OMV Petrom To Shut Down Romanian Arpechim Refinery

The Supervisory Board of Romanian oil company OMV Petrom (SNP.RO) on Friday said it will permanently shut down the Arpechim refinery, since no “credible” buyers have been found.

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In 2010, the Arpechim refinery was only active for three months.

"The sale option, which the company investigated in the past year, is not feasible as no credible buyer was identified that would have the experience and financial resources necessary to safely and sustainably operate the refinery," the company notes in a news release.

After the shutdown, the refinery's logistics will be used for storage, which means that some of the employees will be kept. The employees laid off will receive severance pay worth a total EUR10 million.

The Arpechim refinery has a nominal capacity of 3.5 million tons per year and it was launched in 1971.

Petrom posted a record net profit of 2.19 billion lei (EUR1=RON4.1020) in 2010, the highest profit seen since privatization in 2004.

The company is 51.01% owned by Austrian group OMV, while the Economy Ministry holds a 20.64% stake. Fondul Proprietatea (FP.RO) holds 20.11%, the European Bank for Reconstruction and Development holds 2.03% and 6.21% of stock is free float.

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