Societatea Nationala de Gaze
Naturale “ROMGAZ” SA
Board of Directors’
Report
2017
Board of Directors’ Report 2017
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Page 2 of 94
Board of Directors’ Report 2017
Strategic Objectives
Review of the Company’s Business
Business Segments
Historic Overview
I.
ROMGAZ 2017 Overview
1.1.
Highlights
1.2.
Romgaz in Figures
1.3.
Important Events
II.
The Company at a Glance
2.1.
Identification Data
Company Organization
2.2.
2.3. Mission, Vision and Values
2.4.
III.
3.1.
3.2.
3.3. Mergers and Organizations, Acquisitions and Divestments of Assets
3.4.
Company Business Performance
3.4.1. Company Overall Performance
3.4.2. Prices and Tariffs
3.4.3. Human Resources
3.4.4. Environmental Aspects
3.4.5 Occupational Safety and Health
Litigations
3.4.6.
Tangible Assets
IV.
4.1. Main Production Facilities
Investment
4.2.
Securities Market
V.
Dividend Policy
5.1.
Company Management
VI.
Board of Directors
6.1.
Executive Management
6.2.
Financial – Accounting Information
VII.
Statement of Financial Position
7.1.
Statement of Comprehensive Income
7.2.
7.3.
Statement of Cash Flows
VIII. Corporate Governance
IX.
9.1.
9.2.
Performance of the Mandate Contract/Director’s Agreement
Objectives and Performance Criteria
2017 Results
5
5
6
12
15
15
16
17
19
20
20
24
25
29
29
33
37
40
45
46
47
47
52
57
59
62
62
63
66
66
68
71
72
88
89
91
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Board of Directors’ Report 2017
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Page 4 of 94
Board of Directors’ Report 2017
Romgaz obtained the approval for partial financing of Iernut power plant development
from the National Investment Fund
On January 18, 2017 the Ministry of Energy notified the approval of the Financing
Application for the investment “Combined Cycle Gas Turbine”, application submitted for
funds to be provided from the National Investment Plan. The Application File was submitted
for the public acquisition contract No 13384/ October 31, 2016 concluded with the association
Duro Felguera SA - SC Romelectro SA, having as scope the turnkey contract “Development
of Iernut Power Plant (CTE Iernut) by construction of a new gas turbine combined cycle
power plant”. On December 7, 2017 was signed the Contract for the grant for investment and
on December 14, 2017 the first application for reimbursement was submitted to the Ministry
of Energy.
Romgaz obtained the approval for some petroleum agreements extension
The volume of proved initial reserves increased for a number of natural gas commercial fields
governed by petroleum agreements, following the performance of investment works. Thus,
the period of gas recovery increased as compared to the initial estimation (which was below
the legal limit of 30 years as provided under the Petroleum Law No 238/2004).
Given the above mentioned, the Government of Romania approved in the meeting of
September 27, 2017:
Licensing petroleum agreements for development-production and Licensing Petroleum
Agreements for production concluded between the National Agency for Mineral
Resources and Romgaz for 54 commercial fields;
Licensing petroleum agreements for development-production concluded between the
National Agency for Mineral Resources and Romgaz and Amromco Energy SRL for 8
commercial fields.
Once such petroleum agreements approved, the licensing rights and consequentially the rights
to exploit related blocks are confirmed, eliminating the risk mentioned in Romgaz Prospectus
of the Initial Public Offering related to the validity of such petroleum agreements.
Romgaz continues the development of Caragele project
Romgaz continues the development of the field, investments reaching EUR 40 million
already. Further investment of about EUR 100 million will follow in new production and
development wells. A workshop will be added to the new structure to support the company’s
activity in the area, as a consequence of intensification of the exploration program in North-
East Muntenia. The activity will consist in drilling exploration wells, building collecting and
gathering pipelines connected to the wells proving results during testing, which will be
brought into production.
Page 5 of 94
Board of Directors’ Report 2017
Reserve Status
(bcm/% of total)
Contingent Resources Status
(bcm/% of total)
12.8
15%
10.6
13%
60.9
72%
32.4
64%
5.2
10%
12.9
26%
Proved
Probable
Possible
1C
2C
3C
Works regarding the “Development of Iernut Thermal Power Plant by Building a New
Combined-Cycle Power Plant (CCGT)ˮ
One of Romgaz’ strategic direction is consolidating its position on the energy supply markets.
Thus, in the field of energy generation, the implementation of this investment project aims to
enhance the efficiency of activity by: increasing the efficiency of the power plant to 56% at
the least, compliance with the environmental requirements (NOx, CO2 emissions) and
enhancement of safety in exploitation. The project is financed from own resources and PNI
(National Investment Plan) funds, in accordance with Government Decision No 1096/2013,
updated. Romgaz concluded the works contract no 13384/ October 31, 2016 with the
Partnership between Duro Felguera S.A. and SC Romelectro S.A. The contract may be
summarized as follows: (1) the scope of the contract is implementation of the turnkey project
(design, delivery of equipment, supply of works and start-up) “Development of the Iernut
Thermal Power Plant by Building a New Combined-Cycle Power Plant (CCGT)ˮ, (2) time
limit for completion of works: 36 months from the date on which the contract enters into force
(the contract enters into force in 5 working days from the date of approving the file of
financing from PNI funds, in accordance with the Government Decision No 1096/2013,
updated), (3) the estimated value of the contract (VAT excluded): EUR 268,836,329.82.
During 2017 land development works and power-installed foundation anchors works have
been performed. The documents for obtaining the authorizations for works and exploitation of
the new power plant have been prepared. Construction authorizations for the new power plant
and new hydrogen plant have been obtained. One gas turbine with its related equipment and
the new hydrogen plant have been delivered. The technical design project is currently subject
to approval.
The Company recorded a net profit in 2017, in amount of RON 1,854.7 million, higher by
81.03% than in 2016, namely by RON 830.2 million, and a net income per share of RON 4.81
as compared to RON 2.66 in 2016.
The net profit margins (40.5%), EBIT margin (47.1%) and EBITDA (59.1%) are higher than
the ones reported last year (30.0%, 36.9% and 46.0% respectively), confirming that the
company continues to maintain a high profitability.
Page 6 of 94
Board of Directors’ Report 2017
Natural gas consumption in Romania recorded in 2017 an increase of approx. 4.7% as
compared to the previous year, according to the ANRE and the Company’s consumption
estimations1.
The natural gas production of the Company was higher than in 2016 by 22.2%, namely 939
million m3 (5,158 million m3 in 2017 vs 4,219 million m3 in 2016). This production, according
to estimated data, ensured Romgaz a 50.53% market share of gas deliveries within the
consumption of domestic gas, and a 46.27% market share of deliveries of the total
consumption of Romania.
The 2017 production was higher than the one recorded in the previous year due to the
cumulative factors below:
1.
2.
3.
4.
Lower temperatures during the first period of the year, generating a higher gas
consumption in Q1;
Significant increase of electricity production at the gas fuelled power plants;
Increase of natural gas consumption by Romgaz’s Iernut power plant which consumed
506 million m3 of natural gas, higher by 77 million m3 than in 2016;
High summer temperatures leading to increased electricity consumption.
The 2017 electricity production of Romgaz was 14.5% higher than 2016 production, namely
1,863,788 MW and represents 2.68% of Romania’s total electricity production. According to
Transelectrica, Romgaz’ market share was 2.95%.
