%
27%
73%
33%
67%
65%
35%
offinishedproductssoldonforeignmarkets
offinishedproductssoldinRomania
16 AnnualReport2011
2011 Key PerformancesThepetrochemicalsdivisionofRompetrolkeptitspositionassoleproducerofpolymers
inRomania–polypropyleneofhighandlowdensity.Thecompany’sdevelopment
strategyhasensuredaconstantgrowthofthelocalandinternationalmarketshare.Thus,
thecompanynowhasacompetitivepositionregionally,inalltheBalkansarea.
Oneofcompany’smajoradvantagesistheproximitytothecustomer.Thisensuresthat
theproductstheyorderedwillreachthemasspecified,throughtheJust-in-Timesystem,
whiletheRompetrolPetrochemicalsspecialistareconstantlygivingtechnicaladviceand
assistanceformonitoringtheirproductioncircuit.
Thecompany’sturnoverreached355millionUSDin2011,a34%increaseYTY.Thiswas
mainlyduetotheimprovementofinternationalpricesforpetrochemicalproducts,along
withtheincreaseofthetradedvolumes.
Unfavorablemarketconditions,causedmainlybytheLibyansocio-economiccrisis,led
tolowmarginsinS22011,whichaffectedthedivision’sfinancialresults,thusreaching
lowerfiguresYTY.
Thequantityofprocessedrawmaterialwashigherin2011,mainlythankstotheHDPE
installationrestart,attheendof2010.Atthesametime,thesalesvolumesin2011
increasedby24%YTY.
In2011theproductionofpolymersincreasedto188,315tons,comparedto149,901tons
in2010.RompetrolPetrochemicalsalsoimprovedtheaveragequalityoftheproduced
polymers,reaching98.1%offullycompliantpetrochemicals,1.2%YTYincrease.
Inviewoffuturedevelopmentofactivities,RompetrolPetrochemicalsinitiatedin
2011thelastphaseofthemodernizationprogramfortheHDPEplant(highdensity
polyethylene).Throughthis,thecompanyextendeditsproductrangewithhigh-blown
bodies,thinfilm,orpipeforinflammablegastransportation.Theprogramwillbe
finalizedinQ32012,whentechnologicaltestsarescheduled.
Key Technological Achievements in 2011— Thecompanyproduced68,500tonsofLDPE(low-densitypolyethylene),14%above
capacity,whilethePP(polyethylene)productionroseto88,000tons,10%abovethe
designedcapacity.
Amidanincreasedproductioncapacityandmarketshareofproducts,thecompanyhas
developedaseriesofprojectsinordertomodernizeitsfacilitiesandexpandthesupply
ofrawmaterialsandcommercialactivities.Theprojecthasthreestrategicdirections:
RompetrolPetrochemicals
Refining and Petrochemicals
355
24%
millionUSDturnover
increaseofsalesvolumes
17
Development, capacity increase, improved products quality
— ThecompanyimplementedaPIsystem,thattracks,archivesandprocesses
operationaldata.Thisledtotheoptimizationofplantoperations,improvedreporting
dataandincreasedproductquality,mostlythankstorapiddataanalysysand
visualization.
— Processcontrollabilityincrease,withhighreliabilityonpolymerqualitycontroland
settingsadjustmentoftheplantPPextruders.
— Modernizationoflaboratoryequipment–chromatographgasforrapidand
expandedanalysisofgas.
— Inadditiontothis,PetrochemicalscontinuedtheprojecttoenlargetheHDPE
productionrange.
Safety increase
— Theinstallationofagasdetectionsysteminthepyrolysisplantthatensuresanoverall
safetyincreaseintheplant’soperationsusingaperformantgasdetectionsystem.
— ISCIRrenewalworks/capitalrepairs–RompetrolPetrochemicalsinstallationsrevision.
Environment
— ThemodernizationofburnersforC121A/BboilerstoreduceNOXfromburntgases
belowthe150ppmlimit.Theimplementationofthisprojectmadethecompany
complianttotheEUregulationsonthepollutantsdischargedintheair.
— Upgradeoftheventilationsystem,neededinordertoensureproperworking
environment.
— Rehabilitationoftheacidandbasesplatform,byrestoringtheplatform’santi-acid
protection.
ProductionPolypropyleneproductionreached88,079tons/year,whileLDPEandHDPEproduction
reached68,544tons,and31,692tons,giventhattheHDPEplantoperatedintwostages:
fromJanuarytoAprilandfromAugusttoSeptember.
RompetrolPetrochemicalsisthesoleproducerofpolypropylene(PP)andpolyethylene
inRomania,showingadomesticmarketshareof50.2%forPP,23.2%forLDPEand9.1%
forHDPE,accordingtothedatafromtheNationalInstituteofStatistics.
Throughthedevelopmentofstrategiesthatemphasizeoncustomersatisfactionand
loyalty,thecompanymanagedtoimproveitspositiononthelocalmarket,aswellas
ontheregionalone.ThisincludestheBlackSeaandMediterraneanbasins,Central,
andEasternEurope.
200 thousandtonsoffinishedgoodsweresoldin2011
-PP -LDPE -HDPE -Total
Polymers Production 2000–2011
201120102009200820072006200520042003200220012000
0
50,000
100,000
150,000
200,000
18,51935,915
56,908 63,06573,862 74,359
96,958
161,718
196,586187,022 188,315
149,901
18 AnnualReport2011
Oneofthecompany’smajor
commercialadvantagesisthedirect
accesstoalltransportationlinks
(road,sea,rail),whichfacilitatedthe
logisticstotheBalkans(Macedonia),
AsiaandMiddleEast,aswellas
theupkeepofthecurrentregional
partners–Bulgaria,Serbia,Italy,
Greece,PolandandTurkey.
TradingInadditiontoproduction,thecompanyrunsamarketingbusinessforavarietyof
petrochemicalproducts,whicharecurrentlynotintheproductionportfolioofthe
petrochemicalscomplex.Nevertheless,seeingtheincreaseindemand,thecompany
capitalizedonthisopportunitybytradingspecialsortsofPP,HDPEpipeaprons,LDPE
andPET.
In2011tradingwithPETledtoa12%marketshareonamarketwithanincreasing
competition.
Refining and Petrochemicals
-Domestic -Export
Sales on destinations 2011
DecNovOctSepAugJulJunMayAprMarFebJan
0
3,000.00
6,000.00
9,000.00
12,000.00
15,000.00
-Own Production -Trading
Sales volumes (tons)
20092008 2010 2011
0
50,000.00
100,000.00
150,000.00
200,000.00
DecNovOctSepAugJulJunMayAprMarFebJan
-PP -LDPE -HDPE -LLDPE imp -HDPE imp -PET
Monthly sales by product type (tons)
0
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
19
Quality-Environment-Occupational Health and SafetyRompetrolPetrochemicalsemphasizedonestablishingabettercommunicationlink
betweentheproducerandthefinalprocessor,bygatheringfeedbackconstantly
fromtheprocessingdepartmentandintegratingitinthedevelopmentandproduct
improvementstrategies.
Thetechnicalassistancedepartmentcontinuedstrengtheningthepartnershipswith
RompetrolPetrochemicals’customers,byidentifyingtheaspectsofproductbehavior
duringprocessingandtechnicalsolutions.Thedepartmentwasalsoinvolvedinthe
developmentprogramofRPproductsfromHDPE.
QHSE accomplishments in 2011
— GLISqualitymanagement–ISO9001,environmental–ISO14001,andocupational
healthandsafety–BSOHSAS18001surveillanceauditswereconducted.
— TheIntegratedEnvironmentalAuthorizationnr.9/03.10.2011,validfor10years,was
renewed.
— TheWaterManagementpermitrenewed.
— AuthorizationtoconductnuclearactivitiesandPlanforSpillPreventionandControl
bothrenewed.
— Recoveryandrecyclingobjectivesforpackagingwastelegallyestablishedfor2011
weremadeonacontractualbasis,bytakingresponsibilityforrecoveryandrecycling
bySCEcoRomPackagingSA.
— Inthefirsthalfof2011,thePetrochemicalslabsreceivedreaccreditationinaccordance
withtherequirementsofSREN17025/2005bytheNationalAccreditation–RENAR.
Major Objectives for 2012
— CompletionofthefirstphaseintheHDPEmodernizationprogram.Theunitproduces
specializedapronsandintroducesnewapronsfornewapplications.Thisincludes
polyethylenepressurepipes,thinfilm,blowinglargepot,orcableprotection.
— Achieve:
— 20%domesticmarketshareforHDPEproducts.
— 55%domesticmarketshareforPP.
— 25%domesticmarketshareforLDPE.
— Developthedirectsaleschanneltoend-userscustomersonmarketsabroad.
— StrengthenRompetrolPetrochemicalspositiononthelocalandBalkanicmarket.
55%PP
25%LDPE
20%HDPE
Domesticmarketshare
toachieve
20 AnnualReport2011
TheTradingBusinessUnitisresponsiblefortheoptimizationoftheentiresupply
chainacrossTheRompetrolGroup(TRG),fromfeedstocksupplytofinalproducts’
saleandisactivefromtheCaspianSeaareatotheWesternMediterraneanSea.
TheTradingBusinessUnitincludes
thefollowingoperationalentities:
—VectorEnergyAG
—RompetrolUkraine
—ByronShippingLtd
—MidiaMarineTerminal
—RomaniaOperationsDivision
Trading
Trading
energy bridge
22 AnnualReport2011
2011 Key Performances— Volumeoftradedcrudeoilwas0.3milliontonsandproductexportstothirdparties
was0.66milliontons–7.24%higherthanlastyear
— VolumessoldonFrench&Spanishmarketswere1.14milliontons,approximately
53%higherthanin2010
— SecuredadditionalfeedstockbasketbysupplyingMTBEandETBEplusBiodiesel
(requireddieselblendingmaterialforEUcountries)
— VolumesforNear-Abroadsubsidiarieswere0.48milliontons–25%abovelastyear’s
supply
Apartfromtradedcrudeoil,totaloilvolumedeliveredbythecompanyinordertoensure
crudeneedsofPetromidiarefinerywas3.63milliontons,withKazMunayGas(KMG)
barrelsshareincreasingfromaround78%in2010toalmost90%in2011.
VectorEnergyAGisthesupplyandtradingsubsidiaryoftheRompetrolGroup,withits
mainofficeinZug(Switzerland).Thecompanycontinuedin2011tooptimizetheoverall
supplychainoftheGroup.Vectorfine-tunedthesynergieswithothercompanieswithin
theKMGGroup,namelyKazMunayGasTradeHouse–themaincrudeoilsupplierfor
Petromidiarefinery,aimingatanimprovedstocklevel.
In2011,thecompanysoldaround23%oftherefinerycarfuelproductiontocompanies
outsidetheGroup,whilearound0.48milliontonnes(17%)wenttoNear-Abroadentities
withintheGroup(toRompetrolBulgaria–124kt;toRompetrolGeorgia–149kt;to
RompetrolUkraine–205kt).ThiswasthedirectresultofincreasedsalesontheRomanian
market(53.6%oftotalcarfuelsales).Basedonimprovedproductqualityandnegotiated
contractualstipulations,profitabilityforsomedestinationsincreasedsignificantly.During
thesameperiod,thecompany’sexportofproductstotheFrench&Spanishmarketswas
1.14milliontonscomparedto0.75milliontonsin2010anincreaseofaround53%,with
dieselremainingmainproduct.
Theresponsibilitiesundertakenbythecompanyin2011arepartofthestrategicplan
ofKMGmother-companytofinalizeintegrationofTRGsustainingforwardmotion
regardlessofdifficultgeneralinternationalclimate.Vectorisinchargeofstream-lining
operationsoffuelsaletowardstheGroupsubsidiaries(Bulgaria,Georgia,Ukraine),
effectiveproductstockmanagementinRefiningandRetailEntities.Inaddition,in
depthmarketresearchhasresultedintoextendingTRGbusinessportofolio,byfinding
aconstantoutletforourgasolineanddieselgrades,whichdonotcomplywithEuro
standards.TheseeffortsresultedinmonthlysalestoLebanonmarketandspotsales
madetonewdestinations(UAE,NorthAfrica,Israel).
Inaddition,Vectorisinvolvedinfinancialriskmanagementactivitiesatgrouplevel.
During2011weexperiencedveryhighvolatilityinoilprices,drivenbyfundamental
factorsinbothofferanddemand.Onthesupplyside,themaindriverwasthefearof
VectorEnergyAG
1,14 milliontonsvolumessoldonFrenchandSpanishmarkets
Trading
23
disruptioninimportantoilproducingregions,whileondemandsidefactorswhich
couldpotentiallyleadtoadeeperrecessionandadecreaseindemand.Insuchan
environment,Vectorplayedanimportantroleinmitigatingcommoditypricevolatility
atgrouplevel,actingasanadvisorandexecutingmostofthetransactions.Derivative
instrumentsusedforcommoditypricevolatilityaremainlyexchangetradedfuture
contractsandliquidOTCswaps.
Vectormonitorsmarketforwardcurvesandexecutesrefinerymarginhedgetransactions
whentargetedlevelsaremet.SuchlevelsareapprovedbyBoardandTopManagement
RiskManagementPoliciesandsetdesiredlevelsofprofitability.
InordertoensurerawmaterialsupplyoftheGroupcompanies,andtheirsalesof
finishedproducts,VectorEnergyoptimizedcompanyheadcountandworkedclosely
withtheShippingandMarineOperationsentities.Theteamcontinuestoberesponsible
fordeveloping/implementingnewprocesses,suchasselectionofoptimumoilmixes,
establishingtargetstocksofrawmaterial/endproducts.
Theachievedoperationalresultisdirectlyaffectedbytheinternationalmarketconditions
andoperatedvolumes,reaching2.1millionUSDin2011.
For2012,VectorEnergywillfocusmainlyoncoveringtheentirefeedstockacquisition
forPetromidiaRefineryestimatedaround4.64milliontons(outofwhich4.4million
tonscrudeoil90%Uralsplus10%sweetcrudeoil).Besidesa16%increaseofprocessed
feedstockversuspreviousyear,thecompletionofrefineryrevampingprojectwillalso
bringasignificantincreaseinwhiteproductsyields(17%forcarfuelscomparedto2011),
morethanhalfofitwillbedirectedtoexportmarkets(0.32milliontonsoutoftotal0.52
milliontonsyieldincrease).
Market context in 2011Ukrainianmotorfuelsmarketin2011wasmarkedbyashareincreaseinimportedmotor
fuels,from39%to60%.
2011 Key AchievementsRompetrolUkrainehascontinueditstradingoperations,importingandsellingproducts
manufacturedbyRompetrolRafinare,mainlyEuroPlusGasolineRON95.InMay2011the
companyswitchedtodeliveryofEURO5productstoUkraine.RompetrolRafinareisthe
biggestRomanianmotorfuelsexportertoUkraine.
— BecomingthefourthlargestimporterofRON95ontheUkrainianmarket.
ThequantityofRON95importedbyUkraineexceeded164KT,thecompany’sshare
representing11.5%ofthetotalvolumesofRON95importedbyUkraine(8%oftotal
RON95consumption);
— RompetrolUkraineinadditiontoRON95,imported1.3%ofRON92and1%ofdiesel
ofthevolumesimportedtoUkraineduring2011;
— Despiteharshbusinessconditions,thecompanyhadasuccessfulfinancialyear.
EBITDAregisteredalevelof7millionUSDandthenetprofitexceeded4millionUSD.
RompetrolUkraine
16% increaseofprocessedfeedstockversuspreviousyear
24 AnnualReport2011
Thetradingactivityhasbeencarriedoutthroughnewlocations:oneBlackSeaterminal
locatedinKherson,oneDanube-riverterminalnearIsmailandthreein-landdepots,two
ofthemlocatedinOdessaregionandoneinVinnitsa.Thefuelwassoldaspreviousyears
oncarrierpaidtoterms,RompetrolUkrainedeliveringbyrailwaytheproducttoclients’
storagefacilities.
In2011thecompanydevelopedFCAsalesloadingproductsatterminalsandwarehouses
ontoclients’trucks.Thetotalquantitysoldamountedto64KT.
2012 Key Objectives
— Identifyingandprovidingneededlogisticinfrastructuretosecurefueldeliveries
tradednationallyandregionally;
— Increasinglogisticchainefficiencyandimplementingnewdeliverymethods;
— Developingnewmarketopportunities,bothforwholesaleandretail.
In2012,RompetrolUkraineaimstofurtherconsolidateitspositionasadistributorof
qualityfuelontheUkrainianmarket,especiallyinimportantcommercialareafrom
theSouthernandSouth-Eastern.Fortheretailsegment,RompetrolUkraineintendsto
implementadevelopmentplanforDOCOandDODOstations.
ByronShippingLtd,theshippingtransportationsubsidiaryofVectorEnergy,continuedin
2011tooptimizetheflowsamongTheRompetrolGroupentitiesandRompetrolRafinare.
StartingasofQ42010,ByronsignedaContractofAffrètementapplicableforAframax
(80kt+10%)sizevesselsinordertosecurefreightcostsforthecrudesupplyfor
PetromidiarefineryandalsotoavoidtheTurkishStraitsdemurragerisk.
Therestofthefixturesweremadefromthespotmarket,whichledtosavingsofapprox.
2.5millionUSDforthecompany.
In2011,SeniorManagementapprovedtheestablishmentofByronShippingRomanian
Branch,allowingByronShippingtointegrateallshippingrelatedservicesandtocreate
synergiesfromBlackSeatotheMediterranean.ThebranchwasestablishedonMarch1st,
2011andthepositiveinfluenceinEBITDAwasregisteredwhentheconsolidation
ofoperationsstarted.
Also,fullimplementationofGroupDemurrageProcedureresultedinanadequateand
moretransparentdemurragesplitamidstGroupCompanies.
TotaldemurragecostsatGroupleveldecreasedbyaround8%comparedto2010,down
from1.6millionUSDto1.47millionUSDin2011.
ByronShippingLtd
-2009 -2010 -2011Sales Rompetrol Ukraine (vol)
0
50
100
150
200
250
201120102009
2,5 millionUSDsavingsforthecompany
Trading
25
MidiaMarineTerminal,initiallyasubsidiaryofVectorEnergyAGbecameasubsidiaryofTheRompetrolGroupinDecember2009aftera
capitalincreaseof20millionUSDoperatedbyTRG.Thecompanywascreatedtoconsolidatetheenergybridge–Easternoilresources
andWesternmarketneeds.Thus,thepresenceofKazMunayGasandRompetrolwithinthegeographicalarchlinkingtheCaspianSeaarea
(Kazakhstan,Georgia),BlackSeaarea(Ukraine,Moldova,Romania,Bulgaria)toWesternEurope(FranceandSpain)supportingthisstrategy.
In2011thecompanycapitalwasincreasedagainby84millionUSD(TRGloancapitalisation).
Inthisrespect,inDecember2008thecompanyhascompletedtheconstructionofanewoff-shoreoilterminalintheBlackSea,11kmfar
fromPetromidiaRefinerycrudeOilTankFarm,operationalasofJanuary2009.Thenewterminalpermittedoilsupplycostreductionsof
approx.USD8/tonnein2009,andofferedthenecessaryframeworkfordevelopingtheRompetrolGrouptradingactivitiesintheregion.
Achievedcostsfor2011crudeoilactivityviaoffshoreterminalwerearoundUSD2.3/tonne.
The main performance indicators achieved in 2011
Off-shore oil terminal (Midia SPM)
TotalqtyofcrudeimportedviaMidiaSPM 3,444kt
TotalqtyofcrudetransferredviaOTC 160kt(duetoSPMhoseschangeout)
TotalnumberoftankerscallingMidiaSPM 43
Operationalcosts 2.28USD/mt
Commerciallosses(B/LversusOUTRep.) 0,07%
TotalsavingbyusingtheSPMsincestartup about25.1millUSD
TimespenttoreceivethecrudedischargedviaSPMinRompetrolcrudeoilstorage 19hours/ship
TimespenttoreceivethecrudedischargedviaOTCinRompetrolcrudeoilstorage 6days/ship
ThecompanyisoperatingtherefineryCrudeOilTankFarmwithadesigncapacityof418,000cbm,netstoragecapacity391,499cbm,
andapumpingtotalvolumeof342,575cbm,receivingcrudemainlyfromMidiaSPM,butalsofromOilTerminalConstantaviaCONPET
anddeliveringtorefinerythetwotypesofcrudeoilaccordingtodailydietrequirements.Entirecrudeoilvolumehandledthroughcrude
oiltankfarmin2011was7.174kt(bothreceiptanddelivery).TheLPGoperationsviaberth9AbeganinDecember2010.
Port terminal (products & gas) EXPORT/IMPORT (Berths 9 A, 9B and 9C)
Totalqtyofproductsexported/imported 1,313kt
Totalnumberoftankerscallingportterminals 328
Operationalcosts 1.41USD/mt
Totalcost 1.49USD/mt
SavingsrecordedbyusingMidiaportterminals
insteadOilTerminalConstanta&railways about11.8millUSD
Port terminal (VGO & COB) EXPORT/IMPORT (Berths 1–4)
Totalqtyofproductsexported/imported 34.149kt
Totalnumberoftankerscallingportterminals 4
MidiaMarineTerminal
26 AnnualReport2011
MMT Services to Non Group entities, 2011MMTisperformingathigh
standardsfollowingservicestoship
owners(nongroupentities):
— Piloting
— Towing(vesselassistance
withtugs)
— Mooring/Unmooringall
foroffshoreandporttanker
manoeuvres,usingown
resourcesonly.
Gross income cashed in by during 2011
Piloting(SPM&Port) 0.671millUSD
Towing(statictowingSPM&port,alltugs) 3.179millUSD
Mooring/Unmooring(SPM&port) 0.282millUSD
Total income from non group entities 4.162 mill USD
MMT Strategic Objectives for 2012
— OPEXoptimization,stayintheapprovedbudged
— CAPEXexecution:constructionofMMTtugfleet
— Consolidatingtheexitingincomesfrom3rdpartynon-groupsources
— DevelopnewbusinessbasedonexistingMMTassets,equipmentsandownHR
RomanianTradingOperationsDivision
MarketIn2011,tradingfocusedonoptimizingtradeflowsofrawmaterialpurchasingand
productsales.Feedstockacquisitionsincreasedbyabout6%andsalesbyaround12%in
2011vs2010.Crudeacquisitionswereexclusivelycarriedoutbythegrouptrader,Vector
Energy,whotookoverthemostpartofgasolineanddieselvolumessoldonforeign
markets.
