Rom petrol Rafinare S.A. Corporate Presentation Novem ber 2 0 0 5 - - PowerPoint PPT Presentation

Rom petrol Rafinare S.A.

Corporate Presentation

Novem ber 2 0 0 5

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 2 -

Table of Contents

Group Overview

• History
• Organizational Structure
• Corporate Governance

Rom petrol Rafinare

• Technical
• Operational

Rom petrol Rafinare Subsidiaries

• Petrochemicals
• Wholesale and Retail

Rom petrol Rafinare

• Strategy
• Stock Performance
• Financials 2004 vs. 2003
• Financials Q1 2005 vs. Q1 2004
• Hybrid Instrument

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 3 -

Significant Corporate Events

1 9 9 9 – Holding company established as The Rompetrol Group (TRG) in the Netherlands 1 9 9 9 – The first major acquisition; the Vega refinery located in Ploiesti, is bought and doubles its revenues in the first nine months after the take-over 2 0 0 0 - Private equity investment by US-managed Romania & Moldova Direct Fund L.P. 2 0 0 0 - Rompetrol takes over Petros – at that time Romania’s principal oilfield operator. The company has since been renamed Rompetrol Well Services 2 0 0 1 – The Group’s largest acquisition, Petromidia S.A. (later renamed Rompetrol Rafinare), Romania’s largest and most sophisticated oil refinery. 2 0 0 1 – Rompetrol creates Rominserv, Romania’s first Engineering Procurement Construction & Maintenance (EPCM) company focusing on the oil industry 2 0 0 2 – OMV of Austria buys 25.1% of TRG NV, RMDF exits. OMV Chairman Dr. Wolfgang Ruttenstorfer joins TRG Board 2 0 0 2 – Rompetrol opens subsidiaries in neighboring Republic of Moldova (Rompetrol Moldova) and Bulgaria (Rompetrol Bulgaria) 2 0 0 3 – Rompetrol Rafinare reaches an agreement with the Ministry of Public Finance to restructure a historical tax liability 2 0 0 4 – Rompetrol Rafinare (April) is listed on the Bucharest Stock Exchange & becomes 20% of Index (November) 2 0 0 4 – In June both Standard & Poor’s and Fitch rated The Rompetrol Group with B- Outlook Stable 2 0 0 5 – OMV completes Petrom acquisition and exits from TRG 1 9 7 4 - Established as the international operator of the Romanian oil industry 1 9 9 3 - Privatized through a Management and Employee Buy Out (“MEBO”), turnover subsequently reduced to below $6 million by 1998 1 9 9 8 - Control purchased by Dinu Patriciu and a group of local investors

The Rompetrol Holding S.A. (Switzerland) The Rompetrol Group N.V. (The Netherlands) 97.28% Rompetrol S.A. (Romania) 60% Rompetrol Well Services SA (Romania) Palplast S.A. (Romania) 90 % Rompetrol Rafinare S.A. (Romania) 70,4% Geopetsa (Ecuador) 60% Rompetrol Upstream International Ltd. (Bahamas) Rompetrol Logistics SA (Romania) 60.27% Ecomaster SA (Romania) 99.52% Rominserv SA (Romania) 99.95% Rompetrol Downstream SA (Romania) Astra Investitii Imobiliare SA (Romania) 83.91% Rom Oil SA (Romania) CET Midia SA (Romania) 43.43% Global Security Sistem SA (Romania) 51% Rompetrol Moldova S.A. (Moldova) 85 % Rompetrol Petrochemicals SRL (Romania) 99,99 % Rominservices Therm SA (Romania) 59% 9,14% Rompetrol Bulgaria JSC (Bulgaria) 72,22% Rompetrol Industrial Parks SA (Romania) 23% 23% 23% Romcalor Oil Services SA (Romania) 100% Eurojet Romania SA (Romania) 99.4% 100 % Rompetrol Quality Control SRL (Romania) 99% 99,99% 23% Rompetrol Financial Group SRL (Romania) 82,36% 27,78% P&G Consulting (Overseas) Ltd. (Cyprus) 50 % 15,75% Vector Energy S.A. (Switzerland) 95 % RP Albania Downstream Sh.A (Albania) RP Albania Wholesale Sh.A (Albania) 50,59% 60% 2,62% 0,1% I ntreprinderea mixta Palplast SRL (Moldova) 20% 60% Rompetrol Holding S.A. (Switzerland) 80% 20% Dinu Patriciu Phil Stephenson 100 %

