Thursday, September 6, 2007

INTERVIEW-Romania's Petrom sale probe routine says minister

By Justyna Pawlak

BUCHAREST, Sept 6 (Reuters) - Romania's review of the privatisation sale of a controlling stake in oil firm Petrom (SNPP.BX: Quote, Profile, Research) is part of a routine investigation rather than a probe into suspected irregularities, a senior government official said. Finance and Economy Minister Varujan Vosganian said Romania's privatisation agency AVAS will conduct a review by Sept. 30, in line with the 2004 sell-off contract that gave Austrian oil and gas group OMV (OMVV.VI: Quote, Profile, Research) a 51 percent stake.

Earlier this month Vosganian was quoted saying in local newspapers that AVAS should verify the contract, questioning its fairness and asking the agency to consider cancelling the sale if irregularities were found.

"This (review) is part of the programme, not a result of any suspicions," Vosganian told Reuters in an interview late on Wednesday, adding that AVAS will compare OMV's investment plans and other details with the sale contract.

He declined to comment on what he expected to result from the investigation.

"I am a man of honour, I can't break something we signed. And I ask all the partners to have the same attitude ... We don't want to deny anything that was signed," he said.

"We ask the same from every party ... including Petrom."

The Petrom privatisation has been plagued by controversy in Romania, which joined the European Union this year, since the leftist government which sold the company lost power in 2004.

Centrist President Traian Basescu has said Romania should review the deal because it gave away too much control over the country's national resources.

Last year OMV also agreed to help offset the impact of rising natural gas prices on Romanian consumers after what analysts said was a battle between the company and Bucharest over the country's future gas policy.


Prime Minister Calin Tariceanu has said repeatedly that the Petrom sale should not be reviewed. But Romania has asked energy firms to make public their privatisation contracts because of the authorities' view that previous sell-offs threatened the country's energy security.

"In the past, the state was very benevolent with some companies and the conclusions were not very good for Romania," Vosganian said.

"In my constituency, three companies failed because AVAS closed its eyes to different unfair behaviour coming from foreign investors," he said.

Last year OMV defended the Petrom purchase after rumours in the Romanian media that the deal had been the subject of a criminal investigation into suspected leaks of secret privatisation documents.

Prosecutors at the time did not say which privatisation deals they were examining in the probe.

Opposition politicians stepped up criticism of the Petrom sale after the country's second largest oil firm Rompetrol Group NV sold a 75 percent stake to Kazakhstan's state-owned KazMunayGaz last month for an undisclosed amount. Auditors valued the company at $3.6 billion, valuing the stake much higher than the Petrom deal. (Additional reporting by Luiza Ilie)

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