Following the announcement last week of Hellenic Petroleum’s 1st quarter results. (see May 21st report in energia.gr) the company has presented latest information on its five year business plan. Key points of the plan as reported included the following:
In the scope of implementing the five – year business plan, the company engaged in the following main activities in the first quarter of 2003:
· In the petrochemical sector with the aim of upgrading production and thus improving even more the sector’s profitability, the project to increase the capacity of the metalized film production (metalizer) was accelerated. The new products will increase the added value per tonne produced by EURO 300 with a gradual increase to approximately EURO 1550.
· In the Aspropyrgos industrial area a major investment study is currently underway aiming at increasing propylene production and thus reducing imported quantities which are essential for feeding the polypropylene unit, with the target of further increasing the profitability of the vertically integrated activities in the petrochemical sector.
· The Aspropyrgos – Elef. Venizelos Airport jet – fuel pipeline is almost complete and operation is expected to begin in mid June 2003.
· Following the acquisition of the LPG carrier “MELINA” the incorporation of more vessels to meet a significant part of the Group’s demand for the transport of petroleum products is planned.
· In the power generating sector the tender procedure for the selection of the contractor for the construction and the equipment supply of the 390 MW plant in Thessaloniki was finalized. The Austrian company VA TECH HYDRO (General Electric gas turbine technology) was selected and the contract terms have already been agreed with completion date July 2005. It is noted that the financing scheme proposed by VA TECH FINANCE with the quarantee of the Export Agency of Austria, covering more than 80% of the project’s capital expenditure, has been agreed with particularly favourable terms thus significantly improving the economic return of the project.
· The consortium of HELLENIC PETROLEUM S.A. (49%) with OMV (51%) in Albania started on April 29th 2003, the first drillings in the area of Paleokastra. Similar drillings are scheduled in another area by the end of the year. The total investments up to the year 2006 are estimated to be in the area of $ 60 M.
· The consortium of HELLENIC PETROLEUM S.A. (37,5%), SIPETROL U.K. (37,5%) and OIL SEARCH Australia (25,0%) in the framework of the NEW EPSA ROUND 2000 concessions round of Libya, has submitted an offer for 4 exploratory areas. Negotiations with NOC (National Oil Company of Libya) were carried out during the course of the first quarter to define the respective areas and finalize the relevant contracts. If a final agreement is reached HELLENIC PETROLEUM’s investment for the next five years in this area is estimated to be at the level of $ 20 M.
· With the acquisition of Jugopetrol A.D. Kotor, HELLENIC PETROLEUM also acquired the rights for hydrocarbon exploration and production in three offshore oil promising areas in Montenegro. In one area 51% of the rights are held by the British company RAMCO and in the other two by GLOBAL an Australian interest company. All three areas are currently being explored. After negotiations HELLENIC PETROLEUM has finalized an agreement with RAMCO for them to proceed with advanced 3D geophysical exploration and drilling at their expense. HELLENIC PETROLEUM will have a substantial role in production if exploration is successful, and will be co-operator with RAMCO in the development and exploitation of the fields.
· HELLENIC PETROLEUM is evaluating hydrocarbon exploitation and production opportunities in Russia and Kazakstan in collaboration with other companies.
· The Group of HELLENIC PETROLEUM is currently present in seven countries (Fyrom, Albania, Cyprus, Montenegro, Serbia, Bulgaria and Georgia) where it operates through a retail network of 140 service stations and also holds majority stake in the Fyrom refinery. It is the Group’s strategic objective to increase the current level of sales in the region from 1.5 million tons annually to 2.0 million tons in the short term.