The table below shows a summary of the main production indicators, royalty and storage
services:
Q4
2016
Q3
2017
Q4
2017
1,185
1,023
84
1,192
1,191
83
1,406
1,393
103
Δ Q4
(%)
18.7
36.2
22.6
Main indicators
2016
2017
Gas production (million m3)
Condensate production (tons)
Petroleum royalty (million m3)
4,219
5,864
292
5,158
5,742
371
726.3
465.8
398.3
-45.2
Electricity production(GWh)
1,628.3
1,863.8
Δ ‘17/’16
(%)
22.2
-2.1
27.1
14.5
509.9
9.7
537.0
5.3
65.0
774.3
121.8
87.4
Invoiced UGS withdrawal services
(million m3)
Invoiced UGS injection services
(million m3)
1,440.9
1,745.5
21.1
1,367.4
1,497.6
9.5
Natural gas quantities produced, delivered, injected into and withdrawn from gas storages are
shown in the table below (million m3):
1 As ANRE did not publish the gas market monitoring reports from January 2017, the data used for national
consumption are estimated data.
Page 7 of 94
Specifications
2015
2016
2017
Ratios
Board of Directors’ Report 2017
Item
No
0
1.
1.1.
1.2.
2.
3.
4.
5.
6.
7.
Gross production – total, including:
1
*own gas
*Schlumberger (100%)
Technological consumption
Net gas production (1.-1.2.-2.)
Own gas injected into UGS
Own gas withdrawn from UGS
Difference from conversion to Gross Calorific Value
Delivered own gas (3.-4.+5.-6.)
2
5,562.7
3
4,219.4
4
5,157.5
5=4/3x100
122.2%
5,359.7
4,068.0
4,987.7
122.6%
203.1
151.3
169.8
112.2%
78.5
54.5
74.5
136.7%
5,281.1
4,013.6
4,913.2
122.4%
738.4
409.5
16.1
414.7
462.6
4.5
253.5
61.1%
723.5
156.4%
2.7
4,936.1
4,057.0
5,380.5
132.6%
-
79.2
0.0
-
8.1. Gas sold in UGS
8.2. Gas delivered to CTE Iernut and Cojocna from Romgaz’s
527.0
463.7
506.4
109.2%
gas
9.
Own gas delivered to the market (7.+8.1.-8.2.)
4,409.1
3,672.5
4,874.1
132.7%
10. Gas from joint ventures– total, including:
*Schlumberger (50%)
*Raffles Energy*) (37.5%)
*Amromco*) (50%)
11.
Gas purchase
imbalances)
from domestic production (including
168.9
101.5
0.5
66.9
17.1
149.0
175.5
117.8%
75.7
0.3
73.0
11.2
84.9
112.2%
0.1
90.5
27.0
33.3%
124.0%
241.1%
12.
Traded domestic gas (9.+10.+11.)
4,595.1
3,832.7
5,076.6
132.5%
13. Gas delivered from domestic production (8.2+12.)
5,122.1
4,296.4
5,583.0
129.9%
14.
15.
Delivered import gas
Gas delivered gas to CTE Iernut and Cojocna from other
sources (including imbalances)
3.0
6.8
4.8
33.0
40.3
485.3%
839.6%
16.
Total delivered gas (13.+14.+15.)
5,125.1
4,308.0
5,656.3
131.3%
*
*
Invoiced UGS withdrawal services
Invoiced UGS injection services
1,656.7
1,440.9
1,745.5
121.1%
1,673.1
1,367.4
1,497.6
109.5%
*) –as regards Romgaz-Schlumberger association, produced gas is fully included in Romgaz production, and
then split in equal shares between the two partners, and traded separately. With respect to the joint ventures
with Raffles Energy and Amromco, the obtained gas does not represent Romgaz production but the value of gas
is reflected in Romgaz revenue, proportionally with its respective participating interest share in the joint
ventures
Natural gas production lies in the parameters forecasted in the 2017 program, achieving
108.6% of the planned production (5,158 million m3 – achieved planned vs 4,750 million m3
– planned).
The production level was maintained by the ongoing production rehabilitation projects of the
main fields, workover and recompletion operations for 188 wells, installing new compression
capacities and bringing into production new fields.
The natural gas production during 1997-2017 is shown below:
Page 8 of 94
Board of Directors’ Report 2017
m
c
n
o
i
l
l
i
b
10
9,1
8,8
8,4
8
7,3
7
6,6
6,3
6,2
5,9
5,9
5,8
5,8
5,6
5,7
5,7
5,7
5,6
5,2
4,2
12
10
8
6
4
2
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Increase in Romgaz’s electricity production by 14.5% compared to previous year, as shown in
the table below, is closely connected with reduced electricity production from hydro and wind
sources, and to the cold or hot periods.
The table below shows the quarterly electricity production for 2017, as compared to 2016:
*MWh*
2016
2
318,720
191,847
391,472
726,300
2017
3
611,483
388,249
465,812
398,300
1,628,339
1,863,844
Variation
4=(3-2)/2x100
91.86%
102.38%
18.99%
-45.16%
14.46%
1
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year total
Romgaz is one of the largest gas suppliers in Romania. The evolution of gas supplies2 during
2008-2017 is indicated below:
2 comprises own gas from domestic production, including gas delivered to CTE Iernut and Cojocna, 50% of the
gas from Schlumberger joint venture and gas purchased from Romanian domestic production from other
producers
Page 9 of 94
Board of Directors’ Report 2017
7000
6000
5000
m
c
n
o
i
l
l
i
m
4000
3000
2000
1000
0
343
304
680
1018
606
310
81
3
5572
5563
5513
5200
5156
5304
5529
5055
33
5623
7
4223
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Gas from domestic production
Import gas
Q4
2016
Q3
2017
Q4
2017
Δ Q4
(%)
Main indicators
2016
2017
Δ ‘17/’16
(%)
* million RON *
1,010.3
849.4 1,343.5
989.3
914.8 1,544.1
33.0
56.1
Revenue
Income
627.2
547.8
362.1
367.0
51.3
50.9
310.9
316.1
763.7
780.4
109.7
670.7
Expenses
21.8
115.5 Gross profit
Profit tax
113.8
115.7 Net profit
358.1
362.1
773.7
116.1
EBIT
n/a
n/a
529.3
n/a
EBIT (adjusted) *)
312.6
475.7
914.9
192.7
EBITDA
n/a
0.8
n/a
0.8
670.5
n/a
1.7
112.5
30.8
37.2
49.9
62.0
35.4
42.6
57.6
62.7
30.9
56.0
68.1
120.4
6,246
6,194
6,198
-0.8
EBITDA (adjusted) *)
share EPS
Earnings per
(RON)
Net profit ratio (% from
Revenue)
EBIT Ratio
Revenue)
EBITDA Ratio
Revenue)
Number of employees at the
end of the period
from
from
(%
(%
3,411.9 4,585.2
3,816.8 4,786.0
2,536.1 2,604.9
1,280.7 2,181.2
256.1
326.4
1,024.6 1,854.7
1,258.6 2,158.8
n/a 1,914.5
1,569.6 2,707.7
n/a 2,463.3
2.7
4.8
34.4
25.4
2.7
70.3
27.5
81.0
71.5
n/a
72.5
n/a
77.8
30.0
40.5
35.0
36.9
47.1
27.6
46.0
59.1
28.5
6,246
6,198
-0.8
*) Adjusted EBIT/adjusted EBITDA are EBIT/EBITDA adjusted by the income recorded following the fiscal
audit completion related to excise, taking into account the single nature of such income
The figures above are rounded and therefore there may be slight differences after reconciliation
Note: income and expenses do not include in-house works capitalized as non-current assets.