ThequalityofproductssoldbyRompetrolmettherequirementsandstandardsfor
qualityandenvironmentinforcewithinEuropeanUnionandledtoastrongerpositionof
thecompanyontheinternationaloilmarkets.BeginningJanuary,1stgasolineanddiesel
havebeensoldwith5%biofuels,asper2003/30EUDirective.
-2010 -2011
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
DecNovOctSepAugJulJunMayAprMarFebJan
Sales 2011 vs. 2010 (tons)
Trading
27
28 AnnualReport2011
In2011,theshareofdomesticmarketintotalPetromidiasaleswashigher(60%)
thanofexternalmarket.Morethanhalfoftotalmotorfuels(about53%)weresoldon
domesticmarket.
-Domestic -Export
Domestic vs. Export sales in 2011 (tons)
0
50,000
100,000
150,000
200,000
250,000
DecNovOctSepAugJulJunMayAprMarFebJan
-Near abroad -Trading
Near abroad vs. Trading (tons)
0
200,000
400,000
600,000
800,000
1,000,000
DieselGasolines
-ICS -Export
ICS vs. Export (tons)
0
200,000
400,000
600,000
800,000
1,000,000
DieselGasolines
60% shareofdomesticmarketinPetromidiasales
Ontheexternalmarkets,salesweredistributedbothonEUmarketsandnonEUmarkets.
SalesofPetromidiaproductsonEUmarketsrepresentedabout25%oftotalsales,therest
of75%beingsalesonnonEUmarkets.
Almost80%ofexternalsalesfromPetromidiarefineryhaddestinationsonneighboring
markets.Detailedoncountriesandproducts,saleshadfollowingdestinations:
Gasoline Ukraine,Georgia,Turkey,Lebanon,Bulgaria,Tunisia
Diesel Bulgaria,Serbia,Georgia,Turkey,Moldova,Ukraine
Petcoke Ukraine,Greece,Turkey,Serbia
Sulphur Egypt,Ukraine,Greece
SalestoRompetrolbrancheslocated
abroad(Moldova,Bulgaria,Georgia,
Ukraine)representedabout46%oftotal
externalsales.
Trading
29
Naphthagasoline,oneofthemainproductsobtainedinVegarefinery,constituted34%
fromtotalvolumeofsoldproducts.
Detailed on countries and products, sales had following destinations:
UE Non-UE
Naphthagasoline Hungary Serbia
Hexane Bulgaria,Poland,Austria India,Turkey,Ukraine,Korea
Ecologicalsolvents Germany,Poland Moldova,Ukraine
Fueloil Bulgaria –
Fuelsfordomesticuse Bulgaria Moldova
Thetargetistomaintaintheexistingdestinationsandenteronnewmarkets.
Petromidia’smaindomesticcustomerswere:RompetrolDownstream,
RompetrolGasS.R.L.,RompetrolPetrochemicals,AirBPSales,AirTotalRomânia.Main
externalcustomerswere:VectorEnergy,RompetrolMoldova,RompetrolBulgaria,Calvi
TradeLimited,TransamoniaSwitzerland,Steuerman.
Vegasalesduring2011werearound0.3milliontonessameas2010outofwhich
0.27milliontonsfinishedproducts.
Splitbymaindistributionchannels,internalsaleswere35%oftotalsalesvolume,while
therestwenttoexportmarketssimilartolastyear.
Forecast and developments trends in 2012
Sales structureby product group
(%)
Other solvents34
Fuels for domestic use6
Petrol & white spirit7
Fuel Oil14
Bitumen18
Ecological solvents8
Hexane14
Internal35
Export65
Sales structureby channel
(%)
30 AnnualReport2011
-Domestic -Export
Sales by main destination (tons)
0.00
3,000.00
6,000.00
9,000.00
12,000.00
15,000.00
DecNovOctSepAugJulJunMayAprMarFebJan
RompetrolPetrochemicalsistheonlyPolyPropylene(PP)andPolyEthylene(PE)
producerinRomania.In2011,theRomanianmarketsharewas50.19%forPP,23.18%for
LDPE,9.12%forHDPE.Totalsales’volumein2011was0.2milliontons.
ThedevelopmentstrategyofRompetrolPetrochemicalstopromoteaculturebasedon
customersatisfaction,insuresacompetitivepositionbothontheinternalandonthe
regionalmarkets(BlackSeaarea,MediterraneanSeaarea,CentralandEasternEurope)
whereRompetrolPetrochemicalshasbecomeanimportantpresence.
Oneofthemaincompetitiveadvantagesistheaccesstoalltypesoftransport(by
rail,road,sea),facilitatingnewdestinationsintheBalkanarea(Macedonia),Asiaand,
occasionally,theMiddleEast,butalsostrengtheningourpositionintheregionalmarket
(Bulgaria,Serbia,Italy,Greece,Poland,Turkey).
Tradingoperationsrepresentadifferentbranchofouractivity.In2011,thecompany
achieveda12%shareonRomanianmarketforPET,inanenvironmentcharacterizedby
fiercercompetitioneachyear.
RomanianCommercialDivisionforPetrochemicalProducts
50.19%PP
23.18%LDPE
91.2%HDPE
MarketshareinRomania
Trading
31
-PP -LDPE -HDPE -LLDPE imp -HDPE imp -PET
Monthly sales by product type (tons)
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
DecNovOctSepAugJulJunMayAprMarFebJan
Besidesourownproduction,thecompanyrunsasustainedactivityofmarketingfora
widerangeofproducts,whicharenotcurrentlyproducedinRompetrolPetrochemicals
facilities,butwithastrongdemandonthedomesticmarket.Thesearespecialty
productssuchas:polypropylenespecialgrades,highdensitypolyethylene(HDPE)pipe
grades,linearlowdensitypolyethylene(LLDPE)andPET.
-Own Production -Trading
Sales volumes (tons)
0.00
50,000.00
100,000.00
150,000.00
200,000.00
20092008 2010 2011
Strategic Objectives
— PP:toreacha55%marketshareinRomania
— LDPE:toreacha25%marketshareinRomania
— HDPE:toreacha20%marketshareinRomania
— Developmentofnewgrades,foraddedvalueapplicationssuchas:polyethylene
pressurepipes,verythinfilm,blowmouldingoflargecanisters,cablecoating.
— Developmentofdirectsaleschannels,targetingend-usersontheexportmarkets.
Commercial Strategy for 2012StrengtheningourpositiononthedomesticandBalkanmarketisadriverforour
commercialteam,maintainingourflexibility.
0.2 milliontonstotalsales’volumein2011
32 AnnualReport2011
TheRompetrolGrouphasretailoperationsin6European
countries,linkinganetworkof1,000fueldistributionpoint,
spreadfromWesterntoEasternEurope.
—RompetrolDownstream
—DyneffFranceandSpain
—RompetrolBulgaria
—RompetrolMoldova
—RompetrolGeorgia
—RompetrolGas
Retail
Retail
expansion
34 AnnualReport2011
Evolution of the Romanian fuel market and Rompetrol Downstream achievements in 2011 FuelconsumptioninRomaniahasbeenrelativelystableinthepastyears,ranging
between5.8and5.9milliontonsannually.Table1belowprovidestheevolutionofthe
Romanianfuelmarketandexpectationsfor2012.Itshowsthatretailfuelconsumption,
representingsalesthroughgasstations,isstillthemainsegmentofthemarket,butits
marketshareinthetotalconsumptionhasdeclined,reaching71%in2011,significantly
belowthelevelrecordedin2009.
Conversely,thewholesaletoconsumer(W2C)segmentofthefuelmarket,representing
bulksalesoffuelfromdepotsbyend-consumers,hascontinuedtogrowsignificantly
in2011,reachingnearly30%ofthefuelmarket.Thisincreaseispartiallyexplained
byamigrationoffleetsfromthegasstationstointernalbases,whichensuresbetter
monitoringoffuelusage,naturallyduringthesedifficulteconomictimes,andbysome
economicrecoveryinareassuchasindustrialproductionandconstructions(in2011,
Romanianrealgrossdomesticproduct–GDP–hasincreasedby2.5%vs.2010).
TheevolutionoftheW2Csegmentin2011istheresultofanexceptionalagricultural
season,whichledtohigherfuelusage.
Table1Aalsoindicateshowconsumptionbytypeoffuelhasevolvedbetween
2009–2012.
Dieselconsumptionhasexpandedbynearly6%in2011toreachthreequartersof
thefuelmarket,mainlyasaresultofthefactorsindicatedbefore,whilegasoline
consumptionhascollapsed,whichisexplainedmainlybyindividualconsumerslimiting
theirretailfuelpurchases.Infact,intherecentpasttherehasbeenacleartendencyto
switchfromgasolinetodieselusageasthenumberofdieselvehicleshasconstantly
increased,whilethoseusinggasolinehasstalled.
RompetrolDownstream
2.5% increasedsalesofGDP
TABLE1−A
Romanian fuel market evolution, 2009–2011, and expectations for 2012
Year
Fuel market Retail segment W2C segment Diesel Gasoline
Size (kt) Change vs. LY
Sales (kt)
Share in mkt.
Change vs. LY
Sales (kt)
Share in mkt.
Change vs. LY
Sales (kt)
Share in mkt.
Change vs. LY
Sales (kt)
Share in mkt.
Change vs. LY
2009 5,858 0.0% 4,595 78.0% -2.0% 1,263 22.0% 8.1% 4,067 69.0% 0.4% 1,791 31.0% -0.9%
2010 5,866 0.1% 4,384 75.0% -4.6% 1,482 25.0% 17.3% 4,185 71.0% 2.9% 1,681 29.0% -6.2%
2011 5,901 0.6% 4,210 71.0% -4.0% 1,691 28.7% 14.1% 4,428 75.0% 5.8% 1,473 25.0% -12.4%
2012 5,940 0.7% 4,110 69.2% -2.4% 1,810 30.5% 7.0% 4,475 75.3% 1.1% 1,465 24.7% -0.5%
MarketsizeiscomputedbasedondataprovidedbytheNationalInstituteofStatisticsandtheCustomsAuthority.RetailsegmentisdeterminedbasedondatafromtheRomanianOilAssociationandoninternalestimatesofthewhitestationsegment.
Retail
35
ThefuelconsumptioninRomaniaisestimatedtoincreasetoabout6milliontonsin2012.
Theseexpectationstakeintoconsiderationprospectsofeconomicdevelopment(IMF’s
currentforecastisfora1.7%increaseingrossdomesticproductin2012,wellabovethe
region’saverage).
Theretailsegmentisstillexpectedtoslightlydecreasecomparedto2011andtheW2C
segmenttocontinueitsexpansion,butatamuchslowerpacecomparedtoprevious
years.Byfueltype,dieselisexpectedtoremainatabout75%ofmarket,whichimpliesa
smallfurtherincreasecomparedto2011.
Evolution of Rompetrol Downstream market shares in 2009−2011 and expectations for 2012RompetrolDownstream’stotalmarketshare(MS),whichtakesintoaccountallcompany’s
salesinRomania,hascontinuedtoincreasein2011,aquarterofthefuelconsumedon
thelocalmarketbeingproducedbyRompetrol(seetable3).Thecompanyshareonthe
retailsegmentofthemarkethasalsoincreasedfrom15.9%in2010to16.5%in2011.Our
expectationfor2012istoincreaseboththetotalmarketshareandretailmarketshare.
TABLE2
Evolution of number of vehicles by fuel type, 2009−2011
YearDiesel Gasoline
No. of vehicles Change vs. LY No. of vehicles Change vs. LY
2009 1,844,084 7.2% 3,239,677 3.7%
2010 1,944,333 5.4% 3,221,317 -0.6%
2011 2,029,328 4.4% 3,182,869 -1.2%
SOURCE:OfficialdataoftheMinistryofAdministrationandInterior
TABLE3
Evolution of Rompetrol market shares 2009−2011
Year Total Market Share Retail Market Share
2009 23.70% 16.0%
2010 24.30% 15.9%
2011 24.90% 16.5%
-Diesel -Gasoline
Sales by product type (tons)
2009 2010 2011 2012
0
500,000
1,000,000
1,500,000
2,000,000
6 milliontonsestimatedfuelconsumptionin2012
36 AnnualReport2011
37
38 AnnualReport2011
over760 fueldistributionpoints
attheendof2011
Retail
TheincreaseofretailMSin2011istheresultofbothhigherFill&GoBusinessCard*
sales(non-cash)andNonCardsales(cash).ThehigherretailMScomesalsofroma
consolidationoftheRompetrolPartnerchannel,from4.8%in2010to5.6%in2011,due
toagroupofabout10Partnerstationswhichhaveenteredthefranchiseattheveryend
of2010.ThesePartnerstationsarecomprisedofsiteslocatedonhightrafficroutes,thus
recordinggoodFill&GoBusinesscardsales.Consequently,RompetrolPartnercardsales
hasincreasedfrom5.5%in2010to6.2%in2011,whilethesameindicatorhasremained
stationaryforownstations.
However,ifweconsidercashsales,the2011evolutionisdifferent:throughRompetrol
Downstreamgasstation,ithasincreasedfrom5.8%in2010to6.1%in2011,whichis
notableifweconsiderthetough2011environment,withcost-consciouscustomers
lookingforcheaperfuelalternatives(switchfrompremiumtoeconomyfuelsand
networks),whilethroughRompetrolPartnerchannel,ithasremainedrelativelystable.
Attheendof2011,RompetrolDownstreamoperatedinRomaniaanationalnetworkof
over760fueldistributionpoints(Rompetrolstations,Partnerstations,RompetrolExpres,
InternalBasesof9and20cm).
Inordertoreachthetargetedmarketsharewillfocusontheloyaltyofthecustomersand
increaseourcurrentcustomerportfolio.NewlocationsforRompetrolDownstreamgas
stationsarealsoidentifiedandevaluatedandnewpartnershipsaretakenintoaccount.
* Fill&Go service platform is the first payment service at pump offered only by Rompetrol. Fill&Go addresses
both individual customers through the Fill&Go personal and business customers through the Fill&Go
Business.
Fill&Go Personal – an innovation in Romania – is a modern service that offers the possibility to pay the fuel
directly to pump and purchase products from the store, invoiced at the end of the month.
Fill&Go Business – a service to companies that allows effective control of commercial auto fleet activity and
a significant costs reduction.
-2009 -2010 -2011 -2012
Stations, end of period (no)
0
50
100
150
200
CuvesInternal BasesExpressDODOCOCO
39
General market description and Dyneff France and Spain evolutionIn2011,theFrenchmarketcontinuedtobeinfluencedbytheunfavorableeconomic
conditions,thustheoilproductsdeliveriesdeclinedby-1.2%incomparisonwith77,820
ktonsregisteredin2010.
Regardingproductssold(Diesel,Gasoline,HeatingOil),theFrenchmarketdeclined
by-2.3%,to53,462ktons,asfollows:
— Diesel+5.6%(35,494ktons),whereof1,411tonsofnon-roaddiesel,whichwas
progressivelyimposedtoreplaceHeatingOilformotoruses(construction,
agriculture).
— Gasoline-5%(7,804ktons)
— HeatingOilmarketdeclinedby-21%(10,164ktons).Halfofthissignificantdropisdue
totheintroductionofnon-roaddieselmentionedabove.
The main events which contributed to this decline are:Regulatory constraints
Frenchgovernmentimposedanewproductcalled“non-roaddiesel”toreplaceHeating
Oil.AfirststeptookplaceinMay2011whichmainlyaffectedconstructionbusiness.Then,
inNovember2011,non-roaddieselbecamemandatoryforAgriculturalenginesalso.
Significant climate change
2011wasthewarmeryearinFrancesince1900whichenforcedHeatingOil
market’sdecline.
Changes in competition tactics
AfterTOTAL‘sshuttingdownrefiningoperationsinDunkerquein2010,thecrisis
affectingFrenchRefineriesexpandedin2011,3additionalrefineriesannouncedtheywill
stoptheiractivities(Petroplus-ReichstettinNorth-east,LyondellBasell-CDHintheSouth
andPetroplus-Petit-CouronneintheNorth-west).Duringthelastyears,Spanishrefineries
mademajorinvestmentsinordertoincreasetheirproductioncapacityofdiesel.Inthe
meanwhiletheSpanishmarketdecreasedinasignificantway(-16%vs2007).Thisleaded
tomoretensionsonthemarketwithlowermargins.
Increaseofoilandoilproductsquotations,between15%forGasolineand28%
forDieselinFrance.
DyneffFranceandSpain
15%
28%
increaseofoilquotationsforGasoline
increaseofoilquotationsforDiesel
-Diesel -Gasoline -LPG -Heating Oil
Sales Dyneff France by product type (tons)
TABLE 1
2007 2008 2009 2010 2011
0
500,000
1,000,000
1,500,000
2,000,000
40 AnnualReport2011
ThevolumeofproductssoldbyDyneffFrance(diesel,gasoline,LPGandheatingoil)
decreasedin2011to1,7milliontonscomparedto2010when1,8milliontonswere
registered,thehighestvolumeduringthelast5years.Outofthetotalamount,Diesel
salesrepresented1,2milliontonsandthemainsellingchannelwaswholesale,aprox.
1milliontons.(table2)
Basedonthemarketcharacteristicsandthevolumessold,theshareofDyneffFrance
was3,23%,lowerthanin2010of3,31%.
TheSpanishMarkethasdecreasedby-6.5%in2011and-16,2%from2007to2011in
extremelydifficulteconomicalcontextinSpain.
DyneffSpainregisteredadecreaseinthevolumesofproductssold,toaprox.357ktons
in2011(table1),mainlythroughwholesale–aprox.272ktons(table2).Thischangeinthe
marketdemandwasbasedoneconomicalfactors,thedeclineoftheconstructionsector
andalsotheconsumptionlevelduetoeconomiccrisis.
-Diesel -Gasoline -Heating Oil
Sales Dyneff Spain by product type (tons)
TABLE 1
2007 2008 2009 2010 2011
0
100,000
200,000
300,000
400,000
500,000
-Retail -Detail -Trading -Wholesale
Sales Dyneff Spain by channel (tons)
TABLE 2
2007 2008 2009 2010 2011
0
100,000
200,000
300,000
400,000
500,000
-Retail -Detail -Trading -Wholesale
Sales Dyneff France by channel (tons)
TABLE 2
2007 2008 2009 2010 2011
0
500,000
1,000,000
1,500,000
2,000,000
357 ktonsdecreaseinthevolumesofproductssold
DyneffSpain’smarketshare
decreasedby-3%between2010and
2011,to1,02%.
Retail
41
Key achievements in 2011Consolidation of current businesses and development of on-going projects
During2011,DyneffconsolidateditsDyneffandRompetrolfueldistributionnetworkin
France,bycollaborationswithtraditionalpartners,butalsobytheextensionofFill&Go
serviceorHeirestaurantconceptandBriocheDorée.
DyneffFrancehasopenedanewRompetrolfuelstationonA10highway,connecting
BordeauxandParis,atabout320kilometresfromParis.
Byintegratinganefficientmanagementofenergyandwaterconsumptionorfor
wastemanagement,thenewstationcomplieswiththenewsustainabledevelopment
principlesandthoseofenergyefficiency.
New products
DyneffFrancesuccessfullylaunchednon-roaddiesel(NRD).Itsmarketshareincreasedto
5.7%andthisresultwasduetoitscustomer-orientedapproachwhichledtoofferabio
freeNRD.Thisproductisrepresentingmorethan20%ofDyneff’sNRDsalestoday.
Marketing Projects
DyneffFrancecontinueditsE85-SuperthanolsalesbyinvestinginitsGasStations
network.Thisprogramwillcontinuein2012.
Attheendof2011,DyneffoperatedinFranceandSpainafueldistributionnetwork
composedof128stations,ofwhich9Rompetrolstations,locatedespeciallyon
highways,nearlocalitiessuchasArzens,SaintEtienne,PeypinorLesHerbiers.
Key directions for 2012–2013
TwomajorprojectsforthedevelopmentofDyneffFrance:
— TheupgradeofanewmajordepotinPortlaNouvelleina50/50joint-venturewith
TotalGroup.
— TheconstructionoftwonewmotorwayGasStationneartheSpanishborder(“Village
Catalan”project).
— ThecompanywillalsorentnewstoragecapacitiesinNorth-WestofFrancetoallow
BiofuelblendingforproductssoldinParisarea.
— RegardingDyneffSpain,theobjectiveistoconsolidatethedevelopmentonretailand
detailbasedonwiththeexistingassets.Thesetwochannelsmustprogressivelyturn
tobethemainchannelsofactivity,beforewholesale,whichregisterlowermargins.
Wholesalemustconsolidateitsvolumesbutonalong-termstrategyitwouldbe
awaytomoveimportantvolumesandthereforetogetcompetitivepurchaseand
logisticprices.
WithheadofficesinMontpellier,Dyneffdeliverseachyearover2.6millioncubic
metersofoilproducts,throughits3majordistributionchannels,Gasstations,
9retailand2wholesaleagencies,itsstoragecapacitybeingofabout400,000cubic
meters.Theseoperationsarecarriedoutthrough3ownterminalsinPortlaNouvelle
andSaint-Gaudenslocalities,throughMarseilleandLyonterminals–whereitis
ashareholderaswell,andthroughother15locationsrentedinFranceandSpain
(2inBarcelonaand2inBilboa).
128
NRD
stationsinFranceandSpain
(non-roaddiesel)newproduct
42 AnnualReport2011
General market condition and Rompetrol Bulgaria achievements in 2011Theyear2011wasayearofoperationalimprovementandbetterbrandrecognitionfor
RompetrolBulgaria.Despiteawellbalanced(intermsofsupplyanddemand)market,the
economicturmoilinfluencingthelocalindustryhadseriousimpactonthefuelsector.
Therewerenosignificantchangesinthestructureofthemarketregardingthemajor
competitors.Theplansofanothercompetitor(Gazprom)toenterthemarketareputting
pressureonthemarket.
RompetrolBulgariafocusedonatwo-prongedstrategyofprofitabilityimprovement
andcostcontrolinordertoadequatelyfacethechallengesofthemarket.Improved
performancemanagementandprudentsiteevaluationinvigoratedtheRetailNetwork
andcausedorganicgrowthintheexistingpointsofsalestructure.FollowingtheCAPEX
strategy,new7stationswerecommissioned,thusthenetworkofRompetrolBulgaria
included73distributionpointsattheendof2011.
RompetrolBulgariaregistereda15%increaseofthemarketshare,to8%,whilethetotal
marketsizedecreasedwith1%(2,580,000tons).
