IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Privatization Disputes in Romania – the Petrom Case

Listed author(s):
  • Gabor Hunya


    (The Vienna Institute for International Economic Studies, wiiw)

In 2004 the Austrian-based OMV acquired in a privatization process 51% of the Romanian national oil company Petrom. Two and a half years later this privatization is again in the focus of political attention in Romania. The current government and the media consider the selling price and the royalties too low in view of the high international oil and gas prices. The whole issue of privatization is on the agenda. This paper investigates the privatization of Petrom in its historical context and deals with its consequences. In 2003-2004 the privatization of large companies was seen as a prerequisite to put an end to non-transparent subsidization, rent-seeking and favouritism in the Romanian economy. The Petrom sale was urged by the necessity to obtain from the EU Commission the 'functioning market economy status' and to close all negotiation chapters by the end of 2004. Fair and open bidding resulted in selecting the winner and setting the sales price. The conditions of privatization, the sales price and other stipulations of the privatization process reflected the then level of knowledge and the risks associated with a Romanian company. Meanwhile, due to high international oil prices and the improved business conditions in Romania, an EU member as of 2007, the value of the company is now certainly higher than it was two years ago – which also benefits the Romanian state as (direct and indirect) holder of 40% of Petrom's shares. It is debatable how far the recent increases in international oil prices could be foreseen in 2003, but it is quite certain that the International Energy Agency and large oil companies did not expect such a development. Still, the high oil prices benefit Petrom, and the large one-time profits finance investments. The sale of Petrom to OMV and its subsequent restructuring stabilized the company. New technologies, management techniques and organizational structures have increased efficiency. The company envisages the production decline to come to an end in 2007; explorations in Kazakhstan will add to Romania's supply in the future. As a further advantage, Petrom is the OMV subsidiary in charge of the company's business in the CIS and in Southeast Europe, Bucharest becoming the regional headquarters. The discussions around the OMV–Petrom case should have no relevance for greenfield investments in Romania, but large-scale privatizations particularly in the energy sector suffer delays. The government has stalled a number of important privatizations thus nurturing potential hotbeds of corruption.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Order URL / Description
Download Restriction: Only to order

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by The Vienna Institute for International Economic Studies, wiiw in its series wiiw Research Reports with number 337.

in new window

Length: 36 pages including 9 Tables and 2 Figures
Date of creation: Mar 2007
Publication status: Published as wiiw Research Report
Handle: RePEc:wii:rpaper:rr:337
Contact details of provider: Postal:
Rahlgasse 3, A-1060 Vienna

Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page:

More information through EDIRC

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:337. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Customer service)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.