Page 10 of 94
Board of Directors’ Report 2017
The higher revenue as compared to the previous year is mainly related to weather conditions,
and especially due to the increased demand in the electricity generation sector.
Due to the above mentioned causes and thanks to company efforts, the net profit, EBIT and
EBITDA are significantly higher as compared to year 2016. At the same time, the indicator
ratios against the revenue are higher than the ones recorded in the previous year and continue
to be highly favourable: 40.5%, 47.1% and 59.1% (as compared to 30.0%, 36.9% and 46.0%
in 2016), confirming the high profitability of the company.
The previous years carried-forward results allocation, with a positive impact on the net profit,
was in 2013 in amount of RON 157.5 million, in 2014 in amount of RON 241.90 million, in
2015 in amount of RON 214.0 million and in 2016 in amount of RON 547.3 million. In 2017
additional dividends in amount of RON 747.7 million have been approved to be allocated
from other reserves.
Investments play an important part in arresting the production decline, which is achieved
through the discovery of new reserves and the improvement of the current recovery rate due
to the rehabilitation, development and modernization of existing facilities.
For 2017, Romgaz scheduled investments worth RON 1,143 million and invested RON 781.8
million, less by 31.6%. The 2017 investments were higher by 57.1% than the 2016 ones (RON
497.7 million). The investments were financed exclusively from own sources, and a part of
investments for CTE Iernut will be reimbursed from the National Investment Plan.
The value of fixed assets commissioned during the reporting period was RON 392 million.
During 2013-2017, the Company made investments worth approx. RON 4.15 billion, as
follows:
Year
2013
2014
2015
2016
2017
Total
Value
(RON
thousand)
848,247
1,085,497
937,916
497,716
781,768
4,151,144
The structure of investments is shown in the chart below:
23,82%
1,25%
5,47%
0,26%
0,30%
I. Exploration, production works
II. Investments in existing tangible assets
(development and modernization)
III. Sustaining the underground storage
capacity
IV. Independent equipment
V. Environment works
VI. Expenses for studies and projects
68,91%
Since November 12, 2013, the company’s shares have been traded on the regulated market
governed by BVB (Bucharest Stock Exchange) under the “SNG” symbol, and the GDRs on
the regulated market governed by LSE (London Stock Exchange) under the “SNGR” symbol.
Page 11 of 94
Board of Directors’ Report 2017
Performance of Romgaz shares compared to the evolution of BET index (Bucharest Exchange
Trading) from listing to December 31, 2017 is shown below:
40,00
35,00
30,00
25,00
20,00
15,00
e
r
a
h
s
/
N
O
R
10,00
5,00
0,00
3
1
0
2
/
2
1
/
1
1
3
1
0
2
/
1
1
/
2
1
.
4
1
0
2
1
0
7
1
.
.
4
1
0
2
2
0
7
1
.
4
1
0
2
/
8
1
/
3
4
1
0
2
/
6
1
/
4
.
4
1
0
2
5
0
2
2
.
.
4
1
0
2
6
0
4
2
.
.
4
1
0
2
7
0
3
2
.
4
1
0
2
/
2
2
/
8
.
4
1
0
2
9
0
4
2
.
.
4
1
0
2
0
1
3
2
.
.
4
1
0
2
1
1
1
2
.
.
4
1
0
2
2
1
3
2
.
10000,00
9000,00
8000,00
7000,00
6000,00
5000,00
4000,00
3000,00
2000,00
1000,00
0,00
5
1
0
2
/
9
2
/
1
5
1
0
2
/
7
2
/
2
5
1
0
2
/
0
3
/
3
5
1
0
2
/
5
/
5
5
1
0
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/
5
/
6
5
1
0
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/
6
/
7
5
1
0
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/
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/
8
5
1
0
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/
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/
9
5
1
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/
2
/
0
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1
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/
2
/
1
1
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1
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/
8
/
1
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1
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/
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/
2
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1
0
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/
8
/
3
6
1
0
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/
6
/
4
6
1
0
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/
6
/
5
6
1
0
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/
6
/
6
6
1
0
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/
6
/
7
6
1
0
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/
4
/
8
6
1
0
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/
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/
9
6
1
0
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/
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/
0
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1
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/
2
/
1
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1
0
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/
2
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1
0
2
/
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/
1
7
1
0
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/
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/
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7
1
0
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/
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/
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1
0
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/
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7
1
0
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9
/
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1
0
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2
1
/
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7
1
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1
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/
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7
1
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/
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1
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1
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7
/
1
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7
1
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2
/
8
/
2
1
SNG
BET
March 14, 2017
The kick-off meeting of the project for “Developing of the Iernut Thermal Power Plant by
Building a New Combined-Cycle Power Plant (CCGT)ˮ took place on March 14, 2017 at
SPEE Iernut between the representatives of Romgaz and those of Duro Felguera and
Romelectro.
April 1, 2017
Prices of domestic production gas have been liberalized since April 1st, 2017 in compliance
with the GEO No 64/2016 for amending and supplementing the Electricity and Natural Gas
Law No 123/2012.
April 25, 2017
By Resolution No 1/2017 of the Ordinary General Meeting of Shareholders:
The income and expenditure budget of the company for 2017 was approved;
The members of the Board of Directors of Societatea Naţională de Gaze Naturale
Romgaz S.A., namely Dumitru Chisăliţă, Aristotel Marius Jude, Stoicescu Răzvan
Florin, and Negruţ Aurora were revoked, following the expiration of their mandates in
May 2017;
The following were elected as interim directors of Societatea Naţională de Gaze
Naturale Romgaz S.A.: Stan Bogdan – Nicolae, Chirilă Alexandru, Gheorghe
Gheorghe-Gabriel and Metea Virgil Marius.
June 7, 2017
By Resolution No 14 the Board of Directors approved the renewal of the Contract of Mandate
for the Director-General, Metea Virgil-Marius and the modification of 2017 performance
indicators as they were approved by the General Meeting of Shareholders in the income and
expenditure budget.
During the same meeting Gheorghe Gheorghe-Gabriel was elected as Chairman of the Board
of Directors.
Page 12 of 94
Board of Directors’ Report 2017
July 27, 2017
The Board of Directors ascertained under Resolution No 18 the vacancy of one director
position, by resignation of Tcaciuc Sebastian-Gabriel, and appointed Baciu Sorana-Rodica as
interim director until the next Ordinary General Meeting of Shareholders.
September 7, 2017
Further to company shareholders casting of cumulative vote upon the request of the Romanian
State represented by the Ministry of Energy, the Ordinary General Meeting of Shareholders
elected as members of the Board of Directors for 4 months period the following:
Gheorghe Gheorghe-Gabriel;
Stan Bogdan-Nicolae;
Ciobanu Romeo-Cristian;
Nistoran Dorin-Liviu;
Cermonea Ioan-Daniel;
Grigorescu Remus;
Baciu Sorana-Rodica.
September 27, 2017
The Romanian Government approved the following:
The Licensing Petroleum Agreements for Development-Production and the Licensing
Petroleum Agreements for Production concluded between the National Agency for
Mineral Resources and Romgaz for 54 commercial fields;
The Licensing Petroleum Agreements for Development-Production concluded
between the National Agency for Mineral Resources and Romgaz and Amromco
Energy S.R.L. for 8 commercial fields.