Theoptimizednetworkmanagementandmarketinghavebroughta14%growth
inoverallRetailsalesand16%increaseinRompetrolownedstations,thehighest
profitabilitychannel.In2011allretailpointsofsalehaveregisteredanincreaseinaverage
dailysales.
RompetrolBulgaria
-COCO -DODO -Internal BasesStations, end of period (no)
201120102009
01020304050607080
-Market size (tons) -Market share (direct&indirect)
2009 2010 2011
2,500,000
2,520,000
2,540,000
2,560,000
2,580,000
2,600,000
2,620,000 9,00%
8,00%7,00%
6,00%5,00%4,00%3,00%
2,00%1,00%0,00%
-2009 -2010 -2011
Retail Sales (tons)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
DODO for retailCOCO F&GCOCO cash
Retail
43
Anothermajoreventinretailsectorin2011wasthesuccessfulfinalizationoftheDealer
Partnershipbusinessmodel(Companyowned,Dealeroperated)startedinthefourth
quarterof2010.Therelatedsitemanagementandqualityofserviceimprovements
increasedsufficientlytheefficiencyofthechannelandthevaluegeneratedforthe
customers.Thisprojectalsoaidedtheconsiderablecostsavingswithover1.2million
USDonlyintheretailnetwork.
PortfoliooptimizationcontinuedinWholesaleChannelswithextensiveclientprofitability
managementandtheapplicationofamarkettailoredCommercialPolicy.Asaresult,
theavailablefuelvolumesweredistributedthroughsaleschannelsbasedonprofit
optimizationpriorities.Thesalesinthemostprofitablechannelincreasedwith20%
comparedto2010.Thisincreasewasgreatlysupportedbythebroadenedportfolioof
wholesaleclients.
-2009 -2010 -2011
Wholesale Sales (tons)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Wholesale to resellerWholesale to consumerTradingInternal bases
1.2 millionUSDcostsavingsintheretailnetwork
Theotherstrategicdirectionstartedin2010waseffectiveCostManagement.
Thecombinationofimprovedcostplanning,procurement,andprojectmanagement
wereamongthemostimportantinitiativesthatrealizedsavingsinoperatingexpenses.
Theestimatedeffectoftheseinitiativesin2011is5%overallcostreductionand
increasingprocessquality.
Oneofthemainachievementsfor2011wastheOutsourcingOptimizationofSecondary
Logistics.RompetrolBulgaria’sownfleetwasgivenformanagementtoanoutsideparty
highlyspecializedinlogisticsservices.Thisprojectbroughtprocessoptimization–
improvedDSOandcostperunittransportedindicators.
Anothersubstantialachievementfor2011wasthatRompetrolBulgariawascertified
underISO9001:2008,ISO14001:2004andOHSAS18001:2007andanIntegrated
ManagementSystemwasestablished.Priortothecertificationallrequirementsfor
implementationandsustainingofeffectiveSystemforEnvironmentalProtection,
OccupationalHealthandSafetyweredevelopedanddocumented.Thesecertificates
correspondwiththeconstantstriveofRompetrolBulgariaforimprovedoccupational
healthconditions,environmentalprotectionandprocessoptimization.
Key directions for 2012
— Openatleast4newgasstations
— ImplementTLGproject(tanklevelinggauge)tocomplywithgovernmentregulations
— UpgradeRuseDepotforbettersupplyflexibility
— Increaseretailvolumeswithminimumof18%,volumestoconsumerswith39%
— ContinuousImprovementsinPortfolioandNetworkmanagement
4newgasstationtobeopenedin2012
44 AnnualReport2011
RompetrolMoldovaimplementedasignificantdevelopmentofthegasstationnetwork
in2011,duetotheopportunitiesappearedonthemarket.
Attheendof2011RompetrolMoldovaoperated45fillingstations(ofwhich16hadalso
LPGproduct),fromanetworkof30fillingstationsatthebeginningoftheyear.
ThisnetworkincreaseispartofapartnershipbetweenRompetrolMoldovaandprivate
owners,abusinessmodelbasedonprofitshareforbothparties.
AsaresultofRompetrolMoldovanetworkincrease,thetotalvolumessoldin2011on
retailwereofapprox.33ktons,44%morethanin2010,whileonwholesalethevolumes
soldwere32,7ktons,adecreaseof24%thanthepreviousyear.
General market overview and Rompetrol Moldova achievements in 2011In2011,23tradersoperatedonMoldova
marketunderthelicenseofimportand
wholesaletradeofoil.OnLPGmarketthere
were10tradersoperatingunderthelicense
ofimportandwholesaletradeofLPG.
Regardingtheretailsector,141ownersof
licensesoperatedtradeactivityofgasoline,
dieselandLPG.Gasolineanddieselwassold
through586gasstationsandLPGthrough
370stations.
RompetrolMoldova
Retail market share according to imports and network coverage, 2011
Marketshare Gasoline Diesel LPG Total(miitone)
Marketshare2011
NetworkShare NetworkCoverage
Efficiency
Rompetrol 16.46 40.06 3.75 60.27 9.65% 7.68% 57.89% 126%
Bemol 8.88 19.35 – 28.22 4.52% 8.87% 55.26% 51%
Petrom 52.88 24.04 – 76.93 12.31% 17.06% 78.95% 72%
Lukoil 64.66 119.52 20.85 205.02 32.82% 17.41% 84.21% 189%
TirexPetrol 26.44 71.78 3.98 102.20 16.36% 16.55% 84.21% 99%
Others 23.68 78.85 49.52 152.05 24.34% 32.00% – 76%
Total market 193.00 353.60 78.10 624.70 100% – 38 –
AccordingtoANREreport:R.Moldova Oil Market overview, 12 months 2011
Total number of gas stations
Rompetrol 45
Lukoil 102
Petrom 100
Bemol 52
TirexPetrol 97
Valiexchimp 19
BasaPetrol 12
ParstarPetrol 8
Others 151
Retail
45
Allthefuels,whichRompetrolMoldovaissellingthroughthenetwork,areimported
exclusivelyfromPetromidiaRefinery:
— Alto101Gasoline(sinceFebruary2009)
— Premium95Gasoline
— Alto55(sinceDecember2010)
— Euro5Diesel
— Premium95EFIXGasoline(sinceMay2008)
— Euro5EFIXDiesel(sinceMay2008)
— LPG
-Sales 2010 -Sales 2011 -Change 2010 -Change 2011
Evolution of Rompetrol Moldova sales 2011 vs. 2010 (tons)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
DecNovOctSepAugJulJunMayAprMarFebJan
0.0%8.5%
19.6%24.1%
3.6%11.4%
24.9%
8.2%
-3.0%4.4% -2.6%
-5.4%0.0%
-7.1%
12.8%13.6%
5.2%
-1.2%
-11.7%
40.0%
-4.6%
11.7%
-5.0%
1.6%
-Total -Diesel E�x -Gasoline 95 E�x -Diesel Euro 5 -Gasoline Premium 95 -LPG -Super ALTO 101-Diesel Alto 55
Retail sales evolution in 2011 (tons)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
200
400
600
800
1,000
1,200
DecNovOctSepAugJulJunMayAprMarFebJan
813
420362
322120
29
19 17 16 15 8 8 8 12 11 12 15 21
26 30 30 34 31 26 36 35 37 32 32129 153
202 183 204 178269 269
216 203 221
383361
306
425491
352
478
599
444
459
688
471
448
624
458548
750
566
393
529
411 533
733
540575
863
588
530
843
538
558
775
547
730 747 776 807
866
779
11061026
11441094 1166
Atthebeginningof2011yearRompetrolMoldovamergedwithMoldintergaz(MIG)
companyandasaconsequencereceivedMIG’sassets,whichmeansoneLPGDepotin
Tirnovaand5LPGStations,inNorthernpartofMoldova.
Key directions for 2012RompetrolMoldovawillcontinuethedevelopmentoftheretailnetwork,uptoanumber
of52gasstationsin2012.Thesecondpartofthisstrategyreferstoanoptimization
processtorenderfullefficiency.
46 AnnualReport2011
General market overview and Rompetrol Georgia achievements in 2011RompetrolGeorgiahaspositioned
onthemarketasaEuropeanHigh
qualityoildistributor.In2011,
RompetrolGeorgiahadamarket
shareof18,39%,outofa820ktonsof
fuelsoldonthelocalmarketin2011.
Accordingtotheimportedquantity,RompetrolGeorgiaisonthe3rdposition,having
upto18.4%ofthetotalimportsonthelocalmarketoutofwhich60%isusedforretail
networkandtherest40%forthewholesale.
ThetotalquantityoffuelssoldbyRompetrolGeorgiain2011wasaprox.150ktons,a7.5%
increasetowards2010.
Thesalesofgasolineincreasedby4%in2011,whilethedieselby13%.
RompetrolGeorgiarankedthe3rdonretailmarket,having15%ofsales.Attheendof
2011,thecompanyoperated73pointsoffueldistribution,comparingto63in2010.
RompetrolGeorgia
-Market size (tons) -Market share (direct&indirect)
2010 2011 2012
780,000
790,000
800,000
810,000
820,000
830,000
840,000 19,50%
19,00%
18,50%
18,00%
17,50%
17,00%
Retail Sales 2011(%)
Lukoil15
Lukoil21.4
Rompetrol15
Rompetrol18.4
Others5
Gulf&Others2.9
Socar25
Wissol29
Wissol7.4
Gulf11
Socar49.9
Imports 2011(%)
Retail Sales 2011(%)
Lukoil15
Lukoil21.4
Rompetrol15
Rompetrol18.4
Others5
Gulf&Others2.9
Socar25
Wissol29
Wissol7.4
Gulf11
Socar49.9
Imports 2011(%)
3rd positionontheretailmarket
Retail
47
Major achievements in 2011Inyear2011RompetrolGeorgiahasstartedimplementationofseveralprojects,namely:
— Investingincompany’sownsassets,meaningimplementingcapitalmaintenance
projectforseveralstationrebranding;
— Attheendofyear2011wasactivelyinvolvedinERPsystemimplementationprocess;
plannedtofinalizein2012;
— Enterpriseresourceplanning(ERP)systemsintegrateinternalandexternal
managementinformationacrossanentireorganization,embracingfinance/
accounting,manufacturing,salesandservice,customerrelationshipmanagement,
etc.ERPsystemsautomatethisactivitywithanintegratedsoftwareapplication.
Theirpurposeistofacilitatetheflowofinformationbetweenallbusinessfunctions
insidetheboundariesoftheorganizationandmanagetheconnectionstooutside
stakeholders;
— StartimplementationofVTmoduleproject,whichwillenablethecompanyto
automatecouponbar-codereadingprocess.
In2011RompetrolGeorgiawasawardedbyGHNnewsagencyforbeingthemoststable
foreigncompanyinGeorgia.
Expectations for 2012 and the upcoming years
— Currently,severalRompetrolGeorgiastationsneedsignificantmaintenanceworkings
inordertoupgradethegeneralstandards.Forthispurpose,24stationsareincluded
intheproject,outofwhich6willbedonebyJuly,andtherestbytheendoftheyear;
— RompetrolGeorgiaisplanningarebrandingprojecton13stationsduringtheyear.
5stationbrandreplacementprocesswillbeaccomplishedbyJuly,andtherest8by
theendoftheyear;
— UntilJune2012implementationof6stationORPAKrolloutisinorder.Asaresultonly
fivestationswillremainun-automated;
— Attheendoffirsthalfoftheyear,RompetrolGeorgiaisplanningtoaccomplish
NavisionandVTmoduleprojectswhichwerestartedin2011.
-Diesel -Gasoline
Sales by product type (tons)
2010 2011 2012
0
200,000
300,000
100,000
24
13
gasstationstobeupgraded
gasstationstoberebranded
48 AnnualReport2011
General market overview and Rompetrol Gas achievements in 2011In2011thetotalLPGconsumptioninRomaniahasincreasedby2%,upto460ktons,
outofwhich29%wereconsumedintheretailsegment,whilethewholesalesegment
represented71%ofthetotalconsumption.
Thesegmentofcylindersdecreasedby7%,to205ktons,whiletheautogasincreasedby
12%to208ktons.
RompetrolGasmarketshareinthetotalLPGmarketreached19%in2011,withanetwork
including250autoLPGdistributionstations,8,000cylinderdistributionpoints,aswell
as3LPGbottlingfacilities(Constanta,AradandBacau).ThetotalvolumeofLPGsoldby
RompetrolGasincreasedby4%in2011,to274ktons:theretailsalesrepresented0,32%
(88ktons),wholesale0,33%(91ktons)andexport0,35%(95ktons).
Theexportedvolumesrepresent25%ofthecompanyturnoverandweredelivered
mainlytoBulgaria,Serbia,Macedonia,Albania,Maroc,TunisiaandCroatia.
RompetrolGas
-CYLINDERS, kmt -ATG, kmt -PROPANE, kmt
20092008 2010 2011
0
100
200
150
50
300
250
400
350
500
489
468
450
460
450
420
450
440
430
470
460
480
500
490
-Retail -Wholesale -Export
Channel Structure (%)
20092008 2010 2011
01020304050607080
Retail
250 autoLPGdistributionstations
49
Salesonretailandwholesaledecreasedin2011by1%,to179ktons,outofthesethesales
ofcylindersdecreasedby17%,whiletheautogasincreasedby20%duetohighprice
increaseofwetfuels
Changes in competition tacticsDuring2011,thedemandfornewcylindersincreasedsignificantly;thereareregions
inRomaniawheretheproductissoldexclusivelyinnewcylindersandtherestofthe
countrytheoldcylindersarelosinggrounddaybyday.Thus,themainRGScompetitors
oncylindersmarkethavedevelopedintensiveprogramsforrenewthecylinderspool
andbecomeveryaggressiveonthemarket.
Key achievements in 2011RompetrolGasmanagedtoincreasethevolumessoldin2011,thusconsolidatingits
positiononRomanianLPGmarket,beingthe2ndmajorplayerandtheleaderonAutogas
market.
Awell-balancedchannelssalesstructurepermittedtobeflexibleonLPGdynamic
markets–localandregionalBlackSeamarkets–andtoobtainthemaximumadded
valueamonganysaleschannel.
Ontheretailsegment,RompetrolGasmaintainedin2011thelevelofsoldvolumes
versuspreviousyear.
Key directions for 2012
— Optimizationofsupplychain,includingupgradeofPantelimonstorageuntilJune
2012inordertopermitthesupplybytrainwagonsinsteadofsupplybytrucks,
meaningatransportationcostdecreaseby30%
— Decreaseoperationscostspertonebyincreasingsoldvolumesthroughimportsand
salesoptimizationamongsaleschannels
— Maintainexistingmarketshareonretailchannels
-CYLINDERS -ATG -PROPANE
Retail channels. Market share evolution (%)
20092008 2010 2011
0
5
10
15
20
25
30
2nd majorplayeronRomanianLPGmarket
50 AnnualReport2011
Thisbusinessunitcoversallthenon-groupactivities
ofRompetrol.Itemphasizesonimprovingouroperations,
bybringingaddedvaluethroughadditionaloperations
suchasE&PorEPCM.
BusinessDevelopment&IndustrialServices
Business Development
development
52 AnnualReport2011
RompetrolWellServices(RWS)isoneoftheleadingcompaniesinwellservicesinRomania.
Itoffersawiderangeofservicesforoilandgaswells,onthedomesticmarketaswellasin
severalEasternEuropeanandCentralAsiancountries.
Major performance and accomplishments in 2011— Increasedrevenuesby26%andanetresultincreasedby33%YTY.
— BeganwellserviceoperationsinHungary,andresumedserviceactivityinBulgaria
— Madea3.4millionUSDinvestmenttoimprovecementing,stimulation
andslicklineservices.
Aftertwoyearsofmoderategrowth,thewellservicesactivityinRomaniaand
neighbouringcountriesincreasedsignificantlyin2011.
Havingtheadvantageofowningmodernequipment,acquiredoverthelastyears,
RompetrolWellServicessucceededincapitalizingonthegreatervolumeofwork.
Thus,thecompanyhasshowna25%increaseinrevenueandnetprofitYTY.Although
therangeofservicesprovidedbythecompanyhasnotchanged,2011markedan
increaseofcomplexservicesofferedasaresultofthetechnologicalleapmadebyRWSin
therecentyears.
TheoverseasactivityfocusedontheneighboringcountriesandKazakhstan.Theresults
werea250%increaseinrevenuesregisteredbythebranchinKazakhstan,250%,and
a450%increaseofthewholeoverseasactivity.Thiswasduetothestartoftheservice
operationsforthermalwaterwellsinHungary,andtheresumingofwellservices
operationsinNorthBulgaria.
Themainfinancialresultsoftheyear2010were:totalrevenuesofover31millionUSD,
operationalprofit(EBITDA)ofover8millionUSDandaNetProfitofover4millionUSD.
In2011,RWScontinueditsmodernizationprogram,withthecompletiontermin
2014.Thecapitalinvestmentachievedintheyear,amountingover3.4millionUSD,
wasfocusedontheupgradeofcementing,stimulation,slicklineandtubularrunning
services.
Thecompanypaidparticularattentiontothemodernizationofdatamonitoringand
recordingsystems,fittedwithrealtimedatatransmissionforthewholerangeofwell
servicesitprovides.Inadditiontothesuperiortechnicalparameters,RWSisequally
interestedintheacquisitionofnewequipmentwithreducedemissions,whicharealso
equippedwithenvironmentalprotectivefeatures.
RWScarriesoutspecializedservicesinoilandgasfieldsinRomaniaandabroad.These
servicesincludecementing,consolidationandsandcontrolservices,stimulation,testing,
slick-line,tubularrunningoperationsetc.
RompetrolWellServices
26%revenueincrease
Business Development
53
Annually,thecompanycases300stringsandliners,rangingindepthfrom500to4.500
meters.Italsoconsolidatesandperformssandcontroloperationsformorethan200oil
andgaswells.
Stimulationservicesandslick-lineservices,aswellascasingandlinerrunning,are
accomplishedwithin-houseresources.Fortheoptimizationoftheactivities,the
companyalsooffersarentalserviceforitsdrillingtools.
RWSoverseesallongoingprojectsfromitsmainofficeinPloiesti,Romania,offering
technicalsupportfor13locationsinRomaniaandKazakhstan.
-Gross Revenues -Net Pro�t
Evolution of the main financial figures (USD)
2011 2010
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
450%increaseofthewholeoverseasactivity
Petrom72.8
Client structureDomestic market
(%)
IndependentOperators
15.6
Romgaz7.5
DrillingContractors
4.2
Client structureOverseas
(%)
Kazakhstan32
Bulgaria19
Hungary20
Others29 3.4
millionUSDinvestmentcapital
54 AnnualReport2011
2012 Key Objectives
— DevelopWell-Stimulationtechnologies.
— Focusonincreasingoperationsintheneighboringcountries.
— EnsureoperationalprofitabilityoftheKazakhstanBranch.
— Carryoutaninvestmentplanof3.7millionUSD,financedexclusivelyfrominternal
resources.
In2012andthefollowingyearsweestimateanincreaseofwellstimulationandother
enhancedoilrecoveryapplications.
Inthismarketenvironment,thecompanywillfocusontheimprovementofitsacidizing
andnitrogenservicestechnologies,aswellasonthedevelopmentandimplementation
ofdedicatedstimulationsoftware.
ImprovingwellservicesactivityinCentralandEasternEuropeancountrieswillbe
anotherimportanttarget,whilethecompanyalsoplanstoextenditsoverseas
operationsinAfrica.
Theinvestmentprogramwillbefocusedontheconsolidationoftheoperatingfleet,in
ordertoincreaseitscapacityandversatility,andimprovetheresponsetime.
3.7millionUSDinvestmentplan
Withmorethan30yearsofexperienceinprovidingequipment,expertiseandprofessional
servicesfortheinternationaloilandgasindustry,theRompetrolDrillingandWorkover
Divisionhasachievedabalancebetweenthestate-of-the-arttechnologyitusesanda
highlyqualifiedoperationalteam.Thecompanyhasdrilledover550wellsinSyria,Algeria,
Egypt,Iraq,Jordan,Libya,Sudan,andGreece,andover250servicedonlyinLibya.
Basedontheexperienceinprojectmanagement,localknowledgeandbroad
contractualbasis,DWhasthecapacitytorapidlymobilizeresourcesalmostforany
projectoftheoil&gasindustryworldwide,alsoduefrommanagingofprojectsinsome
ofthemostdifficultplacesintheworld.
Throughthismixtureofexperienceinoilservicesandtomanageprojectsinternationally,
RompetrolDrillingandWorkoverhasbuiltasoundreputationforthequalityofthejobin
thetraditionalmarketsofEasternEurope,NorthernAfricaandtheMiddleEast.
DW’semployeesareamongstthebestspecialistsinthefieldandtheyarekeepingthis
levelofprofessionalismthroughconstanttraining.Thisisrequiredinordertoguarantee
thattheydopossessthenecessaryknowledge,qualificationandexperienceneededto
finishtheirtasksproperly.
RompetrolDrillingandWorkover
70% lowturnoverYTYduetothesocio-politicaleventsinLybia
55
-2010 -2011
Turnover (USD)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
3,794
2010 2011
12,505
In2011,theRompetrolGroupDrillingDivisionhasfocusedthecontinuationand
developmentoftherelationwiththededicatedcustomers.Thecompanymakes
constanteffortstowardstheimprovementofcompetitivenessandmaintainingitshigh
leveloffunctionality,qualityandsafetyofservicesprovided.Thus,thecreationoffuture
collaborationandcustomerreachisimproved.
TheCAPEXProgramhascontinuedduringtheyearandinvestmentshavebeenmade
inordertoimprovethelevelofouroperationalassistance.TheProgramwas100%
implemented(effective8,838,000USDincomparisonwithbudgeted8,741,000USD),
despitetheharshfinancialenvironment.
Duetothesocio-politicaleventsthatshookLibya,thecompanysuspendeditsactivities
there(March2011),thusreachinga70%lowerturnoverYTY.
Drilling Division achievementsActivities on Romania
— ThecompanyfinalizedthepurchaseoftheRP11ROrig,commissioningitin
November2011.
— Thebeginningofa4yearframe-workagreementwithOMVPetrom,fordrilling
services.Thecontractisestimatedat22millionEUR.
— DrillingandMudloggingservicescontractsignedwithWinstar,for2wells–Madaras
andMoftinu,ontheSatu-Mareconcession.
