For KMG International (former Rompetrol Group) 2014 was a historical milestone. It was the year that the group, fully owned by the national oil and gas company of Kazakhstan – KazMunayGas, reached record financial and operational results, unique in its 15 years of existence. How was it possible for Rompetrol Rafinare, company member of KMG International that operates Petromidia and Vega refineries, to achieve operational records in the previous year, how their good results can be maintained and what further development directions of activity includes their corporate strategy explains Mr. Yedil Utekov, General Manager of Rompetrol Rafinare.
Rompetrol Rafinare recorded the best operational results in its history in 2014. What are the significant performances of the company and how was it possible to achieve them?
2014 has indeed brought us a remarkable operating result for the refinery. Petromidia processed, for the first time in its 35-year plus history, more than 5 million tonnes of raw material. The total quantity processed since 1979 exceeds 100 million tonnes. Such performances were favoured by the KMG International and KazMunayGas investments carried out during 2007-2014, which mainly aimed at modernising and expanding the platform facilities, as well as at increasing the processing capacity from 3.5 million tonnes to 5 million tonnes per year. Also, investments were made in crude oil supply, transit and storage projects. Petromidia managed to operate uninterruptedly in 2014, at the capacity of 13,800 tonnes per day, and the degree of use increased from 88% in 2008, to approximately 99% in 2014. We broke a new record last year for the diesel produced at Petromidia – 2.43 million tonnes, by 27% higher than the previous year. In 2008, before commissioning the investment package, the refinery produced 1.5 million tonnes of diesel. Thus, the weight of Diesel in the total white products increased from 35% to 44% during 2008-2013. Petromidia has also reached the maximum capacity of polypropylene production on the petrochemistry segment, meaning 90 thousand tonnes, by 12% higher than the previous year, as the company is the sole polymer producer in Romania. Of course, the KMG International investments also targeted the development of the domestic and the regional fuel distribution, which allowed for a continuous operation flow throughout the Group’s full value chain.
What development guidelines has the Rompetrol Rafinare strategy included for the next period and what steps will you take to maintain the level of performance achieved?
Our goal is that the finished products to continue to meet the market and end consumers’ quality requirements. Together with the Vega Ploiesti Refinery, we plan to continue to provide more than 43% of Romania’s refining capacity while complying with the European and domestic environment standards. Our plan for 2015 is to operate the Petromidia Refinery under the same safety conditions, to produce at maximum capacity per operation days, maintaining the gasoline, diesel and other white product output at the 2014 levels, meaning 85.7%. As a normal procedure – this helps our operations go on in good conditions of performance – Petromidia and Vega refineries will shut down for major turnaround in September – October 2015, and the investments for this project are to reach approximately 80 million USD. The maintenance works will be carried by Rominserv, the general contractor of KMG International and it will involve local partners; it is in the same time an investment with positive impact in the local economy.
Petromidia refinery in Romania is the first Romanian refinery certified according to the European environment legislation. As a former manager on issues of ecology, technology, health and safety, what are the recommendations on improving the operations in this area of activity?
We start from the premise that any sustainable development is possible under safety conditions, not harmful to the environment. Therefore, we will continue the programme for safety increase culture on the Petromidia and Vega Platforms. All the projects implemented in the refinery have also impacted positively the environment. In this respect, we maintained an integrated quality, environment, health and occupational security management system and we have inherently renewed our quality certificates. Last year, the Petromidia Refinery operated at its maximum capacity and had zero major work injuries. We continue to work in order to make sure our products are compliant with the highest quality standards, with the personnel working in a clean environment and safe working conditions.
The Rompetrol Rafinare exports cover in particular countries neighbouring the Black Sea. Do you intend to expand your business to other areas?
The exports of Rompetrol Rafinare have increased in the last two years as the Petromidia refinery had a higher production. In 2014, our exports reached over 2 billion USD. In 2013 the export to the subsidiaries of KMG International to Moldova, Georgia, Bulgaria, Ukraine, as well as to its partners in the Black Sea Region was of USD 1.7 billion. Increasing exports have positioned the company on the first place in the country’s largest petroleum products exporters’ standings and on the second place at national level. We will continue to maintain our commercial relations with our traditional partners and, of course, we are looking for the best market opportunities.
Under the current circumstances, when companies face problems caused by falling oil prices, what is level of investments planned by Rompetrol Rafinare for the current year?
The refining industry is going through difficult times. European refineries face, for many years, a complicated economic environment, caused by changes in demand for petroleum products, future margins, drastic environmental rules and lately the fall in oil prices. Our company, operating two refineries connected to the source of raw materials – the company KazMunayGas of Kazakhstan, has performed oil processing and achieved major production records in 2014. For 2015, Rompetrol Rafinare has budgeted investments of nearly 112 million USD, much of which being allocated for capital maintenance scheduled for Petromidia and Vega refineries, that is, as previously mentioned, 80 million USD. Our plan in 2015 for Petromidia Refinery is to operate under the same safety conditions, to produce at maximum capacity per operation days, maintaining the gasoline, Diesel and other white product yields at the levels reached in 2014 compared with the operational days of the refinery.
The replacement of qualified labour is an important issue for companies in general, not just for the oil and gas sector. What is the group’s policy in terms of attracting young people? How do you persuade them to join you? Do you cooperate with educational institutions?
The activities of Rompetrol Rafinare have a significant multiplying effect on the real economy both on the local and national level. The activities of the companies in the KMG International on the Petromidia platform, as well as those of their partners, contractors, subcontractors, clients, suppliers, involves more than 10,000 employees. The development of the activities on the Petromidia platform also triggered the development of Navodari town, its number of inhabitants growing to more than 40,000. At the same time, the company runs annual programmes for the students of the relevant universities across the country; many of these students are hired afterwards. In 2014, half of the 90 students and master students with Ovidius University and “Lazar Edeleanu” High School of Navodari who attended the training courses have been employed with the companies operating on the Petromidia platform. This year, new hiring is expected due to the company’s increasing needs related to the development of its operations. 109 vacancies are available with the Petromidia Refinery for students and pupils from Constanta and Navodari to benefit from training in specialisations such as oil and gas mechanical engineering, electrical automation, information technology. We are constantly concerned with passing on the oil knowledge from the Petromidia’s generation of professionals to the youngsters.