October 17, 2017
Iernut town hall issued the construction authorizations for Developing of the Iernut thermal
power plant by building a new combined-cycle power plant.
November 2, 2017
By Resolution No 30 the Board of Directors appointed Bobar Andrei as Chief Financial
Officer.
December 14, 2017
The first reimbursement application for the National Investment Plan funds for
Development of CTE Iernut project was submitted to the Ministry of Energy.
By Resolution No 36 the Board of Directors revoked the Director General’s mandate
for Metea Virgil Marius;
By Resolution No 37 the Board of Directors appointed Cindrea Corin Emil as interim
Director General for 4 months period, with the possible extension of 6 months, as
provided under the law.
December 20, 2017
By Resolution No 9, further to company shareholders casting of cumulative vote upon the
request of the Romanian State represented by the Ministry of Energy, the Ordinary General
Meeting of Shareholders elected as members of the Board of Directors, as of January 8, 2018,
for 4 months mandate or until the completion of the directors selection process the following:
Nistoran Dorin-Liviu;
Baciu Sorana-Rodica;
Page 13 of 94
Board of Directors’ Report 2017
Ciobanu Romeo-Cristian;
Grigorescu Remus;
Cermonea Daniel-Ioan;
Volintiru Adrian-Constantin;
Anghel Daniel-Florin.
Page 14 of 94
Board of Directors’ Report 2017
Name: Societatea Nationala de Gaze Naturale “ROMGAZ” SA
Main scope of activity: natural gas production and UGS
Address: Medias, 4 Constantin I. Motas Square, 551130, Sibiu County
Trade Registry registration number: J32/392/2001
Fiscal registration number: RO14056826
LEI Code: 2549009R7KJ38D9RW354
Legal form of establishment: joint-stock company
Subscribed and paid in share capital: RON 385,422,400
Number of shares: 385,422,400 each having a nominal value of RON 1
Regulated market where the company’s shares are traded: Bucharest Stock Exchange
(shares) and London Stock Exchange (GDRs)
0040 269 201020
Phone:
0040 269 846901
Fax:
Web:
www.romgaz.ro
E-mail: secretariat@romgaz.ro
Bank accounts opened at: Banca Comerciala Romana, BRD-Groupe Societe Generale,
Citibank Europe, Patria Bank, Raiffeisen Bank, Banca Transilvania, ING Bank, Eximbank,
CEC Bank.
Shareholder Structure
As of December 31, 2017 the shareholder structure is:
The Romanian State3
Free float – total, including:
*legal persons
*natural persons
Total
FREE
FLOAT
30%
Number of
shares
Number of shares
269,823,080
115,599,320
96,797,982
18,801,338
385,422,400
%
%
70.0071
29.9929
25.1148
4.8781
100.0000
The
Romanian
State
70%
3 The Romanian State through the Ministry of Energy
Page 15 of 94
Board of Directors’ Report 2017
During the financial year 2017, the Company did not perform transactions with own shares,
and as of December 31, 2017 did not hold own shares.
Romgaz organization structure is a hierarchy-functional type, with a number of six hierarchy
levels, from company’s shareholders to execution personnel, as follows:
General Meeting of Shareholders
Board of Directors
Director General
Deputy Directors General
Heads of functional and operational compartments subordinated to the Director
General and to the Deputy Directors General
Execution Personnel
The responsibilities of the Board of Directors are detailed in the Company’s Articles of
Incorporation and as well in its Rules of Organization and Operation.
Key people in the structure and for the functionality of the company are the Director General,
the Deputy Directors General, Economic Director, as well as the branches’ directors. The
heads of compartments (branches/departments/directions/offices etc.) representing
the
connection between the upper structure and the employees of the respective compartment are
directly subordinated to the afore-mentioned.
Each compartment has its own well-defined attributions in the company’s Organization and
Operating Regulation and all these elements work as a whole.
The tasks, competencies and responsibilities of the execution personnel are included in the job
descriptions related to each position.
The company has 7 branches set up based on the specific of the activities performed and on
the region (natural gas production branches) as follows:
Sucursala Medias (Medias Branch) having its office in Medias, 5 Garii Street, postal
code 551025, Sibiu County, territorially organized in 8 sections;
Sucursala Targu Mures (Targu Mures Branch) having its office in Tirgu Mures, 23
Salcamilor Street, postal code 540202, Mures county, territorially organized in 8
sections;
Sucursala Ploiesti (Ploiesti Branch) having its office in Ploiesti, 184 G. Cantacuzino
Street, 100492, Prahova County, territorially organized in 2 sections and 2 workshops;
Sucursala de Interventii, Reparatii Capitale si Operatii Speciale la Sonde Medias
(SIRCOSS – Branch for Well Workover, Recompletions and Special Well Operations)
having its office in Medias, 5 Soseaua Sibiului Street, 551009, Sibiu County,
territorially organized in 3 sections and 5 workshops;
Sucursala de Transport Tehnologic si Mentenanta Targu Mures (STTM –
Technological Transport and Maintenance Branch) having its office in Targu Mures, 6
Barajului Street, 540101, Mures County, territorially organized in 3 sections and 3
workshops;
Sucursala de Productie Energie Electrica Iernut (SPEE – Iernut Power Generation
Branch) having its office in Iernut, 1 Energeticii Street, 545100, Mures County;
Page 16 of 94
Board of Directors’ Report 2017
Sucursala Bratislava (Bratislava Branch) having its office in Bratislava, City Business
Centre V.-Karadžičova 16, code 82108, Slovakia.
As of December 31, 2017 the company has a subsidiary “S.N.G.N. ROMGAZ S.A. – Filiala
de Înmagazinare Subterană a Gazelor Naturale DEPOGAZ Ploieşti S.R.L.”, with its
headquarters in Ploiesti, having as scope of activity the natural gas underground storage. The
subsidiary has been set up in order to comply with Directive 2009/73/EC of the European
Parliament and of the Council of July 13, 2009 on common rules for the internal market in
natural gas and repealing Directive 2003/55/EC, as well as with the Natural Gas and
Electricity Law No 123/2012.
Societatea Nationala de Gaze Naturale “ROMGAZ” SA is a company which targets
performance and is determined to generate performance by best employment of energies to
meet its objectives.
Performance, competition and continuous growth of the company’s value both for us and for
the shareholders by means of a better valuation of the human potential and assets, by
predictable and profitable business deals and a better risk management.
ROMGAZ has the potential and the ambition to consolidate and to develop its position as the
most important natural gas company in Romania and to become a leading player on important
Central and Eastern European markets by means of an efficient and competitive production
able to face the increasing pressure exercised by regional and international companies.
Page 17 of 94
Board of Directors’ Report 2017
Increasing
the
company's
value for its
shareholders
Care for the
environment
Quality
products
and services
Efficiency
ROMGAZ
Safety for
the
employees
Social
responsibility
Transparency
Sustainable
development
Page 18 of 94
Board of Directors’ Report 2017
In order to meet its main scope of activity through an efficient use of material, financial,
informational and human resources, the company set the following
:
Increase of the gas resources and reserves portfolio through the discovery of new
resources and the improvement of the recovery rate of already discovered resources
Position consolidation on the energy supply markets
Optimization, development and diversification of the UGS activity by reconsidering its
importance in terms of safety, continuity and flexibility of the natural gas supply
Increasing the company's performance
Identification of new growth and diversification opportunities
Improving the organization structure of the company
Reorganization of the internal audit function
Page 19 of 94
Board of Directors’ Report 2017
The company undertakes business in the following segments:
natural gas exploration and production;
UGS activity;
natural gas supply;
special well operations and services;
maintenance and transportation services;
power generation and supply;
natural gas distribution.