— ExtensionofthemudloggingservicescontractwithOMVPetrom.
— MudloggingservicescontractsignedwithPetrofacSolution&Facilities,forwellson
theTiclenipremieter.
— 1yearcontractwithDirectPetroleumBulgaria,formudloggingservices.
— 3yearcontractwithSterlingResources,formudloggingservices.
Activities in Libya
AsaconsequenceoftheLibyanwarattheendof2011,ananalysisoftheequipment
hasbeencarriedout.Theresultshaveshownthattheequipmentcanbecontinuously
used,atapproximately90%ofitscapacity.Thecompanyestimatesthatitwillresumeits
activitiesstartingwithJanuary,2012.
Objectives for 2012
— FocusonsigningofanextensionofthedrillingContractwithWinstarSatu-Mare,
forthetestingof1000Moftinuand109Mădărașwells.
— Finishtestsat1000Moftinuand109Mădărașwells–Satu-Mareconcession.
— ExtendthemudloggingcontractwithOMVPetromuntilJune,30,2012.
— Purchaseanew320tonsrig.
— ResumeactivitiesinLibya,withall3rigs(Ghani,AmalandAwbarioilfields).
— IncreasetheRomanianmarketsharefordrilling,workoverandmudloggingservices.
— Extendoperationsthroughdiversificationofprovidedservices,byestablishingnew
strategicalliances.
— MaintainallIntegratedManagementcertifications.
56 AnnualReport2011
RompetrolExplorationandProduction
TheExplorationandProductiondivisionofTRGfocusedin2011onupgradingthe
currentleadsandprospectsportfolio,estimatedatover100MMbblprospective
resources,basedonseismicprocessingandinterpretation.
Furthermore,in2011E&Pcontinuedtoattractnewpartnerswithfinancialpotentialand
technicalcapabilitiesinthedevelopmentofongoingandprospectprojects.Tothis
extent,inOctober2011,aFarm-outAgreementwassigned.
ThetotalinvestmentmadeforRompetrolexplorationblocksin2011reachedUSD1million,
consistinginseismicacquisition,dataprocessingandinterpretationofgeologicalstudies.
2011 Key Achievements— TheRompetrolGroupcontinuedtheexplorationactivitiesonthefiveblockswhere
wearetitleholderandoperator:SatuMare,Zegujani,Greșu,NerejuandFocșani.
— Rompetrolhasfulfilledtheminimumworkprogramforalltheblocksonthephases
expiringonDecember2011.
— InSatuMare,in2011,wehavedrilledtheMadaras109(1690m)welltogetherwith
ourpartner,WinstarSatuMareRomania.Thewellwassuspendedfortests,while
preparationworksforthesecondwell,Moftinu1000,werestarted.
— WesignedafarmoutagreementwithAmromcoEnergyfortheGresuandNereju
blocks.
— IntheZegujaniBlock,wehavefinalizedtheinterpretationof120km2Ddetailed
seismicdata,identifyingmoreprospectsonSouthandNorthpartoftheblock.
— InFocsaniwehaveacquiredadditional55kmof2Dseismicdataandalsogravimetric
andmagnetometricinvestigationweredone,withtheviewtocovertheareaof
interestandforbetterdefiningtheNWFeteasca/Kaz1Prospect.
2012 Key Objectives
— IntheSatuMareBlock,thecompanyplanstodrilltheMoftinu1000well,withthe
objectivetofindcommercialoilaccumulationinLowerMioceneformation.
— Acquire80km2seismicdatatogetherwithWinstarSatuMare.
— DrillonedeepwellintheLupsaDragotestiProspect,ontheZegujaniblock;
— Finalizethefarm-outagreementforGresuandNerejublockswithAmromco.
— InFocsaniblock,drilltheNWFeteascaKaz1deepwell.
— IdentifynewproductionopportunitiesintheRomanianmatureoilfieldsordevelop
productionprojectsintheCaspianRegion,MiddleEastandNorthAfrica.
100 MMbblprospectiveresources
57
Key achievements in 2011Rominservhassuccessfullycompletedin2011theconstructionoftwonewplantsat
thePetromidiarefinery(MildHydro-crackingandHydrogenPlant),partofthecapital
investmentpackagethatwillincreasetherefineryprocessingcapacityto5million
tons/yearofcrudeoil.
Anothermajorachievementisthecompletionofthe2weekturnoverofthePetromidia
plant,scheduledinSeptember/October.Morethan4,000operationshavebeen
executedwithintherefinery,intheapprovedbudgetandtimeschedule.
Duringtherefineryshut-down,besidesthespecificturn-aroundoperations,other
significantprojectshavealsobeencompletedandintegratedintotherefinery’s
installations,suchasthemodernizationoffluegasesdesulfurization,conversionofthe
existingVGO(vacuumgasoildistillate)reactorintoDHS(dieselhydro-desulfurization)
reactor,aminerevamp,newnitrogenfacility,orthenewflaresystem.
Inthepetrochemicalsector,Rominservhassuccessfullycompletedthemodernization
worksoftheHDPEplantthatwillincreasetheproductionrangebyfournewspecial
applicationproducts.
IntheVegaRefinery,theworksforincreasingtheproductioncapacitywith100%of
N-hexaneplantwerecompleted,alongwithtechnologicalupgradesintheplantcooling
andcontrolsystems.
Duringtheentireyear,70projectshavebeenfinalizedintherefiningandpetrochemical
sectors,amountingto79millionUSD,whichincludesthetwomajorprojects,andseveral
lowcostprojectsthatimpactenergyortechnologicalconsumptionsavings,plussafety
andenvironmentcompliance(especiallyreductionofNOXemissions).
Maintenanceoftheplant’sinstallationswasanothermajorachievement.Besidesthe
compliancewiththeapprovedbudgets,mechanicalplantavailabilityreachedapeak
level,slightlyover96%,allowingtherefinerytoprocessbiggercrudequantitiesandto
cutitsoperationalcosts.
Thiswaspossibleduetotheimplementationofanintensiveprogramofpreventiveand
predictivemaintenance,riskanalysis,alongwithalternativehi-techsolutionsfortesting,
on-lineinspections,monitoringandrepairworksoftheplant’sequipment.
Apartfromtherefiningandpetrochemicalsectors,Rominservhasconsolidatedits
marketpositionfornon-groupclients,mainlyinthesectorofpublicinfrastructure
projects,likewatersupplydistributionandseweragenetworks.
In2011,Rominservalsocompletedtheturn-keyconstructionofavegetaloilstoragetank
farmforMartiferGroup,alargePortugalgroupwithextensivebio-dieselproductionin
Romania.
InNovember2011,thenon-groupclientportfoliowasextended,bysigningatwo-year
maintenancecontractforDalkiaTermoco-generationplantatBrazi-Ploiești,Romania.
Rominserv
70
79
finalizedprojectsintherefiningandpetrochemicalssectorsamounting
millionUSD
58 AnnualReport2011
59
Withexcellenttechnicalresultsachievedduringthemaintenanceprojectsandindustrial
servicesin2011,Rominservmanagedtoincreaseitssales,achievingaturnoverof225
millionsUSD(over4%increasestowards2010)andanEBIDTAincreasebyapproximately
46%,in2011,comparedto2010.
RominservKazakhstanfinalizedthereconstructionworksattheAtyraurefinery–
AtmosphericVacuumDistillationUnitandtheDelayedCookerUnit.
Main Objectives for 2012
Oneofthemainobjectivesfor2012isrelatedtotheachievementofruntests,
commissioning,start-upandperformancetestsoftheMildHydro-crackingand
HydrogeninstallationsonthePetromidiaplatform.
Atthesametime,thenewSulfurRecoveryUnit,theTailGasTreatmentortheDelayed
Cokerunitsarealsostrategicprojects,fortherefinery’sproduction,technological
upgradeandenvironmentalcompliance.Theseinstallationswillbecompletedandput
intooperationin2012.
AttheVegaRefinery,Rominservisworkingtocompletetheprojectforanewcrude
vacuumdistillationcolumn.Furthermore,thenewlybuiltinstallationshavetobe
integratedintheexistingprogramanddatabase,whiletheexistingprogramof
preventiveandpredictivemaintenanceandinspectionsshallbepermanentlyimproved
forachievinghighestpossibleplantmechanicalavailabilitylevels.
Intensiveengineeringworkswillsupportfurtherdevelopmentandimplementationoflow
costprojectsthatwillhaveanimpactontherefinery’senergyortechnologicalconsumption
savings,safetyandenvironmentcompliance(especiallyreductionofNOXemissions).
ExtendEPC(engineering,procurement,construction)contractorservicesforup-stream
projects,i.e.surfaceworks,isanobjectiveaswell.
Rominservwillstartachallengingproject(worthapproximately100millionUSD),in2012,
attheCombinedHeatandPowerPlant(CCPP)of75MW,basedonnaturalgas,located
withinthepremisesofthecompany“UzinaTermoelectricăMidia”,Năvodari,România.
Regardingthenon-groupclients,Rominservestimatesanincreaseofitsbusiness
portfolioandturn-overwith20%,asaresultofinfrastructureprojectsforwatersupply
distributionandseweragenetworksandinindustrialservicesandmaintenance.
In2012,Rominservisalsofocusingtoextendthebusinessinnewcountries,for
non-groupclients,mainlyinoildownstreamsector.
Thecompanywillcontinuetheoptimizationandcostefficiencyprocess,withthe
particularobjectivetoreducegeneraladministrativecosts,toreviewcontractswith
suppliersforbetterpricesandpaymentsterms,torestructurecompanyinternal
processesandflows.
-2010 -2011
Net revenues (mill USD)
0
50
100
150
200
250216
225
20112010
225
46%
millionUSDturnover
EBITDAincrease
60 AnnualReport2011
Key achievements in 2011RominservValvesIaifocontinuedin2011tocontributetoTheRompetrolGroup’s
strategicgoal–tofinalizethecapacityincreaseprogramatthePetromidiaRefinery,up
to5milliontonsofprocessedcrudeoilperyear–byprovidingtheplantwithmorethan
7,000ironandsteelindustrialvalves.
Thegeneralmarketconditions,influencedbytheinternationaleconomiccontext,have
causedmajorchangesintheactivityofalleconomicagents.Thevalveproduction
activitydivisionatRominservValvesIaifohasadjusteditsbusinessstrategyaccording
totheevolutionofthemarketdemand,aswellasthepriceofrawmaterialsandthe
productioncost.
Thecompanyhomologatesattheendof2011thelargestcomponentpartconstructed
uptothatpoint.Thepart’soverallnetmassis4,300kg/pieceandduetoitscomplex
shape,27coresforcastingwerenecessaryforassembly.Thecomponentswerecastiron,
accordingtotheASTMAstandard,anditrepresentedaninnovationforRISZalaufoundry.
Inadditiontothis,RominservValveshomologatedthecaststeelgatevalvesforged
variant,weldedflanges,accordingtostandardsDINandAPI,DN1/2"–11/2".
During2011,thecompanycontinueditscollaborationwithGEAGroupGrasso–one
ofthelargestengineeringcompaniesinGermany–forcomplexcastings,producedat
foundryinZalau,thushomologating67newparts.
RominservValvesmanagedtoincreaseitssales,reachingin2011aturnoverof10.75
millionUSD,37.53%morecomaparedto2010,and14.61%overthepredictedturnover.
RominservValvesIAIFO
Main objectives for 2012
Thecompanywillemphasizein2012ontheinvestmentprogrammeanttoalignthecompanytoallenvironmentalstandards,
withthedeliverytermofJune30th,2012,andontheexpansionofitsrangeofproducts.Theexpansionoftheproduct’srangeoffered
byRominservValveispartofthestrategymeanttoimprovethecompany’sturnover.Outsidethemainproducts,IaifoZalaucanproduce
customparts,whichisamajoradvantageinanmarketwitharapidexpansion.
In2012,RominservIaifoestimatesaturnoverof9.9millionUSD,5%above2010.Thisestimationisbasedontheincreaseofcastcomponents
sales,aswellasthenumberofordersplacedbythecompany’sforeignclients,thankstothegrowthshownbyWesternEurope.
-Budget 2011 (USD) -Actual 2011 (USD)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
DecNovOctSepAugJulJunMayAprMarFebJan
10.75 millionUSDturnover
61
ThelaboratorydivisionofTheRompetrolGroup,RompetrolQualityControl(RQC),isone
ofthetoplocalcompaniesonlaboratoryanalyses.Since2004,whenitwasfounded,
RQChasbeenconstantlyidentifyingandimplementingthesafestandmostefficient
methodsofenvironmentalprotection,aswellasassuranceofproductquality.
Regardlesstheeconomicconditions,in2011thecompanycontinuedtodevelopand
improveitsbusinessactivities,managingtokeepitsmajorclientsandattractnewones.
TheimplementationofnewtypesofanalysesisamajorachievementforRQC.Thislead
tothecompany’sbusinessconsolidation
Furthermore,RQCrenewedthemainaccreditationcertificatesfromRENARand
GERMANISCHERLLOYD,inordertoconsolidatetherelationswiththethird-partyclients
andtoattractnewcustomers.Thiswasachievedbybeingunbiasedandalwayslooking
aftertheconsumers’bestinterests.
Alsoin2011,theRQC’slaboratoriesobtainedexcellentscores,throughtheparticipation
tovariousinternationalinter-laboratoryproficiencytests.
RQCcontinuedtodevelopitsbusinessbyimplementingnewtypesofanalysesand
acquiringtheappropriatecertifications.Thiswasrequiredinordertomeetitsclients’
demandsandaccordingtotheRomanianandEuropeanlegislation,necessaryinorder
tocontinueofferingpetroleumproductsanalyses–coalanalyses(humidity,volatile
substances,ashes,power,sulphurcontent)andenvironmentalanalyses–sodium
hypochloriteanalyses.
ThiswasaddedtothelargerangeofanalyseswhichRQCalreadyperforms:
— Completeoilproductsanalyses(crudeoil,gasoline,dieseloils,LPG,kerosene,
petroleumcuts,cokeandpetroleumsulphur,ecologicalfuels–biodieselandbio
ethanol,bitumen,etc.)
— Completewateranalyses(contaminatedchemicalwater,processingwater,drinkable
water,drainagewater,coolingwater,softenedwater,desaltingwater,boilerwater,
swimming-poolwater,steam,condensewater,undergroundwater,etc.)
— Completesoilanalyses(industrialsoils,agriculturalsoils,andindustrialmud)
— Completeairanalyses(physicalandchemicaltoxicsubstancesfromthe
workingplacesairandfromprotectedareasbydeterminingthecorresponding
concentrations)
— Explosionmeteringanalyses(determinationofexplosionhazardpotentialwhen
workingwithopenfireinindustrialspacesandclosedvessels)
— Medicalandbio-toxicologicalanalyses(forquantitativeandqualitativedetermination
ofvariousspecificcomponents)
— Analysisofphysicalandchemicaltoxicemissionsatworkingplaces(byobservingthe
provisionsoftheapplicablelabourprotectionnorms)
— Analysesofweatherfactors,environmentandspecificmicroclimates
— Chemicalanalysesonmetalmaterials
RompetrolQualityControl–RQC
62 AnnualReport2011
Theaccuracyoftheprocessesandanalysesperformedareconfirmedbythe
certificationsRQCobtainedandmanagedtomaintain.Thisleadtothecreationofthe
toolsneededtoenlargetheportfolioofthirdpartycustomersandconsolidatethe
company’spositiononthespecificmarket:
— RENAR–RomanianAccreditationAssociation.AllRQClaboratoriesareaccredited
accordingtothestandardSRENISO17025:2005,acertificationgrantedbyRENAR,the
onlynationalinstitutionthatcancertifythestandardsoflaboratoryactivities.Hence,
analysesperformedbyRQCareacknowledgedinover70countrieswhosignedthe
agreementsforinternationalacknowledgement(I.L.A.C,M.L.A.,E.A.)concludedby
RENAR;
— GermanischerLloyd(2008)certifiedRQCfortheIntegratedManagementSystem:
Quality(ISO9001),Environment(ISO14001)andWorkplaceSafety(QHSAS18001)
— AFER–RomanianRailwayAuthority–licensesforrailwayproductstrials(diesel,oils
andenvironmentalparameters)
— ISCIR–RomanianInspectionAuthorityforControlofBoilers,PressureVesselsand
LiftingEquipment–licenseformetallic-graphictrialsandboilerwatertests
— MinistryofHealth(PublicHealthDepartment)–Authorizationtoconduct
professionaltoxicemissionsmeasurements
Sinceitsestablishment,RQCconstantlyinvestedinitsdevelopmentandlaboratory
upgradeandmodernization,inordertooptimizeitsprocessesandthequalityofthe
servicesoffered.Asaresult,RQC’slaboratoryactivityisentirelycomputerizedthrough
LIMS(LABORATORYINFORMATIONMANAGEMENTSYSTEM),aninformationalprogram
thatincreasestheaccuracy,efficiencyandproductivityofouractivities.RQCwasthefirst
companyontheRomanianmarkettoimplementthisinternationallyrenownedprogram.
Ongoingeffortstoimprovethequalityofourservicesarealsoconfirmedbythe
certificatesofexcellenceobtained.Thiswastheresultofourconstantparticipation
tovariousinternationalproficiencytesting(PT)programsandcollaborationswith
internationalresearchcenters(Spain,TheNetherlands).TheparticipationinPT
evaluationsguaranteesthattheresultsoftheanalysesarecorrect,andalsokeeptheir
integritywhenthesampleistestedagain,byotherlaboratories.Thus,thisprovides
theconfidencethatourlaboratoriesproducereliableresults,factofmajorimportance
tothelaboratoryitself,theorganizationitbelongstoandalsotopotentialcustomers,
accreditationorregulatorybodies.
Anotherimportantacknowledgementforourcompanyhasbeenprovidedeveryyear,
since2005,bytheMinistryofEconomyandFinances.ThishappenedintheEuropean
financedproject“Qualitativeandquantitativemonitoringsystemforgasolineanddiesel
oil”,ontheobservationoftheEuropeanUnionconditionsonintroducinggasoline
anddieseloilontheRomanianmarket.RQCcontinuedthiscollaborationin2011and
strengtheneditsrelationshipwiththestateauthoritybyperformingatitsrequest
analysesfordeterminingthecontentofsulphurinliquidfuels,anothercollaboration
whichstartedin2009.
In2011,RQCrenewedthecollaborationwithoneofitsmajorclients,ArcelorMittalGalaţi,
thelargeststeelworksoperatorsinRomania.Thiswasachievedthroughacontractfor
environmentalfactorsmonitoring,whichcontributedtotheconsolidationofRQC’s
positiononthemarket.
Oneofthemainfocuspointsin2011forRQCwastogainandkeepthetrustofits
customersandinterestedorganizations.Thiswasachievedbymaintainingahighlevel
ofqualityforitsprovidedservices.RQCmanagedtokeepitsmajorclientscloseandalso
startnewpartnerships.Therefore,thecompanycontinuestobeacompetentpartner
RQCrenewedcollaborationwithoneofitsmajorclients,ArcelorMittalGalaţi,thelargeststeelworksoperatorsinRomania
63
forthemajorindependentinspectioncompanies,withactivitiesintheConstantaport,
intermsofspecificanalysesforimported/exportedoil.TheEnvironmentalLaboratories
havebecomeaviablealternativeforcompaniesintheDobrogearegion,focusing
mainlyonmonitoringspecificenvironmentalfactors(waters,air,andsoil).Moreover,the
companyhassignificantanalysesactivitiesinotherregions,suchasBanat,Muntenia,
OlteniaorSoutherMoldova.
TheeffectsofthesevereeconomiccrisisthatRomaniapassedthroughin2011are
reflectedinRQC’sturnoverandnetresultsevolution.Still,RQCmanagedtoremain
financiallyindependent.Asinthepreviousyears,thecompanycontinuedtodevelopits
activitieswithoutanyfinancialexternalfunds,thusprovingitssolvabilityandraisingthe
trustofitsstakeholders.
As a major objective in 2012,RQCwillexpandtherangeof
servicesbyaddingnewtypes
ofanalyses(e.g.airandvacuum
distillationanalyses,determination
oftotalorganiccarboninairandsoil
pollutants,brominevalue).
Also,thecompanyintendsto
maintainthemainaccreditation
certificatesfromRENARand
GERMANISCHERLLOYD.Asa
powerfulmarketingargument,this
objectiveaimstoconsolidatethe
relationswiththethird-partyclients
alreadyexistingintheportfolio,
andtoattractnewcustomers.This
objectivewillbeachievedbystaying
technicallycompetent,impartial,
keepingthecompany’sintegrity,and
protectingtheconsumers’interests.
Dynamics of revenues from third party customers in total turnover (%)
12
6
7
11 11
8
9
10 1011
10
9
8
7
6
5
2005 2006 2007 2008 2009 2010 2011 2012budgeted
2012budgeted
RQC Third-party Revenues (thousand RON)
0
500
1,000 981
1,331
1,8871,814
1,587
1,886
1,704 1,776
1,500
2,000
2005 2006 2007 2008 2009 2010 2011
Other major objectives are:
— Theaccreditationextensionforthenewanalysismethodsandinspectionservices.
— ThecapitalizationofnewmarketopportunitiesinordertoconsolidateRQC’smarketshare.
— Increaseofprofitabilityandthepercentageoftheturnoverfromthird-party
customers.
RQCisaimingtooptimizetheoperationalcostsandtoregisterzeroaccidentsin
laboratoriesandtheotherlocations.Thisobjectivewillbetargetedbya100%
implementationofthepersonneltrainingplanonoccupationalhealthandsafety,which
includesDuPontSafetyResources.
64 AnnualReport2011
In2011,thegeneralmarketconditions,influencedbytheinternationaleconomiccontext,
havecausedmajorchangesintheactivityofallcompanies.Palplastmanagedtoadjust
itsbusinessstrategyaccordingtotheevolutionofthemarketdemand,focusingon
infrastructureandagricultureprojects,supportedbyEuropeanfunds,toresizethe
productioncostsandthepipeprices.
2011 Key Achievements:— Newdomesticsuppliers(ReplasticaTimisoara,SabicEurope).
— Newcontractsforagriculturewithpaymentinadvanceweresigned.
— Anextensivemarketresearchwasperformed,contactingmostofthedomestic
constructors,whoofferwatergasandsewerageworks.
— Developmentofthecommercialandproductiondepartmentwithnewemployees.