Corporate structure

60%

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 5 -

Corporate Governance & Controls

• The Board of Directors of TRG N.V. (the parent company) approves all

major transactions and operations such as business acquisitions/ disposals, fundamental business policy strategy, capital expenditure above certain limits, credit facilities above certain limits, long-term agreements above certain limits

• All the Group companies have established (by the Board of Directors)

certain authority limits for the general managers acquisitions (divided in

• il related/ investments/ other acquisitions)
• Annual audited IAS financials (consolidated and for each major

subsidiary) by Deloitte & Touche (Netherlands and Romania/ Bulgaria for subsidiaries); annual Management letter as well

• Group legal department advice on each major contract/ operation is

required

• All the Group companies credit facilities are negotiated by the Group

Treasury

• IT (based on Oracle Platform implemented for all operating subsidiaries)

has been a major factor in improving control functions by enabling management to access real time data, both operating and financial

Rom petrol Rafinare - Petrom idia

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 7 -

Shareholders

Nam e No.

• No. of shares ( * )

%

The Rompetrol Group N.V. and Affiliates 5 16,765,605,321 79.46% Legal Entities 281 2,468,378,470 11.70% Individuals 33,000 1,865,292,211 8.84%

Total 3 3 ,2 8 6 2 1 ,0 9 9 ,2 7 6 ,0 0 2 1 0 0 .0 %

As of April 19, 2005

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 8 -

AROMATIC EXTRACTION 430 000 BTX SEPARATION 240 000

• -XYLENE &

ETHYLBENZENE SEPARATION 90 000

NAPHTHA HYDROTREATER 833 000 CRUDE UNIT 4 800 000 JET FUEL HYDROTREATER 340 000

DIESEL HYDROTREATER 720 000 FCC FEED HYDROTREATER 1 200 000 m-XYLENE IZOMERIZATION 270 000

AMINE TREATERS AND CLAUS UNITS 32 000 LIGHT ENDS SEPARATION 200 000

FCC 1 100 000 MTBE 35 000 TEL ADDITION 350 000 p-XYLENE SEPARATION 310 000

UNLEADED GASOLINE PROPYLENE

C4 CUT LEADED GASOLINE COKE METHANE

OILFIELD CONDENSATE

CRUDE

TOLUENE JET FUEL ETHYLBENZENE

• -XYLENE

DIESEL

SULPHUR

PROPANE

n-BUTANE RAFFINATE LPG

FUEL OIL BENZENE p-XYLENE HYDROGEN NETWORK REFINERY FUEL GAS

PLATFORMER 500 000 DELAYED COKER 1 170 000 HYDROGEN PLANTS 3x1700

All capacities are in mt/y * All marked installations have been upgraded or otherwise modernized following investments

Refinery Layout

Refinery layout

Refinery Technical Layout

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 9 -

Licensors

• Petromidia is the most sophisticated of all Romanian

refineries

• Was designed and built between 1975-1977 using

Romanian and foreign technology:

• UOP
• Mitsui
• Snam Progetti
• Heat Research
• Was modernized in the early 1990s and can process a

wide variety of crude oils, with different sulfur content and API

• It is the only Romanian refinery producing Jet A-1 fuel

and plans to become the prime supplier of jet fuel for aviation companies operating in Romania and the Republic of Moldova

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 10 -

Logistical I nfrastructure

The refinery general logistical fram ew ork includes:

• Pipelines
• Maritim e berths for loading

– unloading

• Railw ay loading-unloading

facilities

• Autom otive loading-

unloading facilities The pipeline system

The oil pipeline connecting Oil Terminal Constanta used for crude

• il imports

The gasoline pipeline connecting the refinery to Oil Terminal

Constanta, used for gasoline exports

The diesel pipeline connecting the refinery to Oil Terminal

Constanta, used for diesel exports.