Romgaz is titleholder or co-titleholder, in Romania, of the following petroleum agreements:
petroleum operations for exploration-development-production in 9 blocks with 100%
participating interest and in 4 blocks as co-titleholder, under certain concession
agreements;
154 commercial fields;
7 fields recording experimental production;
exploration and production rights in Slovakia and Poland (until June 2017).
Exploration
Since October 1997, the exploration activity has been carried out in 8 blocks in Transylvania,
Moldova, Muntenia, and Oltenia, in accordance with the Concession Agreement approved by
Government Decision No 23/2000. Fourteen exploration wells were completed in 2017, with
the following results:
5 discoveries with a prospective geological resource (P50) of 3.5 billion m3;
confirmation of hydrocarbon accumulations with a contingent resource (2C) evaluated
at approx. 0.9 billion m3.
Romgaz designs and plans all exploration works based on its own concepts by using modern
specialized software, evaluations of the geological area’s prospectivity displaying specific
features within the blocks under concession, and these are carried out by specific surface
exploration methods for the identification of the areas with hydrocarbon accumulations
(prospects), followed by exploration drilling to prove the presence of accumulations.
The results materialised in reserve replacement ratios, with a highest value of 323% reached
in 2012.
Page 20 of 94
Board of Directors’ Report 2017
The table below shows the evolution of the reserves replacement ratio during 2009-2017:
323
155
92
49
94
82
70
102
42
%
350
300
250
200
150
100
50
0
2009
2010
2011
2012
2013
2014
2015
2016
2017
Reserves replacement ratio was influenced by the reduced volume of updating commercial
reservoirs and by postponing investments related to the infrastructure necessary for
commissioning production facilities. The reserves audit as of December 31, 2017 will be
finalized in H1 2018.
Production
The 2017 annual program for petroleum operations considered the
dynamics of gas demand, reactivation, recompletion and well
work over operations, bringing in production wells resulted from
exploration activities and production wells, maintenance programs
of compressor stations and of dehydration stations, commissioning
of new compressor units and the dynamics of import gas flows
injected into/withdrawn from UGS.
The company’s gas production was higher than the 2016 production (5,158 million m3vs
4,219 million m3). According to estimates, this production ensured Romgaz a 50.53% market
share of deliveries in the gas consumption from internal production and a 46.27% share of
deliveries in Romania’s total consumption.
The production in amount of 5,158 million m3 was 8.6% higher than the planned one, due to:
Lower temperatures at the beginning of 2017;
Increase of gas consumption for generation of electricity;
Increase of gas consumption for generation of electricity by Romgaz’s Iernut power
plant which consumed 506 million m3 of gas, by 77 million m3 more than in 2016.
Higher summer temperatures leading to the increase of electricity consumption.
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Board of Directors’ Report 2017
Currently, in Romania there are 8 UGSs constructed in
depleted gas reservoirs out of which 7 are in operation.
Romgaz owns and operates 6 UGSs having a total capacity
of 4.335 billion m3 and a working gas volume of 2.920
billion m3.
At national level, the ratio between the working gas volume and the annual consumption was
about 24% in 2017. This level is in the first upper half of 2015 international values (Great
Britain 6.4%, Spain 9.8%, Holland 40.6%, Poland 19.9%, Italy 26.2%, Germany 29.8%,
France 29.5%, Denmark 33.6%, and Hungary 69.6%).
In 2017 the ratio of stored gas volumes to the working volume of the UGS’s was 69%.
Related to the obligation of each titleholder of gas supply license to store a minimum gas
stock in the UGS’s, Romgaz stored more gas by 283%.
The UGS activity is a business segment regulated by ANRE (National Authority for Energy
Regulation) with regard to UGS operators’ licensing and the access to the UGSs, as well as
setting the tariffs related to UGS activity.
After a thorough restructuring, the natural gas sector is currently
split into independent activities. The Romanian natural gas
market includes a NTS operator (Transgaz), producers (Romgaz
and Petrom have a 97% market share), UGS operators, companies
for the distribution and supply of gas to captive customers, and
suppliers on the wholesale market.
The natural gas market in Romania consists of the competition segment, which includes gas
trading activities between suppliers and between suppliers and eligible consumers, and the
regulated segment, which includes monopoly-like activities performed in accordance with
framework contracts (transmission, underground storage, distribution and supply at a
regulated price).
In terms of supply, Romgaz held during 2010-2017 a national market share ranging between
37 and 46%:
M.U.
2010
2011
2012
2013
2014
2015
2016
2017
National consumption
traded
Romgaz
volumes (domestic +
import)
bcm
bcm
14.0
14.4
13.5
12.5
12.2
11.6
11.8
12.3
6.4
6.3
5.9
5.7
5.7
5.1
4.4
5.7
Romgaz market share
%
45.81 43.87 42.82
44.5
46.1
44.0
37.1
46.3
The above quantities include gas from own domestic production, domestic gas purchased
from third parties, 100% gas from Schlumberger joint venture and import gas. As compared
to previous years, 2017 deliveries include gas delivered to Iernut and Cojocna for electricity
production, as well as technological consumption.
Page 22 of 94
Board of Directors’ Report 2017
SIRCOSS was established in 2003 in accordance with the GSM Resolution No5/June 13,
2003.
The branch performs two types of activities:
well workover, recompletion operations and production tests;
special well operations.
All well workover, recompletion operations and production tests operations are performed by
means of rig installations.
The second activity consists of special well operations, namely services supplied by means of
different transportable equipment for downhole or surface operations.
During the past years most of services were supplied for the wells within the company’s
portfolio, yet, well workover and special well operations were also supplied to other
companies in Romania that have under concession and operate gas wells in Romania.
STTM was established in October 2003, by taking over the means of transportation from Medias,
Targu-Mures and Ploiesti branches.
The branch’s scope of activity is the transportation of goods and people, the specific
technological transportation, and the maintenance activity for the benefit of the company and
of third parties.
CTE Iernut is an important junction point in the National Power Grid located in the centre of
the country, in Mures County on the left bank of Mures River between towns Iernut and Cuci.
Gas supply, industrial water and power discharge facilities are forthcoming.
CTE Iernut is operated under Romgaz Electricity Generation Branch (SPEE).
CTE Iernut has an installed capacity of 600 MW split into 4 energy groups: two 100 MW
energy units of Czechoslovakian manufacturing and two 200 MW energy units of Soviet
manufacturing. The groups were commissioned between 1963 and 1967. As of January 1,
2016, the energy units 2 and 3 were put into a dry storage condition.
Cojocna Project is an outcome of the pressing need of finding ways to experimentally
produce from a series of wells resulted from exploratory drilling, in order to determine, as
detailed as possible, the production potential of the respective area. The wells were located far
from each other and also from the National Transmission System (NTS).
Thus, during 2009-2010 solutions were sought, feasibility and opportunity studies were
prepared, and further to their approval it was decided to use the gas from wells 2 and 4
Cojocna as fuel gas for two 1.5 MW power generation units, bearing in mind that the
connection to the National Energy System (NES) didn’t raise any major issue.
This power generation pilot project using units that do not require special installations works
is an alternate option for gas production and valorisation from isolated wells that would imply
building kilometre long gathering pipes, thus, representing a not justifiable option due to the
high costs and multiple impediments related to access on outside build-over areas belonging
to legal or individual persons.