Palplast’sproductionwassuspendedforaperiodof4months,betweenApriland
August.Afterresumingproduction,theresultsimprovedsignificantly,operationalresult
+182kUSD,netresult+161kUSD,inspiteofthefactthatproductionwasstartedin
autumnwhenpipemarketisaffectedbyseasonality.
Thefactthatthecompanymanagedtogetgoodresultsunderthesecircumstances
leadstoconclusionthatithascapabilitytoextendandbecameahighprofitable
business.TheprofitsgainedinSeptember–December2011coveredmostoftheprevious
lossandimprovedtheresults.
Palplastsignednewcontractswithdomesticsuppliers(ReplasticaTimisoara,SabicEurope)
andforagricultureprojectswithpaymentinadvance.In2011,thecompanyperformedan
extensivemarketresearch,contactingmostofthedomesticconstructorswhoperformed
watergasandsewerageworks.
PalplastSibiumaintainedtheproductionactivityofopticalfiberprotectiontube,in
additiontocarryoutwaterandsewageinfrastructureprojects.
Moreover,thecompany’sstrategyhasincludedaseriesofcostcontrolandreduction
actions,aswellastheimplementationofeffectivebusinessstrategiesinitsrelationwith
suppliersandcustomers.Lastyear,Palplastdevelopedthecommercialandproduction
departmentwithnewemployees.
In2011,Palplasthadaturnoverofapproximately3.4millionUSDwithaproduction
of1,030tonsofpipe.
2012 Key Objectives
Palplastwillcontinueitsinvestmentprogramin2012,butwilladjustittotheproduction
needsrelatedtotheprojectsthatthecompanyhasalreadyundertakenin2011.The
companywillalsoensurethatitmaintainsthequalitystandardalreadyimposedonthe
market.Thus,Palplastwillinvestinthemodernizationoftheproductioncapacities,which
wouldresultinoptimizedproductivity,reducedcostsandthelowerenvironmentalimpact.
For2012,thecompanyestimatesaturnoverof7.2millionUSDwithaproductionof2,555
tonsofpipe.
PalplastSibiu
3.4 millionUSDturnover
1,030 tonsofpipe
65
-2010 -2011Direct distribution (import; USD)
0
100,000
200,000
300,000
400,000
500,000
20112010
459,374
361,947
-Budget 2010 -Actual 2011Logistic costs (%)
Actual 2011Budget 2011
2.28 2.45
0.00
1.00
2.00
3.00
-Jan 2010 -Dec 2011Welding machines stocks (pieces)
31 Dec 20111 Jan 2011
10
14
0
3
6
9
12
15
2011 Key Achievements— DevelopmentoftheNationalPartnershipProgramwithregionalwastecollectors
(52partners);
— QHSEcomplianceofEcopark(afterobtainingtheIntegratedEnvironment
Authorization);
— Hazardouswastecollectedin2011amountsto9,600tons.
In2011,EcomasterEcologicalServiceshassignednewcontractswith52ownersof
hazardouswasteforservicesprovidedbyEcopark.
FortheRomanianenvironmentalmarket,Ecoparkrepresentsanimportantlandmark,
duetothemodernandreliableconditionsofstorageoffered.
Throughtheprogramforthepartnershipsdevelopment,thecompanyisabletooffer
thefullspectrumofwastemanagementservicestocustomers,bothdirectlyandvia:
transport,treatment,neutralization,stabilization,finalelimination,bioremediation,
thermaldesorption,ensuringatthesametimetraceabilityandeconomicefficiency.
ThecompanyreceivedtheQHSEConformitycertificates,forthehazardouswaste
managementactivity.
TheIntegratedEnvironmentAuthorizationfortheactivityatEcoparkwasreviewed,
aimingtointroducethehazardouswastetreatmentactivity,whichshallbecarriedout
usingtheautomatedtreatmentplant.
EcomasterEcologicalServices
9,600 tonsofhazardouswastecollected
Thereareverygoodprospectsfor2012,duetothefactthatduringDecember2011we
recevedover40pricerequestsrelatingto2012forPEpipeandfittings,intotalamount
ofaproximately4milionUSD–inagrowingmarket.
Weexpectthepiperequesttoincreaseasalargenumberofwater,sewerage,andgaswork
wereauctioned.Weestimatethatanimportantpartoftheserequestswillmaterializein
contracts.
66 AnnualReport2011
160 thousandtonsofhazardouswasteprocessed
2011 Key Achievements— DevelopmentoftheNationalPartnershipProgramwithregionalwastecollectors
(52partners);
— QHSEcomplianceofEcopark(afterobtainingtheIntegratedEnvironment
Authorization);
— Hazardouswastecollectedin2011amountsto9,600tons.
In2011,EcomasterEcologicalServiceshassignednewcontractswith52ownersof
hazardouswasteforservicesprovidedbyEcopark.
FortheRomanianenvironmentalmarket,Ecoparkrepresentsanimportantlandmark,
duetothemodernandreliableconditionsofstorageoffered.
Throughtheprogramforthepartnershipsdevelopment,thecompanyisabletooffer
thefullspectrumofwastemanagementservicestocustomers,bothdirectlyandvia:
transport,treatment,neutralization,stabilization,finalelimination,bioremediation,
thermaldesorption,ensuringatthesametimetraceabilityandeconomicefficiency.
ThecompanyreceivedtheQHSEConformitycertificates,forthehazardouswaste
managementactivity.
TheIntegratedEnvironmentAuthorizationfortheactivityatEcoparkwasreviewed,
aimingtointroducethehazardouswastetreatmentactivity,whichshallbecarriedout
usingtheautomatedtreatmentplant.
Also,theEnvironmentalAuthorizationfortheactivityofcollectinghazardous/non-
hazardouswasteandtransportwasalsoreviewed.Thiswasneededinordertotransfer
theseactivitiesfromtheVegarefinery,toEcopark,andallowedtheexpansionofthe
collectedwastespectrum,togetherwiththetemporarystorage,inviewofeliminationor
furtherusage.
TheWaterManagementAuthorizationonEcoparkhasbeenextendedthroughthe
introductionofthehazardouswastetreatmentactivity.
Furthermore,toregulatetheactivityhazardousandnon-hazardouswastecollection
nationwide,EcomasterhasbeengivenauthorizationbytheNationalAgencyforthe
EnvironmentalProtection.
2012 Main Objectives
Integrated Management of increased volume of hazardous waste
— EcoparkDevelopment(increaserevenuesandnewinvestments);
— Developstrategicpartnershipstoincreasemarketshareandaccesstocomplex
environmentprojects;
— TREATapplicationservicecapabilitiesforthetreatmentanddecontaminationoflarge
scaleprojects.
Also,Ecomasterhasmajorprojectsintreatmentanddecontamination.Technologies
andknow-howacquiredbyEcomasterinthelastfewyearsallowedprocessingand
neutralizationofover160,000tonsofhazardouswaste,onthePetromidiaplatform
alone.Ecomasterintendstoimplementtreatmentcapabilitiesinmoredecontamination
projects,forRompetrol,aswellasoutsidetheGroup.
Tothisextent,EcomasterwillrevisetheIntegratedEnvironmentalAuthorization,inorder
tointroducenewtreatmenttechnologiesandactivitiesontheEcoparkplatform.
Ecopark Development
Ecomasterisveryinterestedin
developingstrongpartnershipswith
keyplayersontheregionalmarkets,
aimingatconsolidating
thetechnologicalcapabilities
ofthecompany.
67
QHSE
Regardingourpolicytowardsenvironmentquality,securityandhealth,weconsider
thatalltasksandactivitiesmustbesafeforouremployees,forthirdpartiesandforthe
environment.
Thehealthofouremployeesisveryimportant,andsafetyattheworkplaceisapriority
formanagementandforeachemployee.Ourmaingoalistoreducetozerothenumber
ofincidentsandtocreatesafetyhabitsforallemployees.
Giventhefactthatoneofourprioritiesisenvironmentprotection,wecommitourselves
toreducetheimpactonenvironmentandCO2emissions,resultedfromouractivities,
productsandservices.Environmentissuesaretakenintoconsiderationinthedecisional
processateachlevel.
Weprovideourpartnersandclientswithdetailedinformationregardingourproducts
andservices.Weattentivelyfocusonthequalityoftheproductswesupply,sotheymust
complywiththoroughsafetystandardsandmusthavealowimpactonenvironment.
Safetyandreducedimpactovertheenvironment
68 AnnualReport2011
TheRompetrolGroup(TRG)considerssocialresponsibility
asvoluntarycontributiontodevelopmentinthesociety,
connectedwiththebasicactivityofthecompany,
theinternationallawsandtheresourcesofthegroup.
CorporateSocialResponsability
Corporate Social Responsability
community
70 AnnualReport2011AnnualReport2011
AsaleadingCorporateCitizen,TheRompetrolGroupseekstoactresponsiblyinall
activities.Asaglobalcompanywhosesuccesshasbeenbuiltoninnovation,passion
throughqualityandindividualleadership,werequirehighCorporateandPersonal
Responsibilitystandardswhereverweoperate–withtheultimateaimofimprovingour
businessandthequalityoflifeofthoseweimpact.Wearecommittedto:
OurcommitmenttoCSRprovides
aguidingframeworkforallour
managementdecisionsandwefocus
particularlyonharnessingindustry
bestpracticebyencouraging
CompanyandCommunity
participationincorporatecitizenship
projectsfocusedonraisingthe
standardsintheareasof:Business
success,Environment,Healthand
Safety,CommunityResponsibility,
YouthEducationandLeadership.
1Sustainable,responsibledevelopment
whichextendsthroughandbeyondthe
lifeofouroperations;
3Bestpracticesincorporategovernance
asitaffectsallofourcommunitiesof
stakeholders,includingouremployees,
localandregionalcommunities,
suppliers,investorsandpartners;
2Operatingethicallyandresponsiblywith
respectforthesafety,healthandwelfare
ofouremployeesandpartnersinthe
community;
4Investingtimeandenergyinpromoting
thespiritofleadershipthrough
entrepreneurialandeducationalpursuits.
MissionandValues
HighCorporateandPersonalResponsabilitystandards
Corporate Social Responsability
71
ThespiritofTheRompetrolGroup’sapproachtowardsCSRisreflectedinour
corporatemotto,“EnergyforLife,”whichisacalltoongoing,activeinvolvement
inprojectsthatmeetourCSRgoals.
RompetroldefinesthefollowingguidingprinciplesofitsCSRPolicy:
1Respect Employees
Torespectemployeesandhelp
enhancetheirlifethroughdevelopment
opportunitiesandemploymentpractices
groundedonequalopportunitiesand
OccupationalandSafetyBestPractices
3Health and Safety
Toensurethehealthandsafetyof
ouremployees,suppliersandthe
communitiesinwhichweoperate
5Education and Leadership
Topromotethespiritofleadership,
especiallyamongyoungpeople,
throughcivicinvolvementand
educationalactivitiesthatencourages
sociallyresponsiblepursuitsand
entrepreneurship
7Best practice
WeareguidedbytheUnitedNations
GlobalCompact’stenprinciplesin
theareasofhumanrights,labor,the
environmentandanti-corruption.
2Ongoing Involvement
Toinvolveatanappropriatelevelthe
authorities,community,andother
concernedstakeholdersinalldecisions
thataffectthem
4Risk management
Toidentify,assess,manageand
mitigateriskstoourhostcommunities,
employees,contractors,theenvironment
andourbusiness
6Respect local communities
Torespect,protectandpromotethe
humanrights,culture,customsand
valuesofthecommunitiesinwhichwe
operate
TheRompetrolGroup,asasocially
responsiblecompany,iscommitted
totheongoingimplementationand
improvementofthequality
ofsocialactivitiesinthefollowing
maindirections:
External Social Responsibility
— SocialPartnership
— EnvironmentProtection
Internal Social Responsibility
— DevelopmentofHumanResources
potential
— Healthandjobsecurity
— SocialCausessupportedby
Rompetrolemployees
Inordertocomplywiththeguiding
principlesoftheGroup,thefollowing
ruleswillbeapplied:
— AllCSRprojectswillbeundertakenin
thespiritoftransparency,fairness,and
respectforhumanrights,laborand
anti-corruptionpractices.
— AllCSRprojectsrequireapro-active
inputbyallemployeesand
arecoordinatedbyCorporate
CommunicationandPublicAffairs
Department.
— AllCSRprojectsarereviewed,
monitoredandmeasuredonan
ongoingbasis.
— TheCompanywillseekprojectsthat
promotethedevelopmentofsocial
capitalbetweenourstakeholders.
GuidingPrinciples
72 AnnualReport2011Corporate Social Responsability AnnualReport2011
73
ExternalSocialResponsibility
Social Partnership
Toprovidesupportandfinancialaidtosociallyvulnerablesectors,TheRompetrolGroup
gathereditsinitiativeswithintheCSRplatform“Energycomesfromtheheart”(launched
inMay2009)–whichincludesanationalprogram,“Togetherforeachandeveryone”,
andseparateprogramsinthefieldsofhealthcareandenvironmentprotection,thetwo
directionstheGrouphasdecidedtosupport.AttheGrouplevel,in2011,theinvested
amountinsocialcausesexceeded1millionUSD.
In2011,thenationalprogram“Togetherforeachandeveryone”considered195projects
registeredonthewebsitewww.impreunapentrufiecare.ro(123inthehealthcarefield
and72inenvironmentprotection).Aftertheevaluationperiod,19projectswere
financedinAlba,Arad,Argeș,Bacău,Bihor,Brașov,Buzău,Caraș-Severin,Constanţa,
Galaţi,Hunedoara,Mureș,Sălaj,SibiuandBucharestcounties.Allprojectshadtwo
overlappingparts:onewhichconsistedintherestorationofmedicalcareunitsinrural
andurbanareas,ortheconstructionofwatercollectors,ecoplantsforwaterrecycling,
solarpanelsforschools,andasecondcomponentwhichconsistedineducationaland
culturalactivitiesforthemembersofthecommunities.Thetotalinvestedamountforthe
implementationofthe19selectedprojectswas275.000USD.
Severalprojectsonhealthcareandenvironmentprotectionweredevelopedin2011
aspartoftheplatform“Energycomesfromtheheart”.Inthehealthcarefield,The
RompetrolGroup,FundaţiapentruSMURDandtheGeneralInspectorateofAviation
(IGAV)enteredapartnershipforsupportingairemergencyinterventions,themovement
ofmedicalpersonnelandthetransportationofvictims.Inthiscooperation,the
RompetrolGroup,throughRompetrolRafinare,providedin2010amonthlyamountof
30tonsofJetA1fuel,thequantityestimatedfortheoperationofthetwohelicoptersin
BucharestandTârguMureș.
TheRompetrolGroupisinvolvedinsocialpartnerships,implementingjointprojectsand
programsorarrangingsocialevents.
In2011,theGroupdecidedtosupportthe20theditionoftheprestigiousGeorgeEnescu
InternationalFestival,heldinseveralcities,fromSeptember1throughSeptember25.
ThisassociationofRompetrolwithsuchalargescaleeventwasmeanttostrengthenthe
internationalvocationofthetwobrandsanditsproducts–fuelsandqualitymusic.The
partnershipcreatedtosupporttheprestigiousculturaleventallegedthetotalquantity
offuelrequiredtooperateofficialcarsusedinthefestival.Thecompanyalsoprovided
financialsupportfor“GeorgeEnescu”festival.Thecompanyofferedthepublican
exceptionalconcertoftheLondonSymphonyOrchestraonSeptember09,atthePalace
HallinBucharest.
1millionUSDinvestedinsocialcauses
74 AnnualReport2011
Muchattentionispaidtosupportthenationalcampaign“FiecareCopilînȘcoală”(Each
ChildinSchool)initiatedbyOvidiuRomAssociation.Thispartnershipwhichbecame
effectivein2004advocate:schoolpreparationprograms,freeschoolmaterials,uniforms
andhotlunchesforchildrenfromlow-incomefamilies;incentivesintheformoffood
coupons;enforcementofeducationandchildren’srightslegislationetc.
Startingasof2003,RompetrolisapartnerandmainsponsorforGalaSocietăţiiCivile
(CivilSocietyGala)–theannualcompetitionthatawardsthebestprojectsoftheyear,
projectsinnitiatedbyNGOs,unions,individualsetc.
In2011,thecompanyhascompletedvarioussocialpartnershipsorsponsoredinitiatives
oftheJuniorAchievementRomania(leadershipprogramforhighschoolstudents),
FreedomHouseRomania(tosupportyoungjournalistsinRomania),amongothers.
Environment Protection
TheRompetrolGroupcarriesoutenvironmentprotectioninfullconformitywith
therequirementsofthenatureprotectionlegislationoftheEuropeanUnion.The
environmentalstrategyhasthefallowinginterestareas:
— Complianceofactivitiesandfacilitiesatnationalandinternationalrequirements;
— Tominimizeenvironmentalincidents;
— Tominimizetheconsumptionofresourcesandquantitiesofwastegenerated;
— Tooptimizetheoperation,intermsofenergyfacilitiesandreduceCO2emissions;
— Tomaintainacertifiedenvironmentalmanagement;
— Permanenttrainingofspecializedpersonnelinthefield;
— ToensuregoodcommunicationwithintheGroupandtheinterestedpublic,NGOsetc.
In2011,therewasnoenvironmentalincidentleadingtoaccidentalpollution.
Thegrouphas5IPPCplantswhichmettheirobjectivesfor2011:2plantsinoilrefining
(PetromidiaandVegarefineries),1petrochemicalplant(RompetrolPetrochemicals),
1plantinthemetallurgyindustry(RominservIAIFOZalau)and1wastelandfill(Ecopark–
hazardouslandfillopenedin2010).Also,during2011,novalueswereregisteredinexcess
oftheemissionthresholdsforthespecificpollutantswhichweremonitored.
Since2008TheRompetrolGroupisamemberofCONCAWE(ConservationofClean
AirandWaterinEurope),anorganizationfoundedin1963whichresearchesmultiple
aspectsofenvironmentalprotectionintheoilindustry.OnceaffiliatedtoCONCAWE,all
oftheGroup’smembercompaniesbenefitfromassistancetocomplywiththeEuropean
REACHRegulation(Registration,Evaluation,AuthorizationandRestrictionofChemicals).
Thisis,byfar,thelargestlegislativeprojectadoptedbytheEuropeanUnioninthepast
yearswhichaimsatestablishingaconsistent,transparentandsafermanagementof
chemicalsintheE.U.
Allcompanies,membersofTheRompetrolGroup,maintainedtheirGermanischerLloyd
certificationsfortheirintegratedmanagementsystems(ISO9001:2008,ISO14001:2004and
OHSAS18001:2007).However,in2011twoothercompanieshaveobtainedcertification
ofmanagementsystemsintegrated:TheRompetrolGroupCorporateCenterand
RompetrolBulgaria.TheRompetrolGroupinvestedinenvironmentalprotection,in2011,
approximately25millionUSD,themostimportantprojectsbeingintherefiningsector.
25millionUSDinvestedinenvironmentalprotection
Corporate Social Responsability
75
InternalSocialResponsibility
Human Resources Development
TheRompetrolGrouppaysparticularattentiontohumanresourcesdevelopment
andtraining.Thus,thecompanyprovidedadvancedtrainingandimprovementof
professionalskillstomorethan3779employees,basedontherequestsoftheirpositions
withintheGroup.
Theywereabletodevelopbothtechnicalskills(ACCAandMBAprograms,IFRS,Project
Management,specificcoursesaboutoilandgas,coursesofEnglishandRomanian
languageforexpatsemployeesandsoon)butalsoonthebehavior(courseson
leadership,customerservice,managementskillsetc.).Acomprehensiveprogramof
professionaltrainingwasofferedtotheemployeesofRompetrolDownstreamandit
involved138peoplefromthemanagementand1578employeesfromthedistribution
(station)withatotalof11,039hoursoftrainingdeliveredin20cities.
RompetrolRefining,therefiningdivisionofTheRompetrolGroup,developedin2011a
comprehensivetechnicaltrainingprogramto9employees/operatorsofthecompany
AgipKCOKazakhstan,responsibleforexplorationandproductioninthefirstphase
oftheKashagan(Caspian).Theobjectiveoftheprogram“OntheJobTraining”aimed
atfamiliarizingthenineoperatorswiththeprocessingflowoftheoilinPetromidia
Refinery.Atthesametime,theprogramwasstructuredtoprovidespecificknowledge
assimilationoftheprocessofrefining,themaincontrolparameters,securityissues
andoccupationalsafety,environmentalprotection,butalsotheworkinDAVfacilities
(atmosphericandvacuumdistillation),DGRS(GasDesulphurizationandSulphur
Recovery)andwaterstripping.
Rompetrolhadthesameconsistentapproachintermsofeducationanddevelopof
theyouthskillsthroughtheirinvolvementinactivitieswithintheGroupcompanies.In
2011,onthePetromidiaplatform,RompetrolRafinare,RompetrolPetrochemicalsand
Rominservhavedevelopedseveralprogramsfortheselectionofpotentialstudents,
providingthemwithanorganizedframeworktoimproveprofessionaldevelopmentskills
needed.
Internship 2011
2011wastheninthconsecutiveyearinwhichtheRompetrolGrouphasorganized
andconductedthisprogramdedicatedtofreshgraduatesoftechnicaluniversities
orhigh-schools.Theprogramconsistedofactivepracticewithinthecompany,for2
months,finalizedwithanassessment,basedonwhichapartoftheparticipantswere
selectedforthe“Trainee”program.Theprogram,thattookplacebetweenAugust–
September2011,included39studentsfromfiveuniversitycenters(Constanţa,Cluj,Iași,
Bucharest,Ploiești).
11,000hoursoftraining
more then
76 AnnualReport2011
Trainee Program 2011
TheTraineeProgramrepresentsthefinalselectionstageofthemostcompetent
participants.Itsdurationisof6months,fromOctober01,2011throughMarch31,2012,
periodduringwhichtheselectedstudents(12withsecondarystudiesand14with
advancedstudies)hadthepossibilitytoputtheirknowledgeintopracticeinvarious
departmentsonthePetromidiaplatform.Thisexperiencewasfollowedbyafinal
performanceassessmentandhiringthebestintheorganizingcompanies.
TheCostsoftheTraineeandInternshipprograms(salaries,accommodation,and
transport)arefullycoveredbyTRG.During2002–2011,400graduatesofsecondaryand
advancedstudiesattendedtheseprograms,outofwhich111peoplestartedtheircareer
withinthecompany.
Workplace health and safety
TRGpriorityin2011wastocontinuetoprovideasafeworkingenvironmentforbothits
employeesandcontractors.
