EXCLUSIVE Gazprom wants to expand into the neighboring countries, especially on the Romanian market

• Interview with Mr. Vadim Smirnov, NIS Regional Manager for Romania

Reporter: At the opening of the gas station network, many spoke about Gazprom as a future strategic partner for Romania. Besides the area of energy generation, what else might this strategic partnership include?

Vadim Smirnov: NIS has already established a stable supply of bunker fuel for ships in Constanţa, (ed. note: this year, the company has acquired Marine Bunker Balkan of Constanţa, specializing in fueling ships), jet fuel for Timişoara, as well as bitumen for road construction whose quality meets the applicable European standards. Our division, Oilfield Services, has certified two new overhaul plants and oilfield services for operation in Romania and we plan to employ them in our operations in near future, most likely in autumn.

For NIS, as a subsidiary of Gazpromneft, a strategic task is to become one of the most efficient companies in the rapidly evolving oil and energy sector in the Balkans.

After the modernization of the Panèevo Oil Refinery, with its refining capacity expected to reach the volume of five million tons a year by 2020, the company intends to expand its operations to the neighboring countries with the Romanian market as a priority, due to the country's size and logistical advantages.

NIS will expand its business into two directions: the development of its retail network and the exploration and production of crude oil and gas. As of September, our GAZPROM petrol stations will sell fuel of the highest Euro 5 standard produced in the Panèevo Oil Refinery. Our plan is to take at least 10% of the market share by 2016, and at least one third in the premium segment to which the GAZPROM gas stations belong. We plan to invest 150 million Euro in order to achieve that goal.

Reporter: Romania still has many deposits of both natural gas and oil. Would Gazprom be interested in drilling for resources in our country?

Vadim Smirnov: The company's main projects on the Romanian market are also focused on the exploration and production of hydrocarbons (crude oil and natural gas) in the western part of the country. NIS has already began the preparation and the execution of geological and exploration works on the perimeters which are located in western Romania, the counties of Bihor, Arad and Timiş. We have partnered with three companies on these projects: a Canadian one - East West Petroleum Group, an Irish one - Moesia Oil and Gas, and an English one - Zeta Petroleum. Also, today we entered into the contract with the Hungarian company Acoustic Geophysical Services (AGS) through which the AGS specialists will conduct seismic survey on the territory of the Tria concession block (Bihor county). During the exploratory drilling and development of conventional resources, NIS uses advanced technologies in accordance with the EU and international standards in the field. The exploration and production of hydrocarbons will necessitate investments of hundreds of millions of Euros in the initial stage in the case of demonstrated reserves.

 Reporter: It is Gazprom/NIS interested in buying the OMV business?

Vadim Smirnov: We will continue to expand our network of GAZPROM filling stations. To meet that particular goal, we are currently analyzing the market, assessing all possible opportunities for investment, but it is now too early to talk about any concrete deals.

Reporter: If Gazprom - Nis will continue to expand its line of gas stations until 2015, to 120 gas stations, it will become a powerful competitor on this segment. How do you think OMV, Agip or Lukoil, the main suppliers of fuel in Romania, will feel about that?

Vadim Smirnov: Our biggest challenge on the Romanian market is to meet the needs and demand of our customers and I am pretty sure that a strong competition contributes to those objectives to a great extent. Our main goal is to always be one step ahead of the market, constantly trying to come up with new products and services our customers search for and at the same time making sure that they get the best possible value from interacting with our company. Our offer is designed in such a way so as to ensure that our customers benefit from premium products. All filling stations are equipped with modern fuel dispensers with multimedia displays. The fuel dispensers operate on demand to ensure maximum fast service to clients, who can use their cards to pay on the spot.

The gas stations are energy efficient and built in such a manner so as to ensure an adequate environmental protection of underground waters and of the soil.

Reporter: Thank you!