Commissioning the two electricity production units using the gas from wells 2 and 4 Cojocna
was a technological success but unfortunately a short termed one, because of reduced gas
flows that led to intermittent operation of wells and units.
Page 23 of 94
Board of Directors’ Report 2017
Our specialists focused during year 2015 both on productivity stimulation from both wells (re-
perforation of productive layers, addition of new pay zones) and on setting the best layout of
gathering pipes where other isolated wells may deliver, ensuring thereby the necessary gas
volumes for both units.
Further to approving a feasibility study, it has been decided to implement the scenario on
building a pipeline network to collect gas from the neighbouring wells and transmission of
gas to the two power generation units (in progress).
In 2016, the documentation prepared in accordance with Law No 50 as of June 29, 1991
regarding authorization of construction work performance was filed at the Cluj County
Council, regarding the work: „Pipelines and Technological Installations related to Putting
wells 1 Palatca, 1 Vaida and 2 Vaida on Experimental Production”.
Starting with the 4th Quarter of 2017, the electrical equipment is fuelled by the above
mentioned wells.
The natural gas distribution is a regulated business segment and the company’s activity is
currently limited to Ghercesti and Piscu Stejari areas. Romgaz has concession agreements
with the Ministry of Economy for Ghercesti area and with Piscu Stejari Town Hall for Piscu
Stejari distribution. The activity is carried out by Targu-Mures Branch.
Societatea Nationala de Gaze Naturale “ROMGAZ” SA is
Romania’s most important natural gas producer and
supplier. The company’s experience in the field of gas
exploration and production exceeds 100 years. Its history
began in 1909 when the first natural gas commercial
reservoir was discovered in the Transylvanian Basin upon
the drilling of well Sarmasel-2.
The most important historic benchmarks are:
Page 24 of 94
Board of Directors’ Report 2017
•Natural gas discovery in Sarmasel (Transylvanian Basin)
•First gas production recorded in Romania (113,000 m3)
•Establishment of the National Gas Company "SONAMETAN"
•First UGS in Romania constructed in Ilimbav, Sibiu County
•Use of compressors in the course of production
•Maximum gas production obtained by Romgaz (29,834 million m3)
•The natural gas import from the Russian Federation begins
•Centrala Gazului Metan was reorganized to Regia Autonoma "ROMGAZ" RA
•"ROMGAZ" RA became Societatea Nationala de Gaze Naturale "ROMGAZ" SA
•SNGN "ROMGAZ" SA was reorganized into five independent companies (SC
"Exprogaz" SA Medias, SNDSGN "Depogaz" SA Ploiesti, SNTGN "Transgaz" SA
Medias, SC "Distrigaz Sud" SA Bucuresti SC "Distrigaz Nord" SA Tirgu-Mures)
• The current SNGN "ROMGAZ" SA Medias was established
1909
1913
1925
1958
1972
1976
1979
1991
1998
2000
2001
Unbundling of underground gas storage activity
In compliance with European and national applicable laws, Romgaz has to legally unbundle
the gas storage activity from gas production and supply activities.
Further to adopting Directive 2009/73/EC of the European Parliament and Council on July 13,
2009 concerning common rules of the internal market in natural gas and repealing Directive
2003/55/EC, the Romanian Parliament adopted the Energy and Gas Law No 123/2012. This
was published in the Official Gazette of Romania No 485 on July 16, 2012 and became
effective on July 20, 2012.
Page 25 of 94
Board of Directors’ Report 2017
According to the provisions of article 141, paragraph 1 of the Law (which transcribes article
15, paragraph 1 of the Directive) a storage operator under a vertically integrated economic
operator must be independent from other activities not related to transmission, distribution
and underground storage activities at least from legal, organizational and decision-making
perspective.
Therefore, considering the above mentioned matters, it is compulsory to legally separate the
gas storage activity from the gas production and supply activities performed by Romgaz by
establishing a separate company to act as independent storage operator.
Both the Directive and the Law recommend as solution to set up an independent subsidiary
that should act as storage operator, as follows:
Article 15 paragraph 2 let. c) of the Directive provides that: “the storage system
operator shall have effective decision making rights, independent from the integrated
natural gas undertaking, with respect to assets necessary to operate, maintain or
develop the storage facilities. This shall not preclude the existence of appropriate
coordination mechanisms to ensure the economic and management supervision rights
of the parent company in respect of return on assets in a subsidiary are protected
[…]”
Article 141 paragraph 3 let. c) of the Law also provides that: “the storage system
operator shall have effective decision making rights, independent from the parent
company, with respect to assets necessary to operate, maintain or develop the storage
facilities;
the existence of appropriate coordination
mechanisms to ensure the economic and management supervision rights of the parent
company in respect of return on assets owned by a subsidiary are protected”.
this shall not preclude
For fulfilling the legal requirements set by the Directive and by Law, respectively, the
following steps have been taken:
a study has been prepared to identify the best version for performing the legal
unbundling of the storage activity from the gas production and supply activity. The
solution recommended by Ernst&Young was to create an independent subsidiary,
owned 100% by Romgaz to perform gas storage activities;
the Board of Directors, endorsed in Resolution No 22/30.10.2014 at article 10 the
incorporation, registration an declaration to the Trade Office Register by Prahova
Court the subsidiary “SNGN Romgaz SA – Filiala de Inmagazinare Gaze Naturale
“Depogaz” Ploiesti S.R.L.”;
the Extraordinary General Meeting of Shareholders approved by Resolution No
10/19.12.2014 (item II) to set up the subsidiary “SNGN Romgaz SA – Filiala de
Inmagazinare Gaze Naturale “Depogaz” Ploiesti S.R.L.”;
On March 17, 2015, the General Meeting of Shareholders approved the Article of
Incorporation of the subsidiary;
A consultancy agreement on “Assistance in performing the legal unbundling of
UGS activity in accordance with applicable law (Law No 123/2012 on Energy and
natural gas and European Directive 2009/73/EC)” has been concluded and the
Page 26 of 94
Board of Directors’ Report 2017
Final Report prepared by the consultancy agency (K.P.M.G.) was submitted to the
National Authority for Energy Regulation;
The Company has submitted a request to the National Agency for Fiscal
Administration for an advanced tax ruling (SFIA – Solutie Fiscala Individuala
Anticipata);
During the Board of Directors Meeting on August 13, 2015 the fixed assets lease
Agreement to be concluded between SNGN Romgaz SA and subsidiary has been
endorsed.
The following agreements have been concluded between the company and
subsidiary:
a) The Agreement No 9523 as of September 22, 2015 regarding the lease of
fixed assets
b) The Agreement No 9525 as of September 22, 2015 regarding services
related to gas compression and gas dehydration and services related to
maintenance of the underground gas storage system;
ANRM issued the Attestation Certificate No 1691 as of October 1st, 2015
certifying that the subsidiary meets the Attestation Procedure requirements and
agreed that the subsidiary (operator) may perform the petroleum operations in the
blocks where the UGS are located;
By Resolution No 2588 as of December 30, 2015, ANRE amends the Licence No
1942/2014 on operation of UGS system by changing the owner from SNGN
ROMGAZ SA Medias into SC SNGN ROMGAZ SA- Filiala de Inmagazinare
Gaze Naturale “Depogaz” Ploiesti S.R.L, and shall be valid as of April 1st, 2016;
the executive management will urgently initiate the procedure for selecting the
subsidiary’s administrators. This procedure must comply with the independence
criterion stipulated in Directive 2009/73/EC and implemented in Electricity and
Natural Gas Law No 123/2012, as amended and supplemented, and will consult
the competent institutions/authorities so that the new company obtains the
endorsements/approvals necessary for performing the activities included in the
main activity.
