Matching supply to demand Rompetrol

Multinational Romanian oil giant Rompetrol has worked hard to gain its reputation for being ‘dynamic and innovative’ in a challenging industry. Emma-Jane Batey spoke to commercial director for Rompetrol’s petrochemical division, Mrs Dana Viju to see how this has been achieved.

MATCHING SUPPLY TO DEMAND

The global frustrations of 2008 and 2009 were certainly felt by multinational Romanian oil company Rompetrol, but the company expects a positive experience during the following years due to its investment programme and improved products and services, alongside the support of Kazakhstan National Oil Company, the majority shareholder since 2007.

With both downstream activities and upstream related services, the Rompetrol Group is truly a global company. Its headquarters are located in Amsterdam, operating in 12 countries and with the majority of its assets and operations based in Romania, France, Spain and south-east Europe. The group is active primarily in refining, marketing and trading, with addi-

tional operations in the oil industry such as drilling and workover and EPCM.

Rompetrol has over 30 years’ experience of specialised services of well drilling and workover services for crude oil and natural gas extraction in many traditional markets including the Middle East and Caspian Sea regions and focuses on upstream activities in Romania by controlling exploration and production licences for blocks Satu Mare and Zegujani and exploration for Gresu, Nereju and Focsani.

The retail unit operates a network of over 1300 filling station in Romania, France, Bulgaria, Spain, Georgia and Moldova, as well as a number of important depots at the Black Sea, Mediterranean Sea and Atlantic Ocean. Modern facilities

Commercial director for Rompetrol’s petrochemical division Mrs Dana Viju told Industry Europe more about the company’s extensive production capabilities. She said, “We have two refineries and one petrochemical plant in Romania, as well the only cryogenic terminal in the Black Sea. This gives us maximum flexibility in the supply chain as we do not have to rely on other refineries and we can store important quantities of polypropylene and ethylene. Our production and storage capabilities are expanding too, with the expectation that we will have 100,000 tonnes of HDPE and about 80,000 tonnes LDPE by the end of 2011.”

Rompetrol Petrochemicals has also planned to increase the capacity of the high density polyethylene (HDPE) plant by more than 70 per cent, by the end of the year 2011, the total amount of the investment being estimated to approximately USD 18 million.

Besides this capacity increase, other investments made by Rompetrol Petrochemicals during 2006/2007 were related to restarting and modernising the low density polyethylene (LDPE) – USD 30 million, the high density polyethylene plants – over USD 14.5 million and building of two new automated packaging plants for the LDPE and HDPE plants.

The company had successfully completed by the end of 2010 the integration of the automated control of petrochemical plants into the Command Centre of the

Petromidia platform. This allows full tracking of operations – the control and protection of technological flows, the collection and online transmission of process data and, implicitly, the reduction of production costs, which is a first for Romania, as well as for the south-eastern part of Europe.

Even though the Rompetrol Petrochemicals production units are running at capacity, operating under highest safety, environment and corporate social responsibility (CSR) standards, the company’s strategy to keep secure inventories in stock for its customers without unnecessarily high volumes has been a key factor in how 2010 has delivered such a strong performance. Mrs Viju explained, “Monitoring our customers closely and ensuring we fulfilled their requests enabled us to lock in production volumes, meaning that we had the exact inventory levels. We were able to do this by staying in very close contact with our customers and pre-empting their needs as much as possible using our expert knowledge of the sectors in which we operate.”

Mrs Viju is clear that the core advantage of Rompetrol is that, as a mediumsized oil producer, it must add value wherever possible in order to not simply be a producer; that’s why they became a marketer and a partner for its customers. She continued, “ Our vision is to became the most important marketer in the Balkan market and we are very close to achieving this aim. We consider the Balkan region our domestic market, a major area for business and growth.”

Growing market share

Rompetrol Petrochemicals also secures products through trading for sales in its active markets, with the company being the most important distributor of PET in Romania. For its petrochemical products, the company enjoys a 70 per cent domestic market share of PP, a 30 per cent share of the LDPE and 20 per cent of HDPE, although this is set to increase. It also has a 17 per cent share of the domestic PET distribution market.

Mrs Viju explained, “Starting November 2009, our HDPE production plant was stopped for a whole year, due to technical upgrade needs, causing a drop in our activities in this market. One of our focus areas for 2011 is the recovery of this market and we expect this to happen as we have invested a great deal in the rebuilding of the plant, with the repair project taking eight months. Now we have production facilities that are new and improved, so we can utilise this investment to enable us to expand our presence in the HDPE market. We expect our share to exceed 30 per cent in 2011.”

In the first nine months of 2010, the company recorded a turnover of USD 214.2 million and an operating income (EBITDA) of USD 11.5 million, increasing as compared to the indicators obtained during the similar period of 2009 - a turnover of USD 181 million and a negative operating result of USD 12.5 million.

Pushing forward

Establishing a greater presence in its neighbouring market of Serbia will also be a target for 2011. With plans to ‘copy/ paste’ the company’s successful marketing and business development strategy from other markets, Romania and Bulgaria, Rompetrol is confident that having identified a need for its constantly available petrochemical products in regions where the local provider has a non-constant supply, it will succeed quickly. This tactic will also be used in Turkey, Greece ,Italy and Ukraine in the short to medium term.

With a current headcount of 9000 employees and an ambitious plan for expansion, the Rompetrol Group is looking to increase its roll-call of the type of ‘extrovert and dynamic’ people the company is known for, particularly as it sees increasing success in new markets. Mr Viju concluded, “Our main focus is on our marketing strategy, as this underpins our activities, particularly as we have worked hard to have a constant, reliable oil and petrochemical supply for all of our markets. We see competition coming from the Middle East and we will become even stronger in our current target markets and existing territories.” n