rompetrol s success story n.
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  1. ROMPETROL’S SUCCESS STORY ENERGY—Romania’s Forum on Oil, Gas and Energy Bucharest, June 16, 2005

  2. Table of contents • The Rompetrol Group Profile • Rompetrol History • Privatization Attempts • The Turnaround of Rompetrol Rafinare • Structure of Romanian Oil Industry • Difference between Rompetrol Rafinare and others • Investigation into privatization procedures

  3. The Rompetrol Group Profile • Largest Romanian group of private companies (2004 gross revenues of $1.61 billion), representing almost 7% of State Budget revenues • Covers 32% share of Romanian refined products market • Domiciled in The Netherlands with worldwide operations and assets (though mostly in Romania) • Owned 100% by management • Financed principally by international banks; audited to IAS standards • Active in upstream, refining, marketing and services • One of the country’s largest exporters and taxpayers ($635 million in tax payments in 2004)

  4. The Rompetrol Group Profile • Achieved a landmark agreement with MOF in 4Q 2003 rescheduling historic tax liabilities • Our online Investor Relations center (at provides transparent information on company operations via our 2003 and 2004 Annual Reports, management presentations and a White Book on the 3-year post-privatization history of the Petromidia refinery • Our largest subsidiary, Rompetrol Rafinare SA, was listed on the Bucharest Stock Exchange on April 7th, 2004 and broke all trading records (and the IT system!) on the first day

  5. Rompetrol – History 1974 - Established as the international operator of the Romanian oil industry 1993 - Privatized by Management and Employee Buy Out (“MEBO”) and turnover subsequently reduced to below $6 million by 1998 1998 - Control purchased by Dinu Patriciu and local investor group 1999 – Holding company established as The Rompetrol Group (‘TRG’) in the Netherlands 1999 – First major acquisition. The Vega refinery – located in Ploiesti – is bought and doubles its revenues in the first nine months after take-over

  6. History – cont’d 2000 - Private equity investment by US-managed Romania & Moldova Direct Fund, L.P. 2000 – Rompetrol takes over Petros – at that time Romania’s principal oilfield operator. The company has since been renamed Rompetrol Well Services, which is now listed on RASDAQ, Romania’s OTC market. 2001 – The Group’s largest acquisition, Petromidia S.A., is also Romania’s largest and most sophisticated oil refinery. Rompetrol committed itself to a sustained modernization process to make Petromidia a state-of-the-art facility in Eastern and Central Europe

  7. History – cont’d 2001 – Rompetrol creates Rominserv, Romania’s first Engineering Procurement Construction & Maintenance (EPCM) company focusing on the oil industry. 2002 – OMV of Austria buys 25.1% of TRG NV; RMDF exits; OMV Chairman Dr. Wolfgang Ruttenstorfer joins TRG Board. 2002-2003 – Rompetrol opens subsidiaries in neighboring Republic of Moldova (Rompetrol Moldova) and Bulgaria (Rompetrol Bulgaria) 2004 – OMV takes over Petrom and sells its 25.1% stake in TRG back to management • 2005 - Most significant Q1 results ever with net profit reaching $43 million. Rompetrol starts operations in Albania and opens a representative office in Moscow

  8. Privatization Attempts • Complexul Petrochimic Midia Navodari (the first name of Rompetrol Rafinare S.A) was one of the large oil refining plants which appeared after 1975 • In 1991, the entity was changed into a stock company by taking over all of the assets of the former unit. • The Romanian Government attempted three privatizations of Petromidia • The first attempt was carried out in 1997 when the State Ownership Fund (SOF) had discussions with Daewoo, Glencore and Petromidia USA • The second effort was made over July 1998 - January 1999 and resulted in a sales/purchase agreement for 65.323% in Petromidia’s share capital with Turkish investor Akmaya • Due to the disagreements between the Romanian authorities and Akmaya regarding the additional incentives the Government re-slated the sale of a controlling interest in Petromidia • In a third effort, SOF concluded an agreement with the Rompetrol Group N.V. on 31 October 2000. Actual transfer of the stake was subsequently performed on 26 January 2001

  9. The turnaround of Rompetrol Rafinare Crude Supply - considerations

  10. The turnaround of Rompetrol Rafinare Types of crude used Crude Oil Prices

  11. The turnaround of Rompetrol Rafinare Evolution of MTBE % in unleaded gasoline

  12. The turnaround of Rompetrol Rafinare Production – 100% sour crude into 100% euro standard fuels Products Euro Products Sweet Crude Sour Crude

  13. Structure of Romanian Oil Industry—Survival of 3 out of 5 51% OMV 80% Dinu Patriciu TRG 20%Phil Stephenson

  14. Difference between Rompetrol Rafinare and others • RRC is a public company listed on the BSE and the ROTX Vienna Index • RRC discloses all ultimate beneficial owners • RRC has net profits as of Q4, 2004 and Q1, 2005 • RRC financial results are audited by international independent auditors • RRC covers 32% of the refining market share in Romania • RRC has open and transparent supply contracts for crude imports • RRC is backed mostly by international banks which finance its activity • RRC has expanded its exports and activity regionally • RRC meets EU quality and environmental standards

  15. Investigations into privatization procedures • Interest groups are still active in Romania and receive strong political backing • PNA investigation started and ended last year—charges were rejected and sent for investigation to the General Prosecutor’s Office • The General Prosecutor’s Office has launched an investigation into the privatization of Petromidia • Although we suspect the initiation of the investigation was politically motivated, Rompetrol will cooperate fully with the prosecutors all through the process, which we hope will be: • Professional • Expeditious • Apolitical • Conclusions expected to vindicate the Rompetrol Group and also to disarm special interest groups

  16. What we are doing to defend ourselves • To prove our innocence we have been cooperating with prosecutors andprovided documents and answers that show no wrongdoing • Rompetrol retained the services of a team of local and international attorneys including international law firm Salans • Rompetrol shareholders brought forth to the public attention the lack of due process in conducting the investigation • Local and international media and civil society have rallied in support of principles such as presumption of innocence, fair and quick due process free of political or economic interference • Rompetrol shareholders are considering international legal action to defend investments made in the company • Rompetrol welcomes a swift and independent investigation conducted with the observance of due process and respect for the justice process • Rompetrol has posted documents, releases and media articles on its website detailing the issues surrounding the inquiry

  17. Why should you care • Oil industry development in Romania moving away from old guard to a new paradigm embodied by Rompetrol will allow business to thrive and benefit all constituencies • Maintain positive investor climate in light of forthcoming EU accession • Respect for the rule of law and true presumption of innocence as part of the due process, to be followed • Cooperation with civil society to defend human rights • Prevent potential negative economic impact of justice does not follow due process • What happened to us can happen to anyone conducting business in Romania unless structural reform is applied