Withregardtooccupationalhealth,theconcernsoftheGroupfocusedonthehealthof
theworkersthroughtheaccesstomedicalservicesthatmeetthelegalrequirementsand
thehigheststandardsofmedicalpractice.
Recognizingtheimportanceofthehealthofouremployees,wehaveensuredthatall
staffisfitphysicallyandmentallyfortheperformanceofjobduties.Byacontinuous
monitoringofallprocesses,whilepermanentlyassessingthehealthriskrelated,an
adequateperformanceofallspecificactivitieswascreated.
Thisyear,thetrainingandawarenessactivitieswerecontinuedforemployeesand
contractorsandinvolvedsafeactivities,proceduresandpoliciesbytheGroup.
Thetraininginhealth,safetyandemergencysituationsamounted29,376hoursof
training.PetromidiaandVegarefineriescontinuedactionstoincreasesafetycultureby
maintainingtheprogramdevelopedwithDuPontSafetyResources.
In2011TheRompetrolGroup’semployeesincreasedtheirinvolvementinthe
identificationandeliminationofallunsafeactionsandconditionsintheworkplace.
Theperformanceindicatorswereimproved,andadecreaseby0.5(from3.00to2.50)
comparedtothetargetobjectivesfor2010(incidentrate,frequencyofcasesresultingin
disability,ratefrequencyandseverityofaccidents,incidentsrateauto)beingregistered.
-2010 -2011
Main indicators on work health and security
Neconformitaticonstatate
Neconformitatirezolvate (inchise)
Inspectii/Auditurisafety
Exercitii situatiide urgenta
0
2000
4000
6000
8000
10000
5706
9131
5706
2485
86157836
1383 1387
400graduatesattendedourtraineeprograms
Corporate Social Responsability
77
Regarding2012,RompetrolGroupaimstodecreasewithanother0.5(from2.50to2.00)
theperformanceindicatorsagainsttargetobjectivesfortheyear2011.
Social Causes supported by Rompetrol employees
TheRompetrolGroupemployeesaredeeplycommittedtoconductingbusinessina
sociallyresponsibleandethicalmanner,puttingtheireffortstocontinuallyimprovethe
company’sperformancesandbestpractices.Thus,2011representedanewopportunity
forcommunityprojectsdevelopedbytheemployees–WorldTheatreDaycelebrated
onMarch27anddedicatedtochildrenfromorphanages,InternationalChildren’s
Day–markedbytoysandclothescollectionanddonatedtoimpoverishedkidsfrom
Dâmboviţacounty.
The CSR Objectives for 2011 were:
— Communityleadershipandcivicinvolvementactivities;
— Improvingthequalityoflifeinthecommunitiesweimpactorinfluencethrough
environmental,publichealthandeducationalprojectsdevelopedaspartoftheCSR
platform“Energycomesfromtheheart”;
— Youtheducationandpromotingapro-active,entrepreneurialspirit;
— PromoteresponsiblebehaviorofRompetrolemployees,byencouraginginternal
socialinitiativesandbylaunchinganinternalCSRprogram“Lucrurilemicicare
conteaza”(Smallthingsthatmatter).Theprogramwouldfocusontheenvironment
protection,healthcareandeducationandwouldinclude,amongothers,paper
recycling,blooddonationsandeducationalactivities.
-2010 -2011
Performance indicators in work and health security
Incidentrate
Frequencyof incidentswith workincapacity
Total rateof registered
incidents
Frequencyrate
Severityrate
Rateof incidents
causingdeath
0.0
0.5
1.0
1.5
2.0
2.5
3.0 2.93
1.011.29
0.51
2.05
1.29 1.29
0.51 0.51 0.51
0.00 0.00
0.5decreaseoftheperformanceindicators
78 AnnualReport2011
Marketing,CorporateGovernance&FinanceAttheendof2011TheRompetrolGroup(TRG)comprised
42commercialcompanies–jointstockorlimitedliabilitycompanies
–havingtheirheadquartersin12countries.
Corporate Governance & Finance
integration & strenght
80 AnnualReport2011
Inanindustryconstantlyfacingchallengesandopportunities,Rompetrolmanagedto
maintainapowerfulimageonthemarketandfindnewwaystopromoteitsproductsand
services.
Amongthedirectionsthecompanytookin2011,oneofthemostnotableistowards
socialmedia,whichhasshownaconsistentincrease.
Thus,togetherwiththeRompetrolCSRplatform,“TogetherforEachandEveryone”,the
marketingandcommunicationdepartmentfocusedonatransparentstrategy,meantto
establishaconnectionwithourcurrentandpossibleclientsviaonlinechannels.Through
social-media,Rompetrollistenstopeopleneedsandexpectationsmakingtheutmost
possibletotransformitintoreality.
Likeeveryyear,importantstepsweremadetowardstheupkeepofthecompany’sbrand
awareness.Asaresult,RompetrolwasawardedtheConsumerSuperbrandAward2011.
Superbrandisgiventothemostpowerfullocalcompanies,accordingtocorporate
brandpopularity.
Anotherpointofemphasisforthecompanywasthecampaigntopromoteitsfuels,
2011beingnoteworthyyearinthisdirection.RompetrolwontwoEffieawards(themost
prestigiousawardintheRomanianadvertisingindustry),SilverandGold,bothforthe
Efixfuelviralcampaign.Thecampaign,focusingonthehumoroussideoftheRomanian
traditionallife,hasproventobethemostpopularinitiativeofsuchkindin2011,withover
500,000viewsonYoutube.comalone.
Efix–ThisisthefirstfuelbrandofTheRompetrolGroup,bothfromthepointofview
ofthetimewhenitwaslaunchedonthemarket,andofitssalespercentage,providing
engineprotectionandconsumptionsavingstotheconsumers.Efixispresentinfour
countries:Romania,Moldova,GeorgiaandBulgaria.
Fill&Go–Thisisthebrandofservicesofferingcustomersthepossibilitytobuyfuelsand
otherproductsfromstationsfortheirpersonaluseorforthecompanytheyworkfor.The
businesssegmentrepresentsthehighestpercentageofthebrandsales.Thebrandis
offeredtothebusinesssegmentin4countries:Romania,France,GeorgiaandBulgaria.
Alto101 / Alto 55–Altoisapremiumfuelline,especiallycreatedforthedriverswho
expectmaximumperformancesfromtheircars.Bothfuelsbeingarepreparedaccording
tothehighestqualitystandards,atPetromidiarefinery,havingahighoctane/cetane
number.Duetothehighpuritydegree,thefuelsensurecompleteburning,highcalorific
valueand,implicitly,lowerenginewearandtear.
Ecopark–Thisisanewconceptandbrand,launchedandcommunicatedin2010by
EcomasterEcologicalServices,thewastemanagementcompanyofTRG.Ecoparkstands
fortheIndustrialEcologicalPark,developednearPloiesti,whichintegrates3services
Marketingin2011–TRG
Business Development
81
fromthecompanyplatform:Collect–Treat–Deposit,inorder
toprovideacompletewastemanagementtotheRomanian
hazardouswastegenerators.
Eurobitum–Arangeofmodifiedwithpolymersroadtypes
ofbitumenfromRompetrol.Theproductshaveresistance
andreliabilitymuchovertheusualroadbitumen,usedin
manufacturingasphaltmixtures,andthusprovedawarranteefor
durabilityoftheasphaltcovering.Eurobitumwaslaunchedin2007,
afteraUSD7millionworthinvestmentforbuildingthefirstunitof
roadbitumenmodifiedwithpolymersinRomania,itsbasisbeing
atechnologyofitsownofthebitumenenrichmentwithpolymers.
Researchhasbeendone,thatprovedthatbyapplyingthisprocess,
theroadbitumengains:
— Increasedresistancetotemperaturevariations;
— Longlifeperiod;
— Betterresistancetodeformationsandwear;
— Capacitytoreducethenoiseintraffic.
Propane Power Station–Itisanenergyunit,basedonpropane
fromthecompanyRompetrolGas,especiallydesignedfor
professionalusers,butalsoforhomeusers,whichprovidesan
integralindependencefromotherenergysources,anincreased
permanentyield,whichismultifunctionalandensuresan
unpollutedenvironmentwithminimalmaintenancecosts,
becausetheunitdoesnotcontainimpuritiesandcorrosive
elements.ThePropanePowerStationsystemcouldbeusedfor
sourcingconsumingdeviceswithmultipleapplications–itcould
becomposedofoneormorepropanetanks,dependingonthe
necessaryamountofenergy.
Injection Solutions, Extrusion Solutions, Blow Solutions
In2007,RompetrolPetrochemicals–theonlypolypropylene
andpolyethylenemanufacturerinRomaniaandoneofthemost
dynamicandinnovativedistributorofpolyolefinproducts–has
repositioneditselffromarawmaterialsproducerintoapartner,
offeringintegratedsolutions,adaptedforitscustomers.This
newstrategymeantaprocessofcustomers’knowing,ofthe
companynecessitiesandpossibilitiesinordertofurthercreate
adaptedsolutionsandofferconsultancyandtechnicalsupport.
Thus,providingefficientsolutionsforeverymethodofprocessing
(InjectionSolutions,ExtrusionSolutions,BlowSolutions),the
companyhadreadaptedandreorganizeditsproductsportfolio
inaccordancewiththemarketdemandsandhadpositioneditself
asareliablepartnerforthecompanies,manufacturersofplastic
masses.Solutionsofferedforcustomersarebasedbothonitsown
productionandonimportedproducts,everythingdependingon
thecustomers’needsanddemands.
Carflux–UsingtheRompetrolRafinareexpertiseinfuels,
Rompetrolhascreatedin2010arangeofengineadditives,
meetingthedrivers’needs.SpeakingaboutgasolineorDiesel,
aboutprotection,power,clearing,reductionoffuelconsumption
oraboutlowtemperatures–theCarfluxrangerepresentsthe
solutionforimprovingtheengineperformancesandprolonging
itslifetime.
Euroizolir–Acompleterangeofproductsforwaterproofing,on
bitumenbasis,containingbitumenmembranes,bitumenshingles,
asphaltcardboardandbitumenprimers.
Vegasolv 509–representsthefirstproductfromafuturerangeof
solventsandlacquers.Vegasolv509isasolventforpaints,enamels
andprimersonoilandalkydresinsbasis.Thissolventisaproduct
basedonwhite-spirit,anadvantagereflectedinitsevaporation
grade.Italsohelpstheefficientpaintmixing,whichlayseasily,
itdegreasesandisalsousedformaintenanceofpainting
equipment.
Car Glance–ItistheRompetrolbrandforthewindshieldfluid
availableinourowngasstationsnetwork.Developedin2008,
theproductcontainsanionicsurfactantsprovidinganefficient
clearing,protectingthewashingsystemagainstcorrosion,in
winterversion–downto-20ºC.
Ardent and Ultrafoc–Twoproductsofthesameutility,namely
liquidforfirelighting,buthavingdifferentdestination.Ardentis
idealforbarbecuesandchimneys,whileUltrafocisrecommended
forfirelightinginheatingsystemsbasedonsolidfuelandfor
fillingilluminatinglampsbasedonliquidfuel.Bothproductsare
recognizedfortheiradvantageofbeingarapid,easyandclean
solution.
Ecomaster–Supplierofintegratedservicesintheareaof
industrialwastemanagement,providingserviceslikePlan,Collect,
Treat,Deposit,Clear.
2011
2
ConsumerSuperbrand
Award
EffieAwards
82 AnnualReport2011
Administration and decisional rightThemajorshareholderoftheGrouphasaunifiedmanagementsystem.TheTRGBoard
ofDirectorshassixmembersoutofwhichoneexecutive(theExecutiveManager–CEO)
andfivenon-executivemembers.TheExecutiveManagerisresponsible,inaccordance
withtheArticlesofAssociation,fortheeverydaymanagementofthecompanyandits
subsidiaries.OthermembersoftheBoardofDirectorsareresponsibleforthegeneral
policyofthecompanyandforsupervisingthemanagementposition.
Inordertosupportitsactivities,theBoardofDirectorsisinchargewithfounding
specializedcommitteeslikeAuditCommitteeorRemunerationCommittee.
TheExecutiveManagermaydelegatehismanagingfunctionforcertainoperations/
groupsofoperationstocertainthirdparties.So,attheTRG’slevelthereareDeputy
ExecutiveManagersspecializedindifferenttypesofactivitiesoftheGroup.
AtthelevelofthecompanieswithintheGroupthemanagementcanbecarriedoutin
dual/unifiedsystemandthemajorityofcommercialcompanieshaveimplementedthe
unifiedmanagementsystem.
Thedecisionalrightuponinternaloperationsofeverycompanyisdividedondifferent
decisionallevels:ExecutiveManager,BoardofDirectorsandShareholders’GeneralMeeting.
Main performances and achievements in the sphere of Corporate Governance in 20112011wasayearfullofeventsfromtheCorporateGovernancepointofviewatthe
Group’slevel.Thelistofmostsignificantperformancesincludes:
TheprocessofrestructuringS.C.RominservS.R.Lwasinitiatedandfinalized,the
mostimportantnon-corestructurewithinTheRompetrolGroup.Theprocessmeanta
partialdivisionthroughoutsourcingforthebenefitofthecompanytheactivitycarried
outbytheworkingpointRominservValvesIaifoZalau,leadingtothefoundationofa
newentityS.C.RominservValvesIaifoS.R.L.thatrepresentedthecreationofpremises
forowningandaffectingtheassets,necessaryforcontractingindustrialconstruction
andmanufacturingandsellingofmetallurgicalproducts.Alsowithintheframework
ofRominservrestructuringtheBulgarianSubsidiarywasdissolved,theprocessbeing
finalizedon23.12.2011.
MergeroftheJointCompanyRompetrolMoldovaS.A.withtheJointCompany
MoldintergazS.R.L.On12.09.2011theprocessofreorganizationofthecompaniesfrom
theRepublicofMoldovahasbeenfinalizedthroughmergerbyabsorptionofboth
mentionedcompanies.TheabsorbedcompanywastheJointCompanyMoldintergaz
S.R.L.andtheJointRompetrolMoldovaS.A.wasitssuccessorinrightsandobligations.
General dataCorporateGovernanceprovides
coherentinformationconcerningthe
frameworkinwhichTheRompetrol
Group(TRG)activatesatoperational
andmanaginglevel,thusensuring
thetransparencyofallactivities.
Attheendof2011TheRompetrol
Groupcomprised42commercial
companies–jointstockorlimited
liabilitycompanies–havingtheir
headquartersin12countries.
RegulationsofArticlesofAssociation
applicabletothesecommercial
companiesarethelocalones.
InRomaniathemainapplicable
regulationsaretheLaw31/1990
aboutcommercialcompaniesand
theLaw297/2004concerningthe
capitalmarket(incaseofcompanies
listedonthestock-exchange).
Thecompanieswithin
TheRompetrolGroupare
administratedinaccordancewith
theprovisionsoftheirownArticles
ofAssociationandprovisionsofany
otherrelevantdocuments.
ShareholdersThesoleshareholderof
TheRompetrolGroupN.V.is
KazMunayGasPKOPInvestmentsB.V.
(KMG),headquarteredinAmsterdam,
Holland.
CorporateGovernance
Corporate Governance & Finance
83
Development directions and tendencies in 2012 and for the nearest futureTheRompetrolGroupwillcontinue
implementingstandardizationin
thefieldofCorporateGovernance
throughadoptingaseriesof
documentsandstandardsofinternal
procedures,rules,policiesand
regulationsinaccordancewiththe
bestpracticesinthefield.
RompetrolTurkey–TRGPetrolTICARETAnonimȘirketi–anewCompanyoftheGroup
wasfoundedinNovember2011,itsmainobjectofactivitybeingthetransporting,
distribution,exportingandimportingofpetroleum,chemicalandpetrochemical
products.ThefoundationofthiscompanyisapartoftheGroup’sstrategyinrespectto
theexplorationofnewfullyexpandingmarkets.
ThecompanyByronShippingS.R.L.wasregisteredinFebruary2011inConstanta.
Serviceactivitiesforwatertransportationarethemainobjectofactivityofthisnew
company.
EntrepotPetrolierdePortlaNouvelleisanewentityfoundedinFranceinJuly2011.
Dyneffowns50%ofthecompanyanditsmaindirectionsofactivityarearrangingand
operatingofastoragedepotforpetroleumandderivedproductsinPort-la-Nouvelle,as
wellasthedevelopmentofthedepot’sactivityandidentification,purchasing,owning
andthemaintenanceofgroundfields,installationsandmeans,necessaryforthe
operationofthestoragedepot.
Important achievements within the framework of integration processIn2011theintegrationprocessofTRGinKMGcontinuedthroughtheadoptionand
implementationattheGroup’slevelofanumberofprocedures,policiesandregulations:
Human Resources:theProcedureofAssessmentofJobDescription,theProcedure
ofRecruitingandSelectionandtheInductingProcedure,theProcedureofCostsand
Benefits,theTrainingProcedure,theRelocationProcedure,theProcedureofDisciplinary
MeasuresandtheProcedureofthePositionAssessment.
Finance:theHedgePolicy,RulesofCoordinating,ApprovalandMonitoring
ExpendituresofCapitalwithinTheRompetrolGroup,theMethodofMateriality,the
PolicyconcerningtheAccrualAccounting,theProcedureofPerformance’sManagement
andthePolicyandRegulationofCorporateAudit.
Administrative:theProcedureofOfficialTripsforJobPurposes,theProcedureof
Documents’Management(Secretariat)andtheInsurancePolicy.
Development of commercial operations and activities specific for Corporate GovernanceIn2011thesellingandliquidationofsomebusinessunitstookplacewithintheTRG’s
restructuringprogramasfollows:
— SellingofS.C.RominservicesThermS.A.On27.01.2011thesellingofthesharesowned
byRompetrolS.A.(1,111%)andS.C.RominservS.R.L(65,556%)atRominservicesTherm
S.A.toS.C.C&CWealthManagementS.R.L.wasfinalized.
— FinalizeactivitiesofRompetrolUpstreamInternationalLtd(RUI).Thesharesownedby
TheRompetrolGroupN.V.(100%)atRUIweresoldtoRaduMihailon14.07.2011;
— LiquidationofthecompanyContrastS.R.L.During2011theprocedureofvoluntary
dissolvingandliquidationofthecompanyContrastS.R.L.wasfinalized–acompany
owned100%byS.C.RompetrolDownstreamS.R.L
42commercialcompanies
84 AnnualReport2011
85
Introduction
In2011TheRompetrolGroup(the“Group”,“TRG”)anditssubsidiariesengagedinall
aspectsofthepetroleumindustry.Itscoreoperationsareinthedownstreamsegment,
throughitscompetitivePetromidiarefineryandstrongretailoperationsinRomania,
aroundtheBlackSeaandinSouthofFrance.TheGroupcontinuedtopursueits
strategyofdevelopingitscorerefininganddistributionoperations,despiteaworsening
economicenvironmentandverylowrefiningmargin.
Strategy
In2011theGroupcontinuedthelargeinvestmentprogramtoexpandtherefinery’s
capacityandachievedarefiningutilizationratehigherthan2010with7.3%.Petromidia
hassuccessfullyconcludedinNovember2011theplannedshutdownandrestartworks
ontheproductionunitswithinthePetromidiaplatform,aswellastheintegrationof6
newinstallationsintheoperationalflow,withfocusonthecapacitygrowthprogram
oftherefineryupto5milliontonsofprocessedrawmaterialperyeartobefinalized
beginningof2012.
AsaresultofinvestmentsundertakentheGrouphasincreasedtheprocessingcapacity;
alsoachievedEURO5standardfor96%ofdieselproductionand60%gasoline
production;finalizedandputintouseatthebeginningof2009amarineoilterminal
ontheBlackSeacoastthatprovidesgreateroperationalandlogisticcapabilities,and
significanttransportationcostsavingsofoverUSD6/tone(outofwhichasavingofUSD
1.64/tonesincurredin2010and2011);completedlaunchofnewpetrochemicalproducts
andimprovedpetrochemicaloperationsefficiency;andincreasedmarketsharein
RomaniaandwithincreasedpresenceintheUkraine,Bulgaria,GeorgiaandMoldova.As
partofdevelopmentitsoperationalnetworkinUkraine,Rompetrolinitiatedtheprocess
ofacquiringapetroleumproductsdepotof9000cbmcapacityinIsmailregion.
Attheendof2011,RompetrolestablishedanewcompanyinTurkey,withthepurpose
ofenteringonTurkeypetroleumproductsmarketstarting2012.Untilthatmoment,the
companywillstartthesaleofpetrochemicalproducts.
ThroughitswhollyownedsubsidiaryMidiaMarineTerminal,in2009theGroupstarted
operatingitstradingplatformintheBlackSea–themarineterminaloffshorePetromidia
refinery,whichwasconstructedin2008.Theterminalservesasanimportanthubfor
crudetradingandbringssignificantsavingsinlogisticscostsfortherefinerycrude
supply.During2010and2011,theoperatingcostshavebeendecreasedbyanadditional
USD1.64/tonne,reachingacostofUSD2.28/tonnefor2011transactions.
For2012managementbelievesthatthefollowingwillenableittofurtherimprove
itsresults:thecompletionoftheRefineryExpansionProjectcorrelatedwiththe
developmentofitsretail/wholesalenetworkinRomania,TurkeyandUkraine;cost
reductionprocessinitiatedthroughthe2012budgetaryprocesstogetherwithan
enhancedbudgetexecutionprocesstobefollowedduring2012;optimizationofits
AnalysisoftheFinancialResults
EURO 5standardfor96%ofdieselproductionand60%gasolineproduction
86 AnnualReport2011
capitalstructureandoperationalstructure.Themanagementbelievesthatthese
developmentswillresultinanenhancementoftheGroup’sabilitytosupportits
continuingoperations,despitethechallengesofthefinancialcrisis.
Thedecisiontoemergeonanewmarketwastakenintheviewofincreasedprocessed
petroleumproductsfollowingthecapacityenhancementprogramforthePetromidia
Refinery.
Business Environment
AverageBrentpricein2011(USD111.29/bbl)hasincreasedby40%ascomparedto
2010(USD79.5/bbl).Theoveralltrendin2011wasincreasingfromUSD93.7/bblatthe
beginningoftheyeartoUSD106.51/bblasoftheendoftheyear,withahighofUSD
126.64/bblrecordedonApril11th,2011andalowofUSD93.7/bblonJanuary4th,2011.
