Romania’s biggest oil firm sells petrochemicals arm

The deal, confirmed after months of negotiations, lifts the lingering threat of redundancy hanging over several hundred Arpechim workers whose plant has been idled for more than a year. A total of 560 employees will be transferred with the facility to Oltchim once the Romanian authorities give the transaction the green light.

The Arpechim operation has an annual capacity of 200,000 tonnes of ethylene and 95,000 tonnes of propylene, and is a significant domestic polymer supplier.

Fixed assets being transferred to Oltchim include units for pyrolysis and extraction of aromatics, low density and high density polyethylene, storage tanks and an area of 150 hectares of associated land.

Oltchim will pay around €13m for the assets, stocks of oil and petrochemicals and certain Petrom investments. Oltchim and Petrom signed a debt restructuring agreement with Oltchim’s historical debts to the oil and gas group amounting in December (2009) to more than €112m, will be repaid over three years.

The move, which will consolidate the country’s petrochemical operations and allow Petrom to concentrate on its core business, will secure the future of Arpechim’s hitherto inefficient chemicals facility.

“The deal is the result of a long period of evaluation and negotiation and we believe it is the best formula for the future of the Arpechim activity,” Neil Morgan, Petrom’s refining business director was quoted as commenting in the Romanian press.

The integration of Arpechim and Oltchim is the “only chance of revitalising” petrochemical activities in Romania and will help create new jobs at Oltchim’s sites in Arges and Valcea, according to Oltchim’s general manager Constantin Roibu.

His company, which recorded a turnover worth €528m in 2008, has the country’s largest petrochemicals unit with PVC, caustic soda, polyols and plasticisers production. Petrom, with a turnover of €4.5bn in 2008, has around 8 billion tpa of refining capacity and runs 550 petrol stations in Romania with another 269 abroad in Serbia, Bulgaria and Moldova. The group is 51% owned by Austria’s OMV energy group.

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