Romanian player OMV Petrom is eyeing cuts to its capital expenditure programme in response to the Covid-19 global pandemic, while maintaining its commitment to reduce its carbon footprint.

Petrom, partly owned by Austrian giant OMV, said it has activated its business continuity plan, which includes specific measures to ensure the running of critical operations, taking into account the different stages of the Covid-19 situation.

Christina Verchere, chief executive of Petrom, said: “We are dealing with an unprecedented global situation, which requires a swift and firm response from people, businesses and authorities.

“We have mobilised our teams and are working closely with the authorities to secure the energy the country needs, while ensuring the right measures for the health of our employees and customers.”

To ensure security of supply, Petrom set up a dedicated management team to monitor the situation daily and is working to contain the impact on operations and critical infrastructure.

To protect its employees and customers, the company said it has implemented working from home for the employees who can perform activities remotely, as well as flexible working hours.

“Online, video and electronic applications are used at a large scale for meetings and signing of documents electronically, thus ensuring, as much as possible, social distancing,” the company said.

While Petrom is banking on its on its Petrobrazi refinery and the Brazi power plant to support its financial results, the company said it is working to reduce capex.

“We recognise that we are facing an unprecedented difficult situation, with a severely depressed oil price environment accompanied by a weakening economic situation, which impose timely and appropriate measures to reduce the impact on our financial position,” Verchere said.

“Consequently, we will intensify our efforts for capex prioritization, portfolio optimisation and cost reduction while maintaining our commitment to safety, to reduce our carbon footprint and to create long-term value to our stakeholders,” she said.

There have been no details so far on the cuts the company is aiming to make.

Last week, the Romanian exploration & production industry’s association (Ropepca) warned of the economic impact of Covid-19 on the business activities of its members, which includes Petrom, due to travel limitations, a reduced labour force availability caused by self-isolation and disruption in normal activity.

Ropepca said the industry will experience a slowdown in operations, potentially leading to difficulties in performing “the minimum work programmes assumed in the concession agreement”.

Romanian state-owned gas producer Romgaz already said it was considering storing gas and delaying the delivery of supplies until later in the year to try to avoid impacts related to the pandemic.

While Romgaz has not experienced any impact related to Covid-19, it said, on a short-term basis, it is considering injecting its gas into storage and moves to “postpone deliveries towards winter”.

Delays, however, might affect investments, Romgaz warned, “as the relationship with suppliers is affected by a national state of emergency”.

Earlier this year, Romgaz said it was eyeing a 15% to 20% minority stake acquisition in the ExxonMobil-operated Neptun Deep gas project in the Black Sea, after the US supermajor announced it was “testing the market for interest”.

ExxonMobil and project partner Petrom, each hold a 50% share of the giant offshore block, where it made the Domino discovery that found between 1.5 trillion and 3 trillion cubic feet of gas.

Finance

OMV Petrom eyes capex cuts, sticks to lower emissions pledge