Tuesday, September 24, 2013

Romania's Petrom eyes 1 billion euro investment next year, shale gas

(Reuters) - Romania's top oil and gas company Petrom ROSNP.BX plans to earmark about 1 billion euros ($1.35 billion) for investment next year and could move into shale gas exploration if feasible, Chief Executive Mariana Gheorghe said on Monday.

Petrom is regarded as an indicator of the Balkan country's financial health and a robust investment program suggests the European Union's second poorest member is on track to achieve economic growth of more than 2 percent this year and next.

"To continue to stabilize production or to capture the growth, we really need to continue to invest," Gheorghe said at the Reuters Investment Summit.

"For the next year onwards, we have a guidance of between 0.8 and 1.2 billion again. But probably it will be over 1 billion euros again next year," she added.

Gheorghe told the summit held at the Reuters office in Bucharest that Petrom - which is majority-owned by Austria's OMV (OMVV.VI) - has three main ways to offset its reserves' natural decline, including increasing recovery rate for conventional crude oil, deep offshore in the Black Sea and shale gas.

"After the experience of the United States I believe no responsible market operators will refuse to look at this new territory ... We are at a very preliminary stage."

Petrom had said before it might expand operations to shale after 2021. In July, U.S. oil major Chevron (CVX.N) won approval to drill exploration wells in eastern Romania.

"We follow all the developments very closely because we have a frontrunner in Romania which is Chevron," Gheorghe told the summit on Monday. "Sometime at the end of our current strategy plan, around 2021, we intend to look at this market segment."

Asked whether Petrom might step into an exploration drive by acquiring shale acreage earlier than planned, she said: "We will look at all the bidings which the national agency for mineral resources will be launching in the coming years."

"If it fits our strategy, if it is feasible from a business point of view, meaning we have the resources, such opportunities will not be disregarded."

Petrom posted a second-quarter net profit of 1.06 billion lei ($319.4 million), slightly above market expectations.

Its shares outperformed the market on Monday, trading 4.2 percent up on the day at 4.4480 at 1255 GMT.

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