Romanian president Traian Basescu, who believes OMV Petrom's policy is 'incorrect', cut all ties with the company, which is the largest private company in Romania. Majority owned by Austrian OMV, Romania's Petrom posted a record profit last year, of EUR 886 million, which brought the president's disapproval. 'I am the one who cut all ties with Petrom, in protest over the excessive profit during a time of crisis,” said Basescu on Sunday during a live TV show on ProTV channel.

The Romanian president was supposed to visit Petrom and Exxon's drilling ship in the Black Sea together with Petrom representatives, but went there with Exxon only because he wanted to see the ship, 'not with OMV, I don't like their policy, it is incorrect,” he said.

“You cannot ask a company to be 100 percent moral, but you cannot throw the worldwide price of oil to our face every day – USD 120, when extraction costs USD 16 in Romania. This is the area where Petrom lack fair play,” said Basescu.

He has had numerous discussions about Petrom's profit-making policy in the past, including with the Austrian president (Gerhard Roiss, editor's note). “The response was: we will see, we will try, we will discuss, but the reality was they didn't take it into account,” said Basescu.

Basescu met Roiss in August last year, when he publicly admitted the state should have sold a stake in Petrom for the proposed price, as the price of its shares went up after the failed secondary public offering. The offer to sale 9.84 percent stake in oil and gas company OMV Petrom on the stock exchange in July was postponed after investors have subscribed less than 80 percent of the available shares, which was the threshold to make the offer successful.

When asked whether the Petrom privatization contract can be renegociated, Basescu said the contract is written in such a way that nothing else can be done.

OMV Petrom posted its highest net profit ever last year: EUR 886 million, up 72 percent on the year before. Its turnover stood at EUR 5.3 million, slightly below its record turnover from 2008, of EUR 5.4 million. The business growth slowed down in the last quarter of the year, when turnover went up by 17 percent and profit, by 7 percent. “We look back at 2011 as a year of external challenges but strong financial results and outstanding operational performance. This was the result of high investment efforts, effective cost and operational management but also supportive crude prices,” said Mariana Gheorghe, CEO of Petrom.

Petrom and Exxon have found 84 billion cubic meters of gas in the Neptune perimeter in the Black Sea, where it continues to drill for oil and gas. President Basescu, who recently visited the Deepwater Champion drilling ship, said the newly found gas reserves could grant Romania's energy independence. Exploration on the new gas field could start in 2015-2017, said Basescu. This would be earlier than dates previously suggested by the two oil and gas companies involved. Exxon and Petrom initially said the gas discovery needs ten years and billions of euros invested before exploitation.

OMV Petrom is the largest oil and gas company in Romania. It extracts 805 million barrels of oil in Romania and has a refining capacity of 4.5 million tonnes a year. It runs 800 gas stations in Romania, the Republic of Moldova, Bulgaria and Serbia. The company is majority owned by Austrian OMV. Romania’s Economy Ministry owns 20.64 percent of the company’s shares. Fondul Propietatea owns 20.11 percent and EBRD, 2 percent. Some 6.2 percent is traded on the Bucharest Stock Exchange, where its capitalization is of around EUR 5 billion.

editor@romania-insider.com