Mercuria has completed a $50m equity investment in Amromco, the largest independent upstream gas producer in Romania.

The equity will be used to accelerate Amromco’s growth in Romania and across Eastern Europe by expanding on existing partnerships and strengthening its position in the region. Partners include Petrom, a subsidiary of OMV and the largest oil & gas producer in Eastern Europe, and RomGaz, a state-owned company and the largest natural gas producer in Romania.

The investment will also provide additional funding to accelerate the development of the Company’s other existing assets, which comprise 30 producing, development and exploration concessions across Romania, and enable it to look for additional JV and acquisition opportunities in Eastern Europe.

Under the recently closed transaction, Amromco acquired 3 oil fields in Northeastern Romania from Petrom and intends to further cooperate with Petrom in the region. Additionally, Amromco has partnered with RomGaz since 2003. Over that time, it has successfully assisted in developing and enhancing production from a number of RomGaz’s fields, with incremental production totaling of approximately 2 Bcm.

As part of the agreement, Amromco and Mercuria will also establish a marketing joint venture for commodities in Romania, providing additional gas marketing opportunities. Arie Pilo, Mercuria Investment Manager, has been appointed to the Board of Amromco as a non-executive Director, bringing significant energy investment expertise.

First Reserve, the largest global private equity firm exclusively focused on energy, will remain Amromco’s majority shareholder. The Company’s management team also retains a significant interest.

Amromco has a proven track record of re-development and production in Romania over a period of 11 years. This includes a drilling and workover success rate of over 80%. Current production provides growing cashflows, underpinning the Company, creating additional opportunities and enhanced value for shareholders. Through a combination of gas price liberalization in Romania and export market opportunity, Amromco is also well placed to benefit from improved gas pricing. 

Shameek Konar, Chief Investment Officer of Mercuria, stated:
"Mercuria is delighted to partner with Amromco and First Reserve in this investment. We believe Romania is poised to become a significant energy hub in the region and Amromco is uniquely positioned to become one of the relevant participants in the ongoing gas market liberalization."

Arie Pilo, Mercuria Investment Manager, commented:
"This is an exciting investment for Mercuria as we partner with the largest independent gas producer in Romania and the leading energy private equity firm. We’ve been impressed by the Company’s well balanced portfolio of assets, Romanian operational capabilities and track-record, and its ability to leverage these attributes to successfully grow in Romania and the region. Furthermore, Amromco’s management team bring decades of experience in country as well as significant technical expertise. We look forward to adding value to the partnership through our extensive experience in gas and oil marketing".