By Decision No 446 as of March 23, 2016, ANRE postponed until April 1, 2017
the entering into force of the Decision No 2588 as of December 30, 2015 on
modifying the License No 1942/2014 on operating the UGS system, in terms of
changing the titleholder of such, namely from SNGN ROMGAZ S.A Mediaș to
SC SNGN ROMGAZ S.A. - Filiala de Inmagazinare Subterana a Gazelor Naturale
DEPOGAZ Ploiesti SRL;
the National Agency for Fiscal Administration issued the final advanced tax ruling
A-RFC 1527/September 05, 2016 as regards profit tax and applicable VAT, for the
operations described by Romgaz, with the purpose of separating the UGS activity
from the production activity and the supply activity.
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Board of Directors’ Report 2017
By Decision No 474 of March 30, 2017, ANRE postponed until April 1st, 2018 the
entering into force of the Decision No 2588 of December 30, 2015 on modifying
the License No 1942/2014 on operating the UGS system, in terms of changing the
titleholder of such, namely from SNGN ROMGAZ S.A Mediaș to SC SNGN
ROMGAZ S.A. - Filiala de Inmagazinare Subterana a Gazelor Naturale
DEPOGAZ Ploiesti SRL;
By Resolution No 01/19.04.2017 of SNGN ROMGAZ S.A Mediaş, acting as the
Sole Owner, the activity of SC SNGN ROMGAZ S.A. - Filiala de Înmagazinare
Subterană a Gazelor Naturale DEPOGAZ Ploieşti SRL has been suspended until
April 1st, 2018.
A series of changes to the organizational structure have been performed during 2017:
By Decision No 59 of the Director General as of February 14, 2017 on modifying the
organizational structure of SNGN ROMGAZ S.A., the GMS and BD Secretary Office
was eliminated from the Corporate Governance Department and the GMS and BD
Secretary Department was created under the direct subordination of the Director
General.
By Decision No 131 of the Director General as of July 6, 2017 on modifying the
organizational structure of Ploieşti branch the position of chief engineer was created.
By Decisions of the Director General No 262/26.07.2017 – Romgaz Headquarters, No
264/26.07.2017 –Mediaș Branch, No 266/26.07.2017 –Târgu Mureș Branch, No
268/26.07.2017 –Ploiești Branch, No 270/26.07.2017 – SIRCOSS Mediaș, No
272/26.07.207 – STTM Târgu Mureș, No 274/26.07.2017 – SPEE Iernut the legal
requirements provided under the law on sectoral public acquisition have been
implemented.
By Decision No 306/05.09.2017 on modifying the organizational structure of SPEE
Iernut the Investment Department was created, in charge to carry on the project on
development and modernization of the thermal power plant under implementation;
By Decision of the Director General No 371/30.10.2017 on modifying the
organizational structure of Târgu Mureș Branch a new production workshop was
established, namely Caragele Production Workshop in charge with the management
and operation of Caragele gas field;
By Resolution No 30/02.11.2017 of the Board of Directors on modifying the
organizational structure of the company headquarters by turning the GMS and BD
Secretary Department into Office.
No mergers of the company took place in financial year 2017.
Page 28 of 94
Board of Directors’ Report 2017
The Company’s revenues are generated mainly from gas production and delivery (own gas
production and delivery, gas produced by joint ventures, import gas deliveries and gas
deliveries from other domestic producers), from supply of underground gas storage services,
from production and supply of electric energy and from other specific services.
Description
2016
2017
Item
No
0
1
2
3
1
Total Income, out of which:
*operating income
*financial income
Revenue
Expenses, out of which:
*operating expenses
*financial expenses
4 Gross Profit
5
6
Income Tax
Net Profit
2
3,816,770
3,794,123
22,647
3,411,868
2,536,075
2,516,978
19,097
1,280,695
256,116
1,024,579
3
4,786,046
4,762,914
23,132
4,585,189
2,604,855
2,584,314
20,541
2,181,191
326,443
1,854,748
* RON thousand *
Ratio
(2017/2016)
4=3/2x100
125.40%
125.53%
102.14%
134.39%
102.71%
102.68%
107.56%
170.31%
127.46%
181.03%
The Total Income was higher than the 2016 income by 25.4%.
Below are the compared economic-financial indicators for 2016 and 2017 and their detailed
structure split by activity:
Compared economic-financial indicators
Description
2016
2017
* RON thousand *
Indices
(2017/2016)
1
Revenue
Cost of commodities sold
Investment Income
Other gains and losses
Changes in inventories
Raw materials and
consumables
Depreciation, amortization
and impairment
Employee benefit expense
Finance cost
Exploration Expenses
Other Expenses
Other Income
2
3
4=3/2x100
3,411,868
(49,878)
22,117
(468,218)
20,963
4,585,189
(61,095)
22,349
(120,335)
(186,651)
(54,632)
(64,329)
(311,012)
(498,114)
(18,275)
(253,348)
(881,923)
361,147
(548,869)
(562,883)
(18,624)
(137,083)
(1,090,647)
364,169
34.39%
22.49%
1.05%
-74.3%
n/a
17.75%
76.48%
13.00%
1.91%
-45.89%
23.67%
0.84%
Page 29 of 94
Board of Directors’ Report 2017
Profit before tax
Income tax expense
Profit for the year
Structure of indicators split by activity-2016
Description
TOTAL
2016,
1
Revenue
including:
2
3,411,868
Gas
production
and
deliveries
3
2,857,683
1,280,695
(256,116)
1,024,579
2,181,191
(326,443)
1,854,748
70.31%
27.46%
81.03%
Undergroun
d Gas
Storage
Electrici
ty
* RON thousand *
Settlemen
Other
t between
activities
segments
4
358,568
5
399,042
6
7
239,230
(442,655)
Cost of commodities sold
(49,878)
(18,443)
(432)
(30,229)
Investment Income
Other gains and losses
Changes in inventories
22,117
844
(468,218)
(445,340)
20,963
2,765
3,949
(1,915)
13,522
(774)
17,284
40
(445)
(20,518)
233
4,443
(54,632)
(37,389)
(7,142)
(1,460)
(10,660)
2,019
Raw materials and
consumables
Depreciation,
amortization and
impairment
Employee benefit
expense
Finance cost
(311,012)
(185,959)
(95,784)
(6,940)
(22,329)
(498,114)
(313,449)
(47,163)
(30,028)
(107,474)
Exploration Expenses
(253,348)
(253,348)
-
(18,275)
(16,674)
(1,601)
-
-
-
-
Other Expenses
Other Income
Profit before tax
Income tax expense
Profit for the year
(881,923)
(915,298)
(91,057)
(256,113)
(61,076)
441,621
361,147
356,420
2,223
122
1,280,695
1,031,812
133,168
74,222
3,367
41,493
(256,116)
-
-
-
(256,116)
1,024,579
1,031,812
133,168
74,222
(214,623)
(985)
-
-
-
Description
Structure of indicators split by activity-2017
Gas
production
and
deliveries
3
2017,
including:
TOTAL
2
1
Revenue
4,585,189
3,760,366
* RON thousand *
Underground
gas
storage
Electrici
ty
Other
activities
Settlement
between
segments
4
566,246
5
6
7
545,317
264,544
(551,284)
Cost of commodities sold
(61,095)
(50,038)
(7)
(10,313)
(737)
Investment income
22,349
321
1,487
26
20,515
Other gains and losses
(120,335)
(82,564)
(3,271)