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 11 -

Com petitive Advantages

• Has the highest (81% ) white products yield in the

region

• Strategic location near the Constanta Oil Terminal, on

the Black Sea coast

• Direct access to the Danube-Black Sea Channel, the

Midia port, and Constanta port (one of largest harbors

• n the Black Sea)
• Close vicinity to crude oil pipelines
• Its own railway yard
• Facilities allowing crude oil reception and shipment of

liquid products by railway tankers

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 12 -

Consideration on Crude supply

• Petromidia refinery benefit from processing only Ural crude (strategic decision

taken in 2001) improved in 2004 as a result of increased differential between Brent and Ural

• Average differential in 2004 was approx. 3.76 USD/ bbl while the average on the

last 5 years was less than 2 USD/ bbl

• The trend is expected to continue in the next years

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 13 -

Production figures

thousands tones 2 0 0 4 2 0 0 3 % Feedstock processed 3,301 3,045 2.56 Gasoline produced 919 988

• 7.0

Diesel & Petrols produced 1,172 1.161 0.9

• High prices of crude and domestic market margins

evolutions caused refinery optimization to occur at lower Urals crude throughputs.

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 14 -

Trading Environm ent

thousands tones 2 0 0 4 2 0 0 3 % Export 991 1,105

• 10.3

Sales gasoline,diesel, jet 2 ,0 5 0 2 ,1 0 5

• 2 .6

Export (% ) 48% 52% Domestic market 1,059 1,000 5.9 Domestic market (% ) 52% 48%

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 15 -

Petrochem icals

• Rompetrol Petrochemicals has a standard output:
• 200,000 mt/ year of ethylene (currently in

conservation)

• 80,000 mt/ year of polypropylene (operating at

capacity)

• In 2004 the company manufactured or purchased from

third parties products sold under the Rompetrol Petrochemicals brand (special grades of polypropylene, HDPE, LDPE, PET). The offer covers the domestic and the regional markets (Black Sea, Mediterranean Sea, Central & Eastern European)

W holesale and Retail

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 17 -

W holesale

• Capacity of over 62,000 m3 of storage in all 6 modern depots

in Romania owned by Rom Oil

• Major clients include own network, MOL Romania, and Agip

Romania

• Other clients include transportation, agricultural and small

retail companies

• Logistics is assured by a modern fleet of trucks for oil products

transportation, four locomotives for unloading of railway tankers

• All depots have facilities for loading and unloading products (for

both railway and road vehicles)

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 18 -

W holesale Map

Bucharest Craiova Sim leul Silvaniei Zarnesti Arad Vatra Dornei Constanta

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 19 -

Retail

Today:

• 9 3 filling stations owned and 7 under construction by Rompetrol

Downstream

• 1 5 2 filling stations operated through allied clients distribution contracts
• Currently second largest downstream company in Romania (by

volumes) behind Petrom

• Romania’s first gas station network to sell only Euro standard fuels

Strategy:

• Rompetrol network to be fully

extended in Romania by 2006 to 200 owned filling stations

• Planning regional expansion to

Moldova, Bulgaria, Serbia and Turkey

• Continue with the allied client

distribution program and acquire sole suppliership position with

• ther Romanian retailers
• Bring all Rompetrol stations to

European standards

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 20 -

Retail Netw ork

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 21 -

Rom petrol Rafinare Strategy

• Rompetrol Rafinare strives to become, through organic growth and sensible low-cost

acquisitions that integrate with its existing operations, the leading low-cost provider

