Petrom announced that it will separate petrochemical operations from the oil refining division. For this purpose Petrom has established a new company, Petrochemicals Arges, which will focus exclusively on petrochemical operations.
Oltchim wants to take over the petrochemical division at the Arpechim refinery, Petrochemical Arges, because the company depends on the basic raw materials produced here. The company will make its offer on October 3, following previous negotiations with Petrom representatives on September 5.
Oltchim’s strategy after the acquisition of Petrochemicals Arges will involve an increase in the production capacity of the pyrogenic distillation plant from an annual 200,000 to 300,000 tons of ethylene per year.
Petrom is selling the plant because it is too small and not very efficient, say Petrom officials. “The trend in the industry is to build giant petrochemical facilities where raw materials are cheap. Raw materials are not very cheap in Romania, and this is why there is no such thing as profitability,” said Werner Schinhan, Petrom’s Deputy CEO, told Business Standard. Pyrogenic distillation plants built nowadays all around the world have production capacities of one million tons per year. For Oltchim, taking over Petrochemicals Arges would resolve basic raw material acquisition problems and transform the company into a much more appealing one in view of privatization. Bank loans will finance the transaction, according to Oltchim’s Manager, Constantin Roibu.