TheUralsdiscounttoBrenthasbeenonaverageatUSD1.65/bblahigherlevelcompared
withUSD1.34/bblasof2010,withahighestlevelofUSD3.47/bblon28ofApril2011and
aclosinglevelofUSD0.14/bblasoftheendof2011.
Averagegasolinecrackingmarginin2011wasatUSD135.8/mt(asof2010wasatUSD
127.58/mt)reachingitshighofUSD182.26/mtinAugust2011.Averagegasolinecracking
marginin2011was6%higherthanin2010.
Dieselcrackingmarginshaveincreasedin2011,startingfromUSD89.71/mtasof
December31.2010tillUSD123.29/mtasofDecember31,2011.Averagedieselcracking
marginin2011wasUSD115.37/mt,(asof2010wasatUSD80.63/mt),reachingitshighof
USD151.55/mtinAugust2010.Averagedieselcrackingmarginin2011was43%higher
thanin2010.
Although2011averagegasolinecrackingmarginwasalmostUSD21higherthanaverage
dieselcrackingmargin,thetwoquoteshavebeenalternativelyhigher.ThusMarch
andOctobertoDecember2011werethemonthsthatmarkedtheupperlevelofdiesel
comparingtogasolinequotes.
BytheyearendRomanianRONdepreciatedbyalmost4%againstUSDandby1%against
EUR,whileaverageexchangerateRON/USDhasincreasedby4%andRON/EURhas
decreasedby1%.In2011bytheyearendUSDstrengthenedagainstEURby3%.
2011 2010
BrentDated USD/bbl 111.29 79.50
UralMed USD/bbl 109.60 78.16
Brent-UralDifferential USD/bbl 1.65 1.34
PremiumUnleaded50ppmFOBMed USD/t 978 729
DieselULSD50ppmFOBMed USD/t 957 682
RON/USDAverageexchangerate 3.05 3.17
RON/USDClosingexchangerate 3.34 3.20
RON/EUROAverageexchangerate 4.24 4.21
RON/EUROClosingexchangerate 4.32 4.28
USD/EUROClosingrate 1.29 1.34
InflationinRomania 3.13% 6.09%
Corporate Governance & Finance
87
During2011,crudeoilmarketscontinuedtheirvolatileevolutionstillaffectedbythe
LibyandropinoutputandreturningfearsoverIraniandisputewithEUauthorities.
AnunexpectedturnwasthesteadyincreaseofUralsquotations,resultinginpositive
differentialstoBrentDatedduringNovemberandfirsttwodecadesofDecember.
Comparedtolastyear,quotationsregistereda26%increaseforBrentand28%forUrals
withQ4averagearound109.5USD/bblforbothgradesandBrent/Uralsdifferentialunder
0.25USD/bbl.
Ontheproductside,gasolinecracksplummetedfromover130USD/mtinOctober
toaround85USD/mtaverageinNovemberandDecember.Thiswasthedirect
consequenceofacombinationbetweensinkingdemandandoversupply.
Financial Results
Theconsolidatedaccountsarefullydisclosedinthenextchapterofthisreportand
furtheranalyzedinthefollowingsectionsforeachbusinessunit(figuresinUSDmillion).
2011 2010
Netrevenues 6,886.02 5,070.66
Grossprofit 348.00 363.41
Capex 249.59 226.60
TheincreaseofGroupNetrevenuesin2011comparedwith2010washighlyinfluenced
bythehigherpetroleumproductssellingpricesfollowingtheproductsquotations.
Increasedcrackingmarginsleadtohigherrefiningrevenuesin2011against2010.A
secondfactorwhichinfluencedtheenhancedrevenueswasthehigherproductionof
gasolineanddieselproducts(11%forgasolineand12%fordiesel).
2011 Refining Retail Trading Non-Core and Others
Consolidating Adjustments
Consolidated
Netrevenues 756.93 4,615.63 1,447.04 66.18 0.24 6,886.02
Grossprofit (48.06) 321.95 30.97 64.18 (21.03) 348.00
Capex 203.44 16.15 3.22 39.18 (12.40) 249.59
2010 Refining Retail Trading Non-Core and Others
Consolidating Adjustments
Consolidated
Netrevenues 572.54 3,488.49 900.34 109.30 – 5,070.66
Grossprofit 7.74 299.44 21.42 57.32 (22.52) 363.41
Capex 184.41 19.77 0.47 27.41 (5.47) 226.59
88 AnnualReport2011
Analysis Of Operations
Refining & Petrochemicals
Petromidia Refining 2011 2010
Feedstockprocessed Kt 3,896 3,507
Gasolineproduced Kt 1,116 970
Diesel&jetfuelproduced Kt 1,474 1,308
Motorfuelssales–domestic Kt 1,362 1,283
Motorfuelssales–export Kt 1,225 1,060
Export % 47% 45%
Domestic % 53% 54%
Grosscashrefinerymargin USD/bbl 4.2 4.75
Theincreaseof46%ingrossrevenuescomparedwiththesameperiodlastyearismainly
theresultofhigherinternationalquotationsforpetroleumproductsandhighersalesof
products,mainlyfuels.
InQ42011therefiningaveragemonthlythroughputwashigherby18.4%thaninQ4
2010,whentheactivitywasaffectedbytheplannedshutdown(startingwith20thof
September2010therefinerywasshutdownfor43daysforgeneralturnaround).Forthe
year2011therefiningaveragemonthlythroughputwashigherby11%comparedby2010.
In2011therefiningcapacityutilizationratewas80.2%by3%higherthanin2010when
therefiningcapacityutilizationwas77.56%andtherefinerywasshutdownfor43days
forgeneralturnaround.
RegardingVegarefinery,inQ42011totalfeedstockwashigherby18%thanthesame
periodin2010andhigherby9%in2011comparedto2010.Thegoodresultsaredueto
maximizeproductionofvaluableproducts:theproductionofn-hexaneincreasedby
47%,whitespiritproductionincreasedby87%andtheproductionofbitumenincreased
by24%inthelastquarterof2011comparedto2010.
In2011theproductionofn-hexanewashigherby47%,whitespiritproductionincreased
by129%andtheproductionofbitumenwashigherby45%.Year2011wastheyearwith
thelowesttechnologicalconsumptioninthelastsevenyears.
RompetrolRafinarecontinuedtobeanimportantcontributortoRomania’sfiscalbudget
withover1.2billionUSDin2011.
RompetrolRafinarestartedthelastphaseofitscapacityincreaseprogramforthe
PetromidiaRefinery,from3.8milliontons,toover5milliontonsofprocessedraw
materials.
Therefinery’scapacityincreaseinvestmentprogramwillbefinalizedatthebeginning
ofQ22012,andwillallowtheconsolidationanddevelopmentofRompetrol’spresence
inCentralandWesternEurope,inRomania,Bulgaria,RepublicofMoldova,Ukraineand
Georgia,wherewehaveRompetrolgas-stations,aswellasincountriessuchasTurkey,
SerbiaorGreece.
1.2billionUSDcontributiontoRomania’sfiscalbudget
Corporate Governance & Finance
89
Petrochemicals 2011 2010
Propyleneprocessed Kt 119 107
Ethyleneprocessed Kt 103 72
Soldfromownproduction Kt 217 175
Soldfromtrading Kt 12 20
Totalsold Kt 229 195
Export percent 61% 55%
Domestic percent 39% 45%
RompetrolPetrochemicalsgrossrevenuesreached355millionUSDin2011,by34%
highercomparedwiththesameperiodlastyear.Theincreaseingrossrevenuesisthe
resultofhigherinternationalquotationsforpetrochemicalproducts,aswellashigher
quantitiessold.
In2011versus2010,thecompany’sfinancialresultswerenegativelyinfluencedbylower
margins,mainlyduetounfavorablemarketconditions,followingtheconflictsinLibya,
thereforeEBITDAreached0.9millionUSD,lowercompared2010.
Thenetresultofthecompanywasnegativelyinfluencedbyanadditionalimpairment
provisionrecordedinDecember2011inamountof33.2millionUSD.
Theincreaseinthequantityofrawmaterialsprocessedin2011comparedwiththesame
periodlastyearistheresultofHDPEunitrestart,attheendof2010.HDPEunitrestartin
2010influencedthelevelofsales,leadingtoanincreaseby24%in2011againstthesame
periodlastyear.
In2011RompetrolPetrochemicalsimprovedtheaveragequalityofitsproducts,thus
theweightofhighqualityrated,polymersproductsreached98.1%comparedwithan
averageof96.9%inthe2010.
Inordertosupportthepetrochemicalactivities,thecompanyhasstartedthelastphase
ofmodernizationofthehigh-densitypolyethyleneinstallation,inviewoftheproduct
rangeexpansions,towhichfournewkindsofitemswereadded(largecontainers–up
to200l,thinfilm,pipegradePE100).TheprojectwillbefinalizedinApril2012when
technologicaltestsarescheduled.
RompetrolPetrochemicalsisthesolepolypropyleneproducerinRomania;in2010and
2011thecompanywasalsothesoleproducerofpolyethylene,giventheeconomic
circumstancesonthemarket,thusconstantlyincreasingitsmarketshare.Itsdynamic
developmentstrategyhassecuredthecompanyacompetitivepositiononthedomestic
andregionalmarkets–intheBalkansRegion.
TradingTheBusinessUnitTradinghasbeenstrengtheningitsroleofthesupplychainoptimizer
withintheGroup,continuingtoensureoptimumfunctioningconditionsforPetromidia
refinerybymovinganimportantpartoftheproductvolumesthatcannotbeabsorbed
onRomanianmarketorbyNear-AbroadsubsidiariestoNon-Groupdestinations.A15%
increaseinoveralloperatedtradingvolume(crude&productscombined)wasobtained
during2011comparedto2010.Demurragecostswerebroughttoaminimuminthelast
3years(lessthan1milUSDin2011comparedto2.8milUSDin2008).
Duetotheevolutionoffreightmarketleadingtoverylowlevelscomparedto2008,
managementofByronShippingLtdconsideredin2009endingtimechartercontracts
earlierandfocussingonspotmarket.Astheresult,Byroncarriedon2010onlyontime
355millionUSDgrossrevenues
90 AnnualReport2011
chartercontract,decreasingsignificantlytheshippingrevenuescomparedwith2009.
ThisalsoleadedtoasignificantlyreductionoflossesinByroncomparedwith2009,due
tomovementfromtimechartertospotvesselsbenefitingfromlowerfreightcosts.
MidiaMarineTerminalthroughtheCrudeOilTankFarminsuredsinceopeninginJanuary
2009costreductionsinrelationtooilsupplyofUSD6/tonne,byeliminatingthethirdparty
handling/storage/transfercostsandcommercial/technologicallosses.During2011,the
off-shoreoperatingcostshavebeendecreasedbyanadditional6%comparedwith2010.
Despitetheunfavourableeconomicenvironment,RompetrolUkrainemanagedto
increaseitsvolumessoldby112%during2011,achievinghighesthistoricalmonthly
volumeofsalesduringJuly2011.Ithasmanagedtoconsolidateits4thplaceasrankin
topUkrainianmarketRON95gasoline.
RetailDespiteprolongednegativeeffectofthefinancialcrisis,theRetailBusinessUnit
managedtokeepvolumesat2010level,slightlyabove,reachingatotalof4milliontons
ofproductssold.Mainhighlightsonkeyretailmarkets:
Romania:
— Gasoilandgasolinevolumessoldwere6%abovepreviousyear,meaningalsoagain
inmarketshareof0.8%,reachingat25.1%,intheconditionsofastablefuelmarket;
— EBITDA19%higherthanpreviousyear,reaching36.4mUSD;
— Significantimprovementofcreditindicatorsevolution,receivabledaysdecreasing
from29.2daysin2010to22.4daysinDecember2011.
France:
— NewmotorwaystationwasopenednearPamproux,,integratingmodernprinciples
ofdurabledevelopmentandenergeticefficiency,withanefficientmanagement
ofenergy,waterconsumptionandwastemanagement;
— ThePalombierstationwasawardedthe“BriocheDorée”awardforthequalityof
services,havingbeenincompetitionwith“bignames”likeTotal,Sodexho,Autogrill;
— Generaloil&gasdemandenvironmentwasmarkedbyasignificantdropinheating
oildemandduetoanexceptionallywarmyearinthesouthofFrance(-21%vs.2010).
Bulgaria:
— 5newstationswereopenedduring2011Volumesoldduring2011increasedby14%
comparedto2010sales,drivenbothbyretailandwholesalesegments,reachinga
9%marketshareinthewholesalesegment;
Moldova:
— FusionwithMoldintergazhasenabledRompetrolMoldovatopenetratetheLPG
marketinMoldova,acquiring4stationswhicharesellingexclusivelyLPG,located
mainlyinthenorthofthecountry;
— 12newgasstationsopenin2011,aspartoftheoverallgroupstrategyofnetwork
developmentinMoldova,whichhasbegunin2010;
Industrial Services and Other ActivitiesAllactivitiesnotdirectlyrelatedtotradingincrudeandoilproducts,refining,andsalesof
oilproductsaregroupedtogetherinIndustrialServices.
Duringfirstsemester2011,RompetrolLogisticsfinalizeditsrestructuringplanand
successfullyconcludedtheexternalizationofsecondarytransportationsegment.
EcomastersustaineditseffortsputintoGroup’senvironmentalprojects,demonstrating
thehighimportancegiventoecologicalfriendlysolutionstotheproductionand
distributionofoilproducts.DepositedquantityatEcoParkEcomasterreached9560tons.
4milliontonsofproductssold
Corporate Governance & Finance
91
Rominserv,theGroup’sengineeringcompany,hasincreaseditstechnicalcapabilities,
beingabletosuccessfullycompletecomplexprojectsatthehighestqualitystandards
andontime.Rominservisthegeneralcontractorforallupgradeprojectsintherefinery,
includingtheRefininginvestmentprogramofcapacityboostingandwhiteproducts
yieldsimprovement,tobefinalizedduringfirstsemester2012.
Rominservalsosteadilydecreasedmaintenancecostsin2010–2011despitematerialsand
energycostinflation.
RompetrolWellServicesincreaseditsRomanianactivitiesbyenhancingitscasing
runningservicesandextendingitscustomersportfoliowithadditionalcustomers;
outsideRomaniaactivitieswereextendedbylaunchingnewwellserviceoperationsin
BulgariaandHungary.
Drilling&mudloggingRomanianactivitieswerealsoimprovedbyextendingthe
customerportfolioandnewcapitalinvestmentsfinalization,whiledrillingrevenuesfrom
outsideRomaniaoperationsdroppedconsiderablyduring2011generatedbyLibyan
Branchduetothecivilwar.RompetrolGrouprestartedthedrillingservicesinLibyaatthe
endof2011andbeginningof2012.
RestructuringDuring2011,theGrouphasfurtherdefinedtherestructuringplan.DuringJanuary2011
theGroupdisposeditsinterestinRomiservicesThermS.A..In2011aspartofGroup’s
restructuringplan,RompetrolLogisticsfinalizedtheexternalizationofthesecondary
logisticsegmentafterexternalizationofprimarylogisticin2010fortheRomanianretail
andwholesalecompanies.During2012,theGroupintendstocontinuetherestructuring
oftheindustrialactivitiesandwillassesstheoptionstostreamlineitsstructure.
Financial Instruments And Risk Management
Financialinstrumentsinthebalancesheetincludeinvestments,tradereceivablesand
otherreceivables,cashandcashequivalents,short-termandlong-termdebts,tradeand
otherpayables.Theestimatedfairvaluesoftheseinstrumentsapproximatetheircarrying
amounts.
TheGroup’sactivitiesexposeittoavarietyofrisksincludingtheeffectsof:changesin
theinternationalquotationsforcrudeoilandpetroleumproducts,foreigncurrency
exchangeratesandinterestrates.TheGroup’soverallriskmanagementmainobjective
istominimisethepotentialadverseeffectsonthefinancialperformanceoftheGroup
companies.
Commodity Price RiskTheGroupisaffectedbythevolatilityofcrudeoil,oilproductandrefinerymarginprices.
Itsoperatingactivitiesrequireongoingpurchaseofcrudeoiltobeusedinitsproduction
aswellassuppliestoitsclients.Duetosignificantlyincreasedvolatilityofcrudeoil,the
managementdevelopedahedgepolicywhichwaspresentedtotheGroup’sBoardof
Directorsandwasapprovedinmostsignificantaspectsin2010andinamoreextensive
mannerinFebruary2011.Followingthisapproval,theGroupstartedonJanuary2011the
hedgeofcommoditiesheldbyRompetrolRafinare.Previously,untilJanuary2011,Vector
andDyneffweretheonlytwocompanieshavinginplacecommoditieshedgeprocess.
9,560tonsdepositedquantityatEcoParkEcomaster
92 AnnualReport2011
Accordingtothehedgepolicy,onthecommodityside,theflatpriceriskforpriced
inventoriesaboveacertainthreshold(calledbaseoperatingstock)ishedgedusing
futurecontractstradedonICEExchangeandsomeOTCinstrumentsforthebasisrisks.
Thebaseoperatingstockistheequivalentofpricedstocksthatareheldatanymoment
intimeintheGroup,hencepricefluctuationswillnotaffectthecash-flow.
Tradingactivitiesareseparatedintophysical(purchasefromthirdpartiesotherthan
KMG,andsalestothirdpartiesorIntercompany)andpapertrades(foreconomic
hedgingpurposes).Eachphysicaltransactioniscoveredthrougharelatedfutures
positionaccordingtotheexposureparameterssetbymanagement(i.e.basedon
physicalquantitiessoldorpurchased).TheGroupsellsorbuystheequivalentnumberof
futurecontracts.ThispapertradeisdoneonlytohedgetheriskofthePhysicalTradeand
nottogainfromthetradingoftheseinstruments.Asof2011,thenettradingposition
takingintoconsiderationtherealizedandunrealizedgainsandlossesonderivativesand
thephysicaltradewasanetgainof8.8millionUSD.
Interest Rate RiskInterestratepriceriskistheriskthatthevalueofafinancialinstrumentwillfluctuatedue
tochangesinmarketinterestratesrelativetotheinterestratethatappliestothefinancial
instrument.Interestratecashflowriskistheriskthattheinterestcostwillfluctuateover
time.TheGrouphaslong-termdebtandshort-termdebtthatincurinterestatfixedand
variableinterestratesthatexposestheGrouptobothfairvalueandcashflowrisk.
Foreign Currency Risk ManagementTheGroup'sfunctionalcurrencyisUnitedStatesDollar(“USDollars”)andcrudeoil
importsandasignificantpartofpetroleumproductsarealldenominatedprincipallyin
USDollars,thereforelimitedforeigncurrencyexposurearisesinthiscontext.Inaddition
certainassetsandliabilitiesaredenominatedinforeigncurrencies,whichareretranslated
attheprevailingexchangerateateachbalancesheetdate.Theresultingdifferences
arechargedorcreditedtotheincomestatementbutdonotaffectcashflows.Group
TreasuryisresponsibleforhandlingtheGroupforeigncurrencytransactions.
Capital Risk ManagementTheGroupmanagesitscapitaltoensurethatentitiesintheGroupwillbeableto
continueasagoingconcernwhilemaximizingthereturntostakeholdersthroughthe
optimizationofthedebtandequitybalance.ThecapitalstructureoftheGroupconsists
ofshareholdersloans,bankdebt,cashandcashequivalentsandequityattributableto
equityholdersoftheparent,comprisingissuedcapital,reservesandretainedearnings.
Overview
Tooffsetprolongednegativeimpactofdepresseddownstreammarket,Managementof
theGroupiscommittingthemselvestofurtherreducecosts,completemodernizationof
thePetromidiaRefinery,restructurethebusinessandconcentrateoncorebusiness,close
non-profitablebusinesses.Wewillfundourplansthroughamixofequityanddebt,with
asupportfromourshareholders.
TheaverageheadcountacrossGroupentitiesduring2011was7,530.Weemploy
bestpracticesforattracting,retainingandmotivatingouremployees,whoarethe
principalcontributorstothedevelopmentofourGroup.Wearefullycommittedtoour
responsibilitiesfortheirdevelopmentandforthecommunitiesinwhichweoperate.
8.8millionUSDnetgainofthePhysicalTrade
Corporate Governance & Finance
93
Planning and Performance Management (PPM)
Key 2011 PPM activities:
— Coordinationofthefiveyearsannualbudget,withsignificantshiftofset-upfrom
traditionalincrementalplanningprocesstowardsanactivity-basedone,given
assumptionsofratherprudentoperatingmargins;significantcostsreductionswere
consideredandimplemented
— Groupoperational&financialyearlyresultsimprovementprocess,startedbeginning
of4thquarter,whichleadtoimprovedGroupcostsmanagement
— Increasedsupportonmonitoringtherawmaterials&productsmassbalances,
whichcontributedtosignificantworkingcapitalimprovementbyoptimizedGroup
inventorieslevels.
— What-ifanalysismainlyonrefiningenvironment;makevs.Buydecisionsandmultiple
sensitiviesanalysis(e.g:refiningthroughput,productbasket,feedstockevalutation)
— IncreasedroleinMOPtargetsachievementviasupplychainoptimizationprocess
Main 2012 PPM initiatives for implementation along the year
on both supply chain & controlling areas:
— Rollingforecastprocess,amonthlyrollingplanningprocessforthenexttwelve
months.Itsgoalistobothcreateastructuredroutineofworkingoutsolutionsfor
meetingtheannualbudgettargetsandimproveforecastaccuracyonalargertime
frame,highlyneededincurrenteconomiccrisisperiod.
— Integratedplanningmodel,representingaGroupresultsplanningtoolbeingableto
receiveinputsonkeybusinessdriversfromallacrossthevalue-chainandtodeliver
onalternativebusinessscenariosGroupfinancialresultsforareal-timeassesmentof
besteconomicalsolutionstoundertake.
— ImplementingallmanagementreportingrequirementsinSAPCO(Controlling)
moduleofnewGroupERP-SAP,mainlyonSAPCO-OM(OverheadManagement)and
SAPCO-PA(Profitabiltyanalysis).
— SingleGroupmasterdatabaserepository,tocollectallrelevantbusinesskeydrivers
onbothpastandfutureperiod,ondaily,monthly,annual,timeframes,singleaccess
pointcoveringmostofthequantitativesideofentities&Groupmanagementteams
reports.
— ACorporatereportingdashboard(CORDA)aimingatdailyGroupkeyperformance
driversmonitoringonbothInternet&mobileadaptedplatformsonmainlyfollowing
areas:TRGGroupkeymajordrivers,marketdynamics,riskmanagement,supply/
production/inventories,sales&margins.
