Posted at 7/25/19, 12:08 PM Interviews

Alexandru Nicolcioiu: Petromidia was thought to be an integrated part of a national system

"The success of the Petromidia platform is also linked to the name of Alexandru Nicolcioiu, who served as the director of the refinery from 1979 to 2007."  
The success of the Petromidia platform is also linked to the name of Alexandru Nicolcioiu, who served as the director of the refinery from 1979 to 2007 and currently serves as Adviser of KMG International CEO. Alexandru Nicolcioiu remembers the heaviest, but also the best moments in Petromidia's four-decade history.
The history of the largest refinery in Romania begins in the 1970s when, for the accomplishment of Romania's development program established by the Romanian state in 1970-1975, it was decided to build on the Black Sea a petrochemical plant with an annual capacity processing of 3.5 million tons of crude oil and integrated with a petrochemical sector (200,000 tons of ethylene and 100,000 tons of propylene).

"Petromidia was thought to be an integrated part of a national system to process impressive amounts of crude oil. As a strategic importance this petrochemical combination has been proven over the years that it was a combination that assures the export of petroleum products; before the 1990s, most of Midia's products went for export using gas and diesel pipelines connected to Constanta’s Oil Terminal. All other refineries used the port of Constanta, from where the deliveries to export were made. It was practically a contributor to the currency requirement in order to continue running the combined program and related industries. That was the strategy until the 1990s", said Alexandru Nicolcioiu for Forbes Romania.

Then followed the difficult period of the 1990s, which had negative effects on the entire industrial sector in Romania. Alexandru Nicolcioiu remembers that in those years, Petromidia underwent significant changes, and in the second half of the decade, due to the financial problems, the authorities even considered the liquidation of the company, but, contrary to the expectations, the winding-up decision was not taken.

"The 90's came with more difficult moments. If until then the 11 refineries were integrated, as if it were a large refinery processing 32 million tons of crude oil, after 1990 it was transformed into commercial companies. Therefore, the Midia Petrochemicals Complex was transformed into S.C. Petromidia, in which the State Property Fund (FPS) had 70% and FPP (Private Equity Fund) 30% of the share capital. All the other 10 refineries and Midia turned into commercial companies, and the crude oil extraction system turned into Autonomous Registry, RA Petrom. Being these major changes in international economic relations, slowly, many of the markets that Romania had in the 1990s began to fall; in addition, imports and exports have been liberalized, of course, many products have entered Romania in competition with Romanian products."

"It was a period (97-98) when the price of petroleum products on the Romanian market was controlled for social reasons, which affected the refineries very much: raw material was bought at the free market prices, instead the petroleum products were sold only at controlled prices, modified prices 2-3 times a year through HG. This overlapped with the devaluation of the leu: the dollar was 6 lei in 1996-97 and reached 9000 lei after. To be able to grow, you needed currency, so buy from the leu market to buy currency. These overlaps affected most of the refineries in Romania from a financial point of view, leading to major restructuring. Also, a difficult moment that ran from 1996 to 1997, when it was placed on the liquidation list was the problem of closing the company, we succeeded with my colleagues from the trade union to be received by the prime minister at that time, and with the entire Romanian government in front of me, I explained to them all the economic and financial situation of the platform. Then, contrary to expectations, it was then decided not to liquidate", remembers the current CEO Adviser of KMG International.

Also in the 1990s, Petromidia was able to access a 50 million USD loan guaranteed by the Romanian Government and the National Bank. This money, explains Alexandru Nicolcioiu, contributed to the modernization of a part of the refinery, to the reliability of many equipments, so that Petromidia became the most attractive refinery in Romania, also considering the advantageous position on the seafront.

"In October 2000 the privatization contract with Rompetrol was signed, Rompetrol acquired from the State Property Fund the share package, started the refinery development program in 2001-2007, through various modernizations we made on this platform, we have managed to keep the entire petrochemical refinery and polypropylene plants in operation, and in 2007 was the crucial moment of this platform", emphasizes Alexandru Nicolcioiu.

Petromidia gradually became the central pillar of the refining industry in Romania, being the largest refinery in the country and one of the most modern in South-Eastern Europe. Petromidia also significantly contributes to the development of Rompetrol's activities in Romania and in the Black Sea region. In 2018, Petromidia recorded 11 new business records, with historical levels reached on processed raw materials, petroleum products obtained, gasoline and diesel production, aircraft fuel, white product yields, refining capacity utilization. These include the improvement of the energy efficiency index and the reduction of technological losses. Also, this year, Rompetrol Rafinare proposed to exceed the 6 million tons of processed raw materials, which would represent a new historical record.

"40 years for me have passed very quickly. It was like yesterday that we were a 25-year-old who worked on this platform, every day we were developing something, we always thought we did not stop and all the time the activities in Petromidia have developed, all the time happened new things, and that's what the 40 years have gone through very quickly. I feel like 35 years old, not to say even 25, I still feel that I have a lot to support and implement and learn, I always want to involve all our younger colleagues in developing this refining and always telling them that our great danger is that time passes very quickly", concludes Alexandru Nicolcioiu.

For source of the interview, click here.