BUSINESS OPPORTUNITIES IN ROMANIA’S ENERGY

SECTOR

A Market Briefing

U.S. Commercial Service BucharestJune 2, 2010

Summary

Energy ResourcesEnergy MixMarket structureTargets Business OpportunitiesHow can we help you?

Romania’s Energy Reserves

Oil: 0.5 billion barrels

Natural Gas: 0.65 trillion cubic meters

Coal: 422 million tons

• the largest oil and natural gas reserves in Central and Eastern Europe

• low import dependency; below the EU average (29%)

Romania’s Energy Mix

Solid; 37,0%

Hydro; 30,0%

Nuclear; 21,0%

Liquid fuel; Gas; 12%

Energy Market Structure

Major Producers

• Termoelectrica 5,520 MW

• Hidroelectrica 6,300 MW

• Turceni S.A., Rovnari S.A.,Craiova S.A. – 2310MW, 1320 MW, 930 MW

• NuclearElectrica – (2 operational reactors) 700MW / each

Distribution Companies

Power Grid Operator Transelectrica 77 power transforming substations with a capacity of about 35,000 MVA, and 8,955 km of OHL’s of 110/220 kV, 400 kV and 750 kV

Oil and Gas Market Structure

Oil market fully privatizedPetrom (owned by Austrian OMV) is the largest oil companyOther presences: Rompetrol (Kazahstan),

Lukoil (Russia), MOL (Hungary) and Agip (Italy)Exxon involved in off shore exploration in the Black Sea

Gas market Romgaz (state owned) and

Petrom

2010: Year of Restructuring

GoR “rebundles” energy assets back into two vertically-integrated companies.

Priorities and Targets

• Become a regional power exporter by 2020

• Up to €12 billion investment in new power generation facilities;

• Encouraging state partnerships with private energy investors;

• Sell-offs of minority stakes in state-owned power companies;

• Promotion of renewable and nuclear energy;

• Revamping old capacities.

Business Opportunities

GoR is seeking joint ventures with private investors for electric power production

Coal FedNuclearConstruction of 2 additional reactors in CernavodaConstruction of a new nuclear power plant

Isalnita project – 500MW

Nuclear (1)

• Increasing share in Romania’s energy mix (18% in 2008; 21% in 2009)

• Cernavoda - nuclear power plant

• Nuclearelectrica – plant operator

• CANDU design; GE supplier of equipment

• 2 reactors operational

• 2 under construction (Public-Private

partnership)

• Plans for building an additional NPP,

probably in Transylvania

Nuclear (2)

• Nuclearelectrica: second biggest electric power provider

• Source of energy security for Romania

• Ability to fabricate nuclear fuel domestically

• Natural uranium deposits to last for 30 to 50 years at current usage levels

• Meeting EU climate change targets

• Opportunities in plans to build an additional plant

• Open to any western design to avoid dependence on Russia

Wind

• 2008: year of wind• Major deal in the energy

sector: 600MW wind farm

to be built by CEZ• Real estate market

sagging• Saturated markets (Germany, Greece)• 18000MW wind potential

Market Entry Tactics

• Investigate and understand market including legal and financing environment

• Understand funding mechanisms

• Find partner

• Stay apprised of developments

Contact Details

Maria Nitoiu

U.S. Commercial Service – Romania

American Embassy Bucharest

Email: Maria.Nitoiu@mail.doc.gov

Tel. 40.21.200.33.79 Fax 40.21.316.0690

THANK YOU!