— Enhancedmargins&opexanalysisbyactionabledrivers(clientlevelprofitability,costs
drivers),assupportforanymanagementbusinessdecisions.
— Activebudgetcontrolprocedureaimingtooptimizethebudgetexecutionprocess
byensuringaproperapprovalflowforvalidatinganyupdatesonbudgeted
assumptionseitherfromtimingperspectiveorfromanynewassumptions
perspective.
— Furtheroptimizecurrentreportingpackage(GFO,MOP,MOPexecutionreports)on
planning&budgetingexecutionreportsbyincreasedfocusonactionablebusiness
driversanalysistoallowtheoptimumdataandanalysispackage,supportfor
operationaldecisions.
— Optimizedperformancemanagementprocessbytwomeans:a)aligning2012
operational&financialsetofKPIswiththenewfiveyearsbudgetobjectivesforall
eligiblepeople;b)implementingamonthlyroutineprocessofKPIsachivements
revision,toallowforcorrectiveactionsonallpotentialnegativegaps.
— Alignementofrefiningplanningtoolstonewrefineryproductionconfigurationand
productsspecifications
94 AnnualReport2011
Thesefinancialstatementshavebeenpreparedinaccordance
withInternationalFinancialReportingStandards(“IFRS”)effective
asofDecember31,2011,asendorsedbytheEU.
Theconsolidatedfinancialstatementsarepreparedunder
thehistoricalcostconvention.AnexceptionisforRompetrol
RafinareS.AandRompetrolPetrochemicalsS.R.L.whereproperty,
plantandequipmentarestatedatrevaluedamountsbeing
thefairvalueasat31December2003and31December2005
respectivelylessanyaccumulateddepreciationandaccumulated
impairmentloss,withacquisitionssubsequenttotheindicated
revaluationdatesbeingatacquisitiondatehistoriccost.The
financialstatementsoftheGrouparepreparedonagoing
concernbasis.
Thegroup’sconsolidatedfinancialstatementsarepresentedin
UnitedStatesDollar(“USDollar”or“USD”),whichistheGroup’s
functionalcurrency.Theconsolidatedfinancialstatements
comprisethefinancialstatementsoftheparentcompanyandits
subsidiariesasat31December2011.
ControlisconsideredtobeachievedwheretheGroup(either
directlyorindirectly),ownsmorethan50%ofthevotingrightsof
thesharecapitalofanotherenterpriseandisabletogovernthe
financialandoperatingpoliciesofanenterprisesoastoobtain
benefitsfromitsactivities.Non-controllinginterestsrepresentthe
portionoftheprofitorlossandnetassetsthatisnotheldbythe
Groupandarepresentedseparatelyintheconsolidatedincome
statementandwithinequityintheconsolidatedbalancesheet,
separatelyfromtheparentshareholders’equity.
Businesscombinationsareaccountedforusingtheacquisition
method.Thecostofanacquisitionismeasuredastheaggregate
oftheconsiderationtransferred,measuredatacquisitiondate
fairvalueandtheamountofanynon-controllinginterestinthe
acquiree.Foreachbusinesscombination,theacquirermeasures
thenon-controllinginterestintheacquireeeitheratfairvalue
orattheproportionateshareoftheacquiree’sidentifiablenet
assets.Acquisitioncostsincurredareexpensedandincludedin
administrativeexpenses.
Theinterestofnon-controllingshareholdersintheacquiree
isinitiallymeasuredatthenon-controlling’sproportionofthe
netfairvalueoftheassets,liabilitiesandcontingentliabilities
recognised.Businessesacquiredordisposedduringtheyearare
includedintheconsolidatedfinancialstatementsfromthedate
ofacquisitionortodateofdisposal.
TheGroup’sinvestmentsinassociatesareaccountedforusing
theequitymethodofaccounting.Undertheequitymethod,the
investmentinanassociateiscarriedinthebalancesheetatcost
pluspostacquisitionchangesintheGroup’sshareofnetassetsof
theassociate.Afterapplicationoftheequitymethod,theGroup
determineswhetheritisnecessarytorecogniseanadditional
impairmentlossontheGroup’sinvestmentinitsassociates.
Starting2011,Grouphasalsoinvestmentsinjointventurewhich
areaccountedusingtheequitymethod.Allintra-groupbalances,
incomeandexpensesandunrealisedgainsandlossesresulting
fromintra-grouptransactionsareeliminatedinfull.
Goodwillisinitiallymeasuredatcostbeingtheexcessofthe
aggregateoftheconsiderationtransferredandtheamount
recognisedfornon-controllinginterestoverthenetidentifiable
assetsacquiredandliabilitiesassumed.Goodwillistested
forimpairmentannually(asat31December)andwhen
circumstancesindicatethatthecarryingvaluemaybeimpaired.
Property,plantandequipmentarestatedatcost,exceptforthe
RompetrolRafinareS.Awheretheproperty,plantandequipment
arestatedatrevaluedamounts,beingthefairvaluelessany
accumulateddepreciationandaccumulatedimpairmentloss.
Whenassetsaresoldorretired,theircostandaccumulated
depreciationareeliminatedfromtheaccountsandanygain
orlossresultingfromtheirdisposalisincludedintheincome
statement.
Depreciationforproperty,plantandequipmentexceptlandand
constructioninprogressiscomputedusingthestraight-linemethod
overthefollowingestimatedusefullives,between3to60years.
AteachbalancesheetdatetheGroupreviewsthecarrying
amountsofitsproperty,plantandequipmentandintangible
assetstodeterminewhetherthereisanyindicationthatthose
assetshavesufferedimpairment.Ifsuchindicationexists,
therecoverableamountoftheassetisestimatedinorderto
determinetheextentoftheimpairmentloss(ifany).Whereitis
notpossibletoestimatetherecoverableamountofanindividual
asset,theGroupestimatestherecoverableamountofthecash–
generatingunittowhichtheassetbelongs.
Inventories,includingwork-in-processarestatedatthelower
ofcostandnetrealisablevalue.Netrealisablevalueisthe
sellingpriceintheordinarycourseofbusiness,lessthecostsof
completion,marketinganddistribution.Costcomprisesdirect
materialsand,whereapplicable,directlabourcostsandthose
overheadsthathavebeenincurredinbringingtheinventoriesto
theirpresentlocationandcondition.Thefollowingcostformulas
wereusedtodeterminethecostapplicabletodifferenttypesof
inventories:
— theweightedaveragemethodforpurchasedcrudeoiland
petroleumproducts
— thefirst-in-first-out(FIFO)forsuppliesandmaterials.
Summary of Significant Accounting Policies
Corporate Governance & Finance
95
Tradereceivablesarerecognisedinitiallyatfairvalueand
subsequentlymeasuredatamortisedcostusingtheeffective
interestmethod,lessprovisionforimpairment.
Cashincludescashonhand,cashwithbanksandchecksin
courseofbeingcashed.Cashequivalentsareshort-term,highly
liquidinvestmentsthatarereadilyconvertibletoknownamounts
ofcashwithinremainingthreemonthsorlesstomaturityfrom
thedateofacquisitionandthataresubjecttoaninsignificantrisk
ofchangeinvalue.
Revenueisrecognisedtotheextentthatitisprobablethatthe
economicbenefitswillflowtotheGroupandtherevenuecanbe
reliablymeasured.
Salesofgoodsarerecognisedwhendeliveryhastakenplace
andtransferofsignificantrisksandrewardshasbeencompleted.
Revenuecomprisesthefairvalueofthesaleofgoodsand
services,netofvalue-addedtaxandanyexcisedutiesandother
salestaxes,rebatesanddiscounts.
Revenuefromrenderingtransportationservicesandother
servicesisrecognisedwhenservicesarerendered.
Paymentstodefinedcontributionretirementbenefitplansare
chargedasanexpenseastheyfalldue.Paymentsmadetostate
–managedretirementbenefitschemesaredealtwithasdefined
contributionplanswheretheGroup’sobligationsunderthe
schemeareequivalenttothosearisinginadefinedcontribution
retirementbenefitplan.
Incometaxchargeconsistsofcurrentanddeferredtaxes.The
chargeforthecurrenttaxisbasedontheresultsfortheperiod
asadjustedfornon-deductibleandnon-taxableitemsThetax
ratesandtaxlawsusedtocomputetheamountarethosethat
areenactedorsubstantivelyenacted,bythereportingdate,in
thecountrieswheretheGroupoperatesandgeneratestaxable
income.Deferredtaxisprovidedusingtheliabilitymethodon
temporarydifferencesatthereportingdatebetweenthetax
basesofassetsandliabilitiesandtheircarryingamountsfor
financialreportingpurposes.
TheGroupdeterminatestheclassificationofitsfinancialassets
andliabilitiesatinitialrecognition.Financialassetsarerecognised
andderecognisedonatradedatewhereapurchaseorsaleof
aninvestmentisunderacontractwhosetermsrequiredelivery
oftheinvestmentwithinthetimeframeestablishedbythe
marketconcernedandareinitiallymeasuredatcost,including
transactioncosts.
Group’sfinancialassetsincludecashandcashequivalents,
tradeandotherreceivables,unquotedfinancialinstruments,
andderivativefinancialinstruments.Financialliabilities
includefinanceleaseobligations,interest-bearingbankloans
andoverdraftsandtradeandotherpayablesandderivative
financialinstruments.Foreachitemtheaccountingpolicies
onrecognitionandmeasurementaredisclosedinthisnote.
Managementbelievethattheestimatedfairvaluesofthese
instrumentsapproximatetheircarryingamounts.
FinancialassetswithinthescopeofIAS39areclassifiedas
financialassetsatfairvaluethroughprofitorloss,loansand
receivables,heldtomaturityinvestments,available-for-sale
financialassets,orasderivativesdesignatedashedging
instrumentsinaneffectivehedge,asappropriate.Financial
liabilitieswithinthescopeofIAS39areclassifiedasfinancial
liabilitiesatfairvaluethroughprofitandloss,loansand
borrowings,orasderivativesdesignatedashedginginstruments
inaneffectivehedge,asappropriate.
96 AnnualReport2011
Consolidated Statement of Financial PositionTheabbreviatedfinancialinformationisderivedfromtheConsolidatedFinancialStatementsasofandfortheyearended31December2011andshouldbereadinconjunctionwiththeseauditedConsolidatedFinancialStatements.Onthefullconsolidatedfinancialstatementsanunqualifiedauditopinionwasissued.
Abbreviatedfinancialstatements
December 31, 2011 December 31, 2010
Non-current assets
Intangibleassets 60,798,370 58,280,764
Goodwill 55,241,231 55,241,231
Property,plantandequipment 1,258,589,025 1,228,811,319
Availableforsaleinvestments 949,204 1,489,055
Investmentsinassociates 19,919,984 20,154,955
Interestinjointventure 19,566,950 –
Deferredtaxasset – 412,188
Long-termreceivable 14,259,033 16,438,263
Total non-current assets 1,429,323,797 1,380,827,775Current assets
Inventories,net 546,981,447 633,007,698
Tradeandotherreceivables 670,611,954 614,077,330
DerivativefinancialInstruments 5,690,146 –
Cashandcashequivalents 198,617,647 220,924,420
Total current assets 1,421,901,194 1,468,009,448
Total Assets 2,851,224,991 2,848,837,223
Equity and liabilitiesCapital and reserves
Issuedcapital 120,338 133,712
Sharepremium 2,631,512 2,631,512
Revaluationreserve 20,625,249 20,625,249
Additionalpaid-incapital 1,100,000,000 1,100,000,000
Effectoftransferswithequityholders 115,029,358 115,029,358
Retainedearnings (637,706,175) (487,528,262)
Currentyearresult (122,506,647) (151,120,945)
Translationreserve 1,415,028 (1,826,333)
Equity attributable to equity holders of the parent 479,608,663 597,944,291Minorityinterest (163,653,769) (47,844,946)
Total equity 315,954,894 550,099,345Non-current liabilities
Long-termborrowingsfromshareholders 896,000,000 896,000,000
Long-termborrowingsfrombanks 2,823,265 5,739,039
Netobligationsunderfinancelease 6,279,290 12,045,744
Deferredtaxliabilities 28,297,076 32,248,488
Provisions 31,038,241 38,828,654
Othernon-currentliabilities 2,034,794 7,846,356
Total non-current liabilities 966,472,666 992,708,281Current liabilities
Tradeandotherpayables 1,073,528,229 926,749,364
DerivativefinancialInstruments 1,206,201 5,183,543
Netobligationsunderfinancelease 3,232,603 7,563,095
Short-termborrowingsbanks 474,245,900 366,533,595
Short-termborrowingsshareholders 13,304,927 –
Provisions–currentportion 3,279,571 –
Total current liabilities 1,568,797,431 1,306,029,597
Total liabilities 2,535,270,097 2,298,737,878
Total Equity and Liabilities 2,851,224,991 2,848,837,223
Corporate Governance & Finance
97
Consolidated Income StatementTheabbreviatedfinancialinformationisderivedfromtheConsolidatedFinancialStatementsasofandfortheyearended31December2011andshouldbereadinconjunctionwiththeseauditedConsolidatedFinancialStatements.Onthefullconsolidatedfinancialstatementsanunqualifiedauditopinionwasissued.
Consolidated Statement of Comprehensive IncomeTheabbreviatedfinancialinformationisderivedfromtheConsolidatedFinancialStatementsasofandfortheyearended31December2011andshouldbereadinconjunctionwiththeseauditedConsolidatedFinancialStatements.Onthefullconsolidatedfinancialstatementsanunqualifiedauditopinionwasissued.
2011 2010
Continuing operationsRevenue 6,886,017,721 5,070,656,915
Costofsales (6,538,021,618) (4,707,251,055)
Gross profit 347,996,103 363,405,860
Sellinganddistributionexpenses (284,355,211) (273,290,874)
Generalandadministrativeexpenses (153,032,837) (159,783,303)
Otheroperatingexpenses/revenues,net (94,928,136) (31,482,778)
Operating profit/(loss) (184,320,081) (101,151,095)
Financecost (60,727,387) (62,920,106)
Financeincome 7,444,394 5,915,775
Netforeignexchangelosses 4,017,091 (10,173,427)
Shareofprofitsofassociates 669,103 553,824
Shareofprofit/(losses)ofjointventures (2,587,276) –
Loss before income tax (235,504,156) (167,775,029)
Incometax (2,144,681) (10,346,219)Loss (237,648,837) (178,121,248)
Attributableto:
Equityholdersoftheparent (122,506,647) (151,120,945)
Non-controllinginterests (115,142,190) (27,000,303)
2011 2010
Net loss for the year (237,648,837) (178,121,248)
Other comprehensive income
Exchangedifferencesontranslationofforeignoperations 3,227,987 (902,685)
Actuarialgains/(losses)relatedtodefinedbenefitplan 1,560,072 (2,448,866)
Total comprehensive income/(loss) for the year, net of tax (232,860,778) (181,472,799)Attributableto:
Equityholdersoftheparent (117,718,588) (154,472,496)
Non-controllinginterests (115,142,190) (27,000,303)
Consolidated Statement of Cash FlowTheabbreviatedfinancialinformationisderivedfromtheConsolidatedFinancialStatementsasofandfortheyearended31December2011andshouldbereadinconjunctionwiththeseauditedConsolidatedFinancialStatements.Onthefullconsolidatedfinancialstatementsanunqualifiedauditopinionwasissued.
2011 2010
Loss before income tax (235,504,156) (167,775,029)
Adjustmentsfor:
Depreciationandamortisation 137,917,092 130,977,627
Reservesforreceivablesandinventoriesandwrite-offs 40,450,969 12,394,016
Impairmentforpropertyplantandequipmentandintangibles 61,707,196 7,211,722
Otherprovisions (1,467,798) 11,740,763
Retirementbenefitchargedtoequity (610,241) –
Latepaymentinterest 3,383,986 11,590,236
Unwindingofdiscountonhybridinstrument – 1,084,943
Interestexpense,commissionandbankchargesandcollectiondiscounts 44,038,475 36,625,531
Interestexpenseshareholders 13,304,926 13,619,396
Financeincome (7,444,394) (5,915,775)
Netlossfromnon-currentassetsdisposalsandwrite-off (793,935) 517,671
Netresultfromsaleofinvestments (80,357) 423,382
Unrealisedlosses/(gains)fromderivativesonpetroleumproducts (2,546,174) 4,510,298
Realizedlosses/(gains)fromderivativesonpetroleumproducts 63,768,720 5,314,460
Shareofprofitsofassociates (669,103) (553,824)
Shareoflossesofjointventure 2,587,276 –
NetresultfromliquidationofGroupinvestments – 71,693
Unrealisedforeignexchange(gain)/lossonmonetaryitems 11,898,024 9,461,589
Operating profit before working capital changes 129,940,506 71,298,699
Networkingcapitalchangesin:
Receivablesandprepayments (72,664,535) (7,001,660)
Inventories 63,278,742 (144,363,352)
Tradeandotherpayables 118,252,526 89,687,402
Change in working capital 108,866,733 (61,677,610)
Incometaxpaid (6,360,659) (4,580,619)
Cashpaymentsforderivatives,net (71,201,395) (5,314,460)
Net cash provided by/(used in) operating activities 161,245,185 (273,990)
Cash flows from investing activitiesPurchaseofproperty,plantandequipment (227,077,317) (211,973,005)
Purchaseofintangibleassets (22,514,633) (14,609,004)
Changesinpayablesforcapitalexpenditures 28,128,184 39,818,676
Dividendsreceivedfromassociatedcompanies 75,477 279,269
Proceedsfromsaleofproperty,plantandequipment 1,165,955 1,961,762
Cashofsubsidiariesbeingdisposedoff (177,654) (240,707)
Proceedsfromliquidation/salesofsubsidiaries/investments 1,200,000 62,340
Cashofsubsidiariesbeingliquidated – (275,657)
Considerationpaidforacquisitionofminorityinterests (550,000) (126,436,203)
ConsiderationpaidforJointVenture (14,833,270)
Net cash used in investing activities (234,583,258) (311,412,529)
Cash flows from investing activitiesHybridpartialpayment – (71,024,745)
Couponpaidonhybridinstrument – (22,498,405)
Interestandbankchargespaid (51,105,824) (54,848,055)
Interestandotherfinancialincome 7,444,394 5,915,775
Drawingsoflongtermborrowingsfromshareholders – 300,000,000
Repaymentlongtermloansfrombanks (2,915,774) (4,614,532)
Movementinshort-termborrowings 107,712,305 122,209,280
Repaymentsoffinanceleases (10,103,801) (10,029,770)
Net cash from financing activities 51,031,300 265,109,548
(Decrease)/Increase in cash and cash equivalents (22,306,773) (46,576,971)Cashandcashequivalentsatthebeginningofperiod 220,924,420 267,501,391
Cash and cash equivalents at the end of the period 198,617,647 220,924,420
99
Consolidated Statement of Changes in EquityTheabbreviatedfinancialinformationisderivedfromtheConsolidatedFinancialStatementsasofandfortheyearended31December2011andshouldbereadinconjunctionwiththeseauditedConsolidatedFinancialStatements.Onthefullconsolidatedfinancialstatementsanunqualifiedauditopinionwasissued.
Issued capital
Sharepremium
Retainedearnings
Revaluationreserves
Additional paid-in capital
Effect of transfers with equity
holders
Translation reserve
Non-controlling
interests
Totalequity
December 31, 2010 133,712 2,631,512 (638,649,207) 20,625,249 1,100,000,000 115,029,358 (1,826,333) (47,844,946) 550,099,345
Netlossfor2011 – – (122,506,647) – – – – (115,142,190) (237,648,837)
Othercomprehensiveincome/loss
(13,374) – 1,560,072 – – – 3,241,361 – 4,788,059
Total comprehensive income
(13,374) – (120,946,575) – – – 3,241,361 (115,142,190) (232,860,778)
Dividendspayabletonon-controllinginterest
– – – – – – – (452,147) (452,147)
ChangesinGroupstructure–acquisitionofRompetrolGeorgianon-controllinginterests(Note5)
– – (617,040) – – – – 67,040 (550,000)
ChangesinGroupstructure–saleofRominservicesTherm
– – – – – – – (547,059) (547,059)
Otherchanges – – – – – – – 265,533 265,533
December 31, 2011 120,338 2,631,512 (760,212,822) 20,625,249 1,100,000,000 115,029,358 1,415,028 (163,653,769) 315,954,894
100 AnnualReport2011
IntroductionWehaveauditedwhethertheaccompanyingabbreviatedfinancialstatementsof
TheRompetrolGroupN.V.,fortheyearDecember31,2011havebeenderivedconsistently
fromtheauditedfinancialstatementsofTheRompetrolGroupN.V.,fortheyear31
December2011.Intheauditor'sreportdatedMarch1,2012issuedbyErnst&Young
AccountantsLLP,Amsterdam,TheNetherlands(signedbyJ.J.Vernooij),anunqualified
opiniononthesefinancialstatementswasexpressed.Managementisresponsibleforthe
preparationoftheabbreviatedfinancialstatementsinaccordancewiththeaccounting
policiesasappliedintheconsolidatedfinancialstatementsofTheRompetrolGroupN.V.
Ourresponsibilityistoexpressanopinionontheseabbreviatedfinancialstatements.
ScopeWeconductedourauditinaccordancewithInternationalAuditingStandards.
Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonable
assurancethattheabbreviatedfinancialstatementshavebeenderivedconsistently
fromtheconsolidatedfinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriate
toprovideabasisforourauditopinion.
OpinionInouropinion,theseabbreviatedfinancialstatementshavebeenderivedconsistently,
inallmaterialrespects,fromtheconsolidatedfinancialstatementsofTheRompetrol
GroupN.V.fortheyearendedDecember31,2011.
Emphasis of matterForabetterunderstandingoftheGroup'sfinancialpositionandresultsandthescope
oftheaudit,weemphasizethattheabbreviatedfinancialstatementsshouldberead
inconjunctionwiththefullfinancialstatements,fromwhichtheabbreviatedfinancial
statementswerederivedandtheunqualifiedauditor'sreportissuedbyErnst&Young
AccountantsLLP,Amsterdam,TheNetherlands(datedMarch1,2012).Ouropinionisnot
qualifiedinrespectofthismatter.
Ernst & Young Assurance Services S.R.L.
Bucharest,Romania
May18,2012
Auditor’sreport
Corporate Governance & Finance
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RompetrolStations
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Warehouses
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www.rompetrol .com