• f petroleum products in the Balkans
• The strategy will be executed by:

– Refining: Increasing the quantitative and qualitative performance of the Petromidia platform while upgrading to continue to meet EU quality standards – Downstream: Maintaining an approximate 50-50 balance between internal and external markets, while establishing direct selling operations in regional countries and building the retail brand in Romania – Petrochemicals: Restarting of the Ethylene Plant and the related Polyethylene plants and becoming a middle size player in the Balkans – Services: Using services companies synergistically with the group (Rominserv), with third parties (Rompetrol Logistics) or divesting them as “non-core”

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 22 -

Key Figures 2 0 0 4

2 0 0 4 2 0 0 3 Diff. Throughput (million mt) 3.3 3.04 + 2.5% Average Brent – Ural differential (USD/ bbl) 3.76 1.79 + 110% RRC Refining Margin (USD/ bbl) 7.56 4.66 + 63% Benchmark Refining Margin (Ural Cracking) 5.71 3.67 + 56% Net cash refining margin/ bbl (USD/ bbl ) 3.48 0.72 + 384% Consolidated EBITDA (million USD) 98 22 346% Average yearly liter per retail station (million liter/ year) 2.8 2.3 + 22% Petrochemicals sold (k mt) 105 78 + 35%

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 23 -

I AS Financials ’0 4 vs ’0 3 I ncom e Statem ent

USD Million – Standalone - Audited

2 0 0 4 2 0 0 3 % Gross Revenues 1,445 1,138 27 Sales Taxes (399) (317) 26 Net Revenues 1 ,0 4 6 8 2 1 2 7 Gross Margin 9 0 3 2 1 8 3 Selling, General and Admin (49) (56)

• 13

EBI T 4 1 ( 2 4 ) N/ A Exceptional Item

• 415

N/ A EBI TDA 8 6 1 6 4 3 7 Finance, net (30) (103) N/ A Net profit / ( loss) 1 1 2 8 8 N/ A

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 24 -

Consolidated vs. Standalone 2 0 0 4 I ncom e Statem ent

USD Million

Consolidated Standalone % Gross Revenues 1,534 1,445 + 6 Sales Taxes (399) (399)

• Net Revenues

1 ,1 3 5 1 ,0 4 6 + 9 Gross Margin 1 3 3 9 0 + 4 8 Selling, General and Admin (94) (49) + 92 EBI T 3 9 4 1

• 5

Income tax (2) N/ a Net profit / ( loss) 6 1 1

• 4 5

EBI TDA 9 8 8 6 1 4 Finance, net (31) (30) + 3

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 25 -

I FRS Consolidated Financials H1 ’0 5 vs H1 ’0 4 – I ncom e Statem ent

Million USD

H1 ’0 5 H1 ’0 4 % Gross Revenues 989 (223) 7 6 6 1 2 7 (50) 7 7 9 7 (21) 15 7 1 Sales Taxes + 65 599 (161) 4 3 8 3 7 (38) ( 1 ) 2 4 Net Revenues (20) 2 + 39 + 7 5 + 2 4 3 + 32 N/ A + 3 0 4 + 5 + 650 Gross Margin SGA & other EBI T EBI TDA Finance, net Forex ( 1 9 ) N/ A Net result

Group Overview

• History
• Structure
• Corporate Governance

Rom petrol Rafinare ( “RRC”)

• Shareholders
• Technical
• Operational

RRC’s Subsidiaries

• Petrochemicals
• Wholesale and retail

RRC

• Strategy
• Capital Structure
• Financials
• Hybrid Instrument
• 26 -

RRC - Stock Perform ance

Price (RON)

0.0000 0.0200 0.0400 0.0600 0.0800 0.1000 0.1200 0.1400