Analyzing Petrobrazi and Arpechim upgrade and expansion programmes with a

focus on refining performance achieved

Alfred Leodolter
General Manager Petrobrazi Refinery,
OMV Petrom S.A.

Bucharest,
October 2010
 Petrom Refining Landscape 2005

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 Petrom Refining landscape has changed significantly since 2005
SUMMARY OF CHANGE INITIATIVES

►Restructure Inefficient Production Facilities (most of the petrochemicals plants closed)

►Invest in New Process Units to Produce Euro Grade Fuels
►Focus on Core Business (restructure Rafiserv, divest Steam Cracker, outsourcing)
►Clean & Demolish (>50 old units demolished, >1700km old pipes removed)
►Remediate Environmental Legacy (80% of Petrobrazi refinery cleaned, Petrobrazi internal waste sludge removed)
►Align interest (exit joint ventures, site ownership)
►Change The Organization (empowerment process, clear individual targets)

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 Petrom Refineries:
Petrochemicals Rationalization
ARPECHIM
ACN I (26,000 t/y) / NaCN I (3,000 t/y)
ACRYLONITRILE
NaCN
ACN II (65,000 t/y) / NaCN II (4,000 t/y)
BENZENE
ETHYLENE CRACKER TOLUENE
200,000 t/y AROMATICS EXTRACTION (84,000 t/y) ETHYLENE
PROPYLENE
ETHYLENE O.
ETHYLENE OXYDE / GLYCOL (30,000 t/y) GLYCOLS
PLASTICS (220
LDPE FILM
kg/h)
LDPE (80,000 t/y) LDPE
HDPE
HDPE (30,000t/y)
CORROSION INHIBITORS
OILFIELD CHEMICALS (600 t/y) EMULSIFIERS

PETROBRAZI ETHOXYLATE I (3,500 t/y) & II (2,500 t/y)

NONYLPHENOL ETHOX.
POLYETHYLENE GLYCOLS
E96
ETHANOLAMINE (3,500 t/y) MEA, DEA, TEA

MALEIC ANHYDRIDE (6,000 t/y) MALEIC ANHYDRIDE

INCERP RACING FUELS, HAND CREAM,

SMALL SCALE PRODUCTION SPECIALITY LUBRICANTS AND WAX

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 Site Renewal: Petrobrazi refinery

►Total surface: 400 hectares

1.8 km ►78 abandoned plants

►175 abandoned tanks

2.4 km

►Covering almost half of the refinery

surface

Vienna City: 2,88km² Petrobrazi: ~4km²

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 What we found

A refinery full of historical environmental issues that had to be brought to international refinery standard.

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 Other removals and unexpected discoveries

► Further on removal of

► 15,000 m3 sludge and decontaminated soil

► 7,000 tons asbestos

► 600,000 m3 mineral wool

► Unexpected relics from the war

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 Then…

…and now
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 Petrom Refining Landscape 2009

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 First phase of Petrom Refining transformation is completed
►Significant improvement in safety performance
•Excellent performance at Petrobrazi in 2009:
• 1 year with no lost time incidents on site
st

►Increased Energy Efficiency

•Own Crude Consumption and Loss 14%  11.5%

►Refining yields according to market needs;

•Middle Distillates 30%  38%

•HFO 15%  12%
►All fuels produced to EU specifications

►Organizational alignment

►Improved maintenance practices & increased mechanical availability

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 Petrobrazi Modernization: Maximize refinery integration value by conversion of
Romanian crude

Maximize Petrobrazi integration value by conversion of Romanian crude only

Petrobrazi modernization:

 Streamline refining nameplate capacity to process ~ 4 mn t/y domestic

crude
 Install thermal cracker and bitumen plant

Investment 2010-2014: EUR 750 mn

 Modernization: EUR 400 mn by YE 2013
(vs. original plan of EUR 1.5 bn)
 Compliance, safety, tank farm: ~ EUR 350 mn

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 Modernization program designed considering the market challenges

Future demand In particular the diesel demand dropped

Beside of the change in the demand, the margin
Diesel
environment changed tremendously
As effect the investment plan had to be revised and
Gasoline adjusted to the new situation

Consumption of Petroleum Products

Romania (2005 – 2010)

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 We focus on domestic crude with minimum investment
Priority Program Projects

Refinery Modernization program focused on  Legal compliance: New Sulfur

recovery unit
the minimum investment and domestic crude
to overcome the current market situation.  Crude unit flexibility (DAV revamp to process heavy
domestic crude)
Avoid stranded investment in view of potential
future opportunities  Increase VGO conversion capacity according to domestic
crude quality

 Tank farm optimization including evaluation of fuel

product upgrading opportunities

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 Petrobrazi Modernization: Maximized value of Romanian upstream integrated
refinery
 Refining capacity streamlined with domestic crude production
 Refinery configuration adapted to meet Romanian market demand

Petrom
Refinery configuration Petrom 2009 Mid-term target
2004

Crude oil consumption for energy and loss (of crude input) 14% 11.5% 10%

Product yields (of total products)

Heavy fuel oil 15% 12% ~7%
Middle distillates 30% 38% ~45%
Asset utilization 75% 65% 1 90-95%
Fixed cost performance (Solomon quartile) bottom 4th Q. 4th Q. mid 3rd Q.
Maintenance turnarounds (interval) 1 -2 years 4 years 5 years
1 Arpechim stop/go modus

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 Refining strategic objective remains unchanged

STRATEGIC OBJECTIVE

 Our strategic objective is maximizing Petrom integration value by low cost conversion of the Romanian crude into
high quality transport fuels for the South-East European market

 With the Refinery Modernization program the strategic objective will be achieved taking into account latest
forecast in terms of crude availability and fuel demand

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