Smirnov, NIS România: "We are interested in acquiring gas stations from the existing chains"

Reporter: How is the opening of new gas stations in Romania going?

Vadim Smirnov: We have recently opened the thirteenth gas station and ten more are still under construction. By the end of the year, we are hoping to reach thirty Gazprom gas stations in Romania, if the weather allows that construction activity.

Reporter: Are you pleased with the current pace of gas station openings?

Vadim Smirnov: Honestly, I am not that pleased because NIS' plan is to have 120 gas stations in Romania by the end of 2015. If we keep going at the current rate, we will probably not reach our goal. My goal is for NIS to reach 120 gas stations in 2015 and to accelerate the openings.

Reporter: What is the difficulty? Is it bureaucracy or securing good locations?

Vadim Smirnov: The network of gas stations in Romania is very well developed. There over 2,000 gas stations and it is not easy to find good locations for our projects. There is also the difficulty in securing the building permits. I had no idea it can take as much 4-5 months.

Reporter: Are you still negotiating with ENI the acquisition of the AGIP gas stations in Romania? Are you in talks with other operators in Romania?

Vadim Smirnov: We also have the possibility of acquiring assets from the operators that are present in Romania to reach our goal of 120 gas stations in 2015. When we have proposals to buy, we review them. We are carefully watching all market opportunities.

At this time, we do not have anything concrete when it comes to acquiring assets. We had talks with several gas station owners, not just with the representatives of the Agip chain. We are interested in acquiring gas stations. What is important is also for the owners of these gas stations to be willing to sell them.

In Bosnia, NIS decided to acquire the gas stations from OMV. It is clear that what we succeeded in doing there, we could do in Romania as well. But like I said before, we do not have any concrete deal at the moment. The situation is logical. There are talks of a potential acquisition of the Agip gas stations the moment NIS enters Romania. The Agip network is the smallest in Romania - it has 32 gas stations.

Reporter: How are the explorations for gas and oil in the Western area of Romania progressing?

Vadim Smirnov: They are progressing with difficulty, but not without results. We have positive results on a block we have leased, but we still need to confirm the commercial quantities. We are in the evaluation period now.

Reporter: Have your received valid licenses for all the leased locations?

Vadim Smirnov: Unfortunately, no. The problem of the delays in securing the licenses persists. We are still waiting on the licenses for three locations.

Reporter: Why is it so hard? The perimeters have been leased following a call for bids held in 2010.

Vadim Smirnov: I don't know. Go ask the Government. We have to comply with the procedures and the laws of the country and that is what we are doing. I think that this situation needs to remedied, and the licenses need to be granted as soon as possible. It would be a good thing for Romania as well as for investors. We are not losing our hope that we will have the licenses soon. We have investment commitments made as part of our lease and we will honor them.

When NIS made this decision to invest in Romania it didn't know things would take so much time. If it had, the decision may have been different. But NIS is here and it is decided to see its ambitious investment plan all the way through. The money has been waiting to be invested for two years.

Reporter: Are you doing explorations for shale gas or not in the perimeters that have been leased to you in Romania?

Vadim Smirnov: No. We do not have a permit from the authorities to do so. Whoever doesn't have a permit does not do exploration or exploitation. We only explore the conventional reserves of gas and oil. And if this answer is not enough, I also have to tell you that NIS does not have the specific technology for exploring and exploiting shale gas.

Gazprom, the majority shareholder of NIS, isn't in charge of the exploitation of shale gas, nor in Serbia or in Russia.

Reporter: Is it true that Russia is only now evaluating its shale gas reserves?

Vadim Smirnov: In Russia, talks on the subject have only just begun. We have to see what we have and what we don't. Shale gas has already been exploited in the US with good results. It is normal to try and assess, as a country, how you are doing with those reserves. But we are not doing explorations. Gazprom does not have the technology for that. It is a matter for the future.

Reporter: How would you comment on the public statement made by president Traian Băsescu referring to Gazprom, amid the protests against the shale gas explorations? He said that the Russian giant has every interest in Romania not exploiting the gas in the Black Sea or the shale gas and he stressed that "in Western Romania we have no protests against Gazprom, just like we have no protest against the fact that Lukoil has a lease at the Black Sea".

Vadim Smirnov: No comment. President Băsescu has probably received some good information.

Reporter: Out of all the total budget allocated to Romania, how much has NIS spent so far?

Vadim Smirnov: We have spent approximately 50 million Euros, and about 10 million Euros on exploration. We have significant amounts allocated for investments in exploration, about 150 million Euros in the coming years.

Reporter: The National Agency for Mineral Resources announced that it will soon hold new calls for tenders for the leasing of on-shore and off-shore oil perimeters. Is NIS interested in that?

Vadim Smirnov: NIS does not have the experience or the technology needed for off-shore exploitation. But I can not confirm that Gazprom would not have an interest because the group does have the necessary technology. NIS is however, still interested in leasing new on-shore perimeters for standard oil and gas deposits. When the call for tenders gets launched, we will conduct an assessment to see what our decision will be.

Reporter: So you are not discouraged by bureaucracy or delays...

Vadim Smirnov: No. We are moving forward in Romania.

Reporter: Are you considering the acquisition of a refinery in Romania?

Vadim Smirnov: No. The one in Pancevo is modern. We have invested heavily in it. We have modern and competitive products, which we will bring to Romania. We want to come to the Romanian market with our products.

Reporter: Where does the fuel you currently sell in the Gazprom refineries come from? And how is it that you have the best price on the market in some areas?

Vadim Smirnov: For the moment, we get our fuel from the Romanian market. It is a matter of cooperation in the market. It is cost-efficient and we have a small profit, even if in certain areas, we have the lowest prices. Prices will be even better when we start supplying our stations with fuel from Pancevo. Which I think could actually happen starting this year.

Reporter: Thank you!