(1,672)
(32,828)
(186,651)
(117,084)
(72,025)
124
2,334
(64,329)
(46,681)
(9,695)
(1,167)
(10,369)
3,583
(548,869)
(420,252)
(103,818)
(6,560)
(18,239)
(562,883)
(357,407)
(54,821)
(33,432)
(117,223)
Finance cost
(18,624)
(16,848)
(1,776)
Exploration expense
(137,083)
(137,083)
-
-
-
-
-
Other expenses
Other income
Profit before tax
(1,090,647)
(1,108,629)
(75,003)
(389,388)
(66,063)
548,436
364,169
362,945
198
39
1,722
(735)
2,181,191
1,787,046
247,515
102,974
43,656
-
Page 30 of 94
Changes in inventories
Raw materials and
consumables
Depreciation, amortization
and impairment
Employee benefit expense
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Board of Directors’ Report 2017
Income tax expense
Profit for the year
(326,443)
-
-
-
(326,443)
1,854,748
1,787,046
247,515
102,974
(282,787)
-
-
The table below compares the 2017 revenue with the 2016 revenue, for each activity (RON
thousand):
Description
1
Revenue, including:
gas production and deliveries activity, including:
* sale of own domestic gas – third parties
* sale of own domestic gas-settlements between branches
* sale of own domestic gas produced by joint ventures
* sale of import gas
* sale of domestic gas from acquisitions
* distribution services
* other revenues from production- third parties
underground gas storage activity-total, including:
* third parties
* settlements between branches
Electricity generation – total, including:
* third parties
* settlements between branches
Other activities – total, including:
* third parties
* settlements between branches
settlements between branches – total
2016
2017
Ratios
2
3
3,411,868
4,585,189
2,857,683
3,760,366
2,558,848
3,383,231
136,481
108,323
10,885
9,332
384
33,430
358,568
346,141
12,427
399,042
336,430
62,612
155,403
128,831
29,280
22,020
369
41,232
566,246
505,815
60,431
545,317
464,176
81,141
239,230
264,544
8,095
10,235
231,135
(442,655)
254,309
(551,284)
(2017/2016)
4=3/2x100
134.39%
131.59%
132.22%
113.86%
118.93%
268.99%
235.96%
96.09%
123.34%
157.92%
146.13%
486.29%
136.66%
137.97%
129.59%
110.58%
126.44%
110.03%
124.54%
The table below shows the revenue weight in different business segments:
Description
2015
2016
2017
and delivery
Gas production
activity
UGS activity
Electricity generation and delivery
activity
Other activities
Settlement between branches
TOTAL Revenue
RON
mil
3,511.4
332.6
443.2
254.7
-489.2
4,052.7
% R
86.64
8.21
10.94
RON
mil
2,857.7
358.6
399.0
% R
83.76
10.51
11.69
RON
mil
3,760.4
566.2
545.3
% R
82.01
12.35
11.89
6.28
-12.07
100.00
239.2
-442.7
3,411.9
7.01
-12.98
100.00
264.5
-551.3
4,585.2
5.77
-12.02
100.00
Page 31 of 94
Board of Directors’ Report 2017
The financial income is higher by 2.14% than the one recorded in the previous year. Financial
income consists mainly of interests on bank deposits and of interest on state bonds.
Description
Year 2016
Year 2017
Ratio
(RON thousand)
2
(RON thousand)
3
2,516,978
19,097
2,536,075
2,584,314
20,541
2,604,855
(2017/2016)
4=3/2x100
102.68%
107.56%
102.71%
1
Operating expenses
Financial expenses
Total expenses
Financial Expenses
Financial expenses during 2017 are higher by 7.56% as compared to the previous year due to
the negative differences of the exchange rate.
Chapter 7 shows more details on the different categories and a comparative assessment
thereof.
Compared financial results are shown in the table below (RON thousand):
Description
2016
2017
1
Operating results
Financial results
Gross result
Income tax
Net Result
2
1,277,145
3,550
1,280,695
(256,116)
1,024,579
Ratio
(2017/2016)
4=3/2x100
170.58%
3
2,178,600
2,591
72.99%
2,181,191
(326,443)
1,854,748
170.31%
127.46%
181.03%
Gross result during January – December 2017 in amount of RON 2,181,191 thousand is
higher than the gross result of the similar period of 2016 by 70.31%.
The 2017 financial result is below the 2016 one, due to the higher increase in financial
expenses than the increase in financial income.
of the company is also emphasized by the evolution of indicators
presented in the table below:
Indicators
1
Working capital (WC)
Working capital requirements (WCR)
Net cash
Economic Rate of Return (ERR)
Return on Equity
Pg/Cltx100
Pn/Ex100
M.U.
2016
2017
Calculation
Formula
2
Clt-Af =
E+Lnc+Pr+Si-Af
(Ast-L+Pp) -
(Lcrt-Crst+Idf)
WC-WCR = L-Crst
3
RON
mil
RON
mil
Ron
thousand
%
%
4
3,772
5
3,384
3,492
3,157
281
227
12.77
10.59
22.46
19.92
Page 32 of 94
Board of Directors’ Report 2017
Return on Sales
Return on Assets
EBIT
EBITDA
ROCE
Asset Solvency
where:
Pg/Rx100
Pn/Ax100
Pg+Exi-Ir
EBIT+Am
EBIT/Cempx100
E/Lx100
%
%
RON
thousand
RON
thousand
%
%
37.54
9.33
1,259
47.57
17.09
2,159
1,570
2,708
12.55
88.15
22.23
85.80
Clt
Af
E
Lnc
Pr
Si
Ast
L
Pp
Lcrt
Crst
long-term capital;
non-current assets;
equity;
non-current liabilities;
provisions;
investment subsidies;
short term assets;
liquidity position;
Prepayments;
current liabilities;
short-term credit;
Idf
Pg
Pn
R
A
Exi
Ir
Am
Cemp
Acrt
L
deferred income
gross profit;
net profit;
revenue;
total assets;
interest expense;
interest income
amortization and impairment;
capital employed (total assets–current liabilities);
current assets
total liabilities
The regulatory framework for natural gas production, transmission, distribution, supply and
storage, organization and operation of the gas sector, market access as well as criteria and
procedures for granting authorizations and/or licenses in the natural gas sector are set by Law
No 123/2012, which provides in Chapter XII “Prices and Tariffs”, Article 179 for the
following:
activities in the regulated market comprise the following:
o supply of natural gas to non-household customers at regulated price and under
frame contracts until December 31, 2014. On January 1, 2015 regulated prices for
non-household customers were eliminated.
o supply of natural gas to household customers at regulated price and under frame
contracts until June 30, 2021. To ensure non-discrimination between customer
categories until the end of the regulated period, the household consumers and the
thermal energy producers receive the same treatment in terms of security of supply
and sale price of consumed gas, exclusively for the gas quantities used for
producing thermal energy in cogeneration plants and thermal power plants
intended for household consumption, irrespective of their option to be eligible or
regulated customers ;
o supply of last resort of natural gas;
o natural gas transmission;
o natural gas transmission through upstream supply pipelines, in accordance with the
provisions of license validity conditions;
o underground gas storage;
Page 33 of 94
Board of Directors’ Report 2017
o natural gas storage in pipelines;
o natural gas, bio-gas