BUSINESS OPPORTUNITIES IN ROMANIA’S ENERGY SECTOR A Market Briefing U.S. Commercial Service Bucharest June 2, 2010

Summary Energy Resources Energy Mix Market structure Targets Business Opportunities How 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

Energy Market Structure GENERATION Hidroelectrica Termoelectrica CE Turceni CE Rovinari CE Craiova Nuclearelectrica Others TRANSMISSION Transelectrica OPCOM market operator 100% subsidiary DISTRIBUTION AND SUPPLY Electrica Banat - ENEL Electrica Dobrogea - ENEL Electrica Oltenia - CEZ E.ON Moldova Electrica Muntenia Sud - ENEL Electrica Muntenia Nord Electrica Transilvania Nord Electrica Transilvania Sud Others

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 privatized Petrom (owned by Austrian OMV) is the largest oil company Other 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 Turceni Rovinari Craiova Parts of Hidroelectrica Lignite Producer Electrica GoR “rebundles” energy assets back into two vertically- integrated companies. Parts of Termoelectrica Parts of Hidroelectrica Coal Producer Hidroenergetica

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 Fed Nuclear Construction of 2 additional reactors in Cernavoda Construction 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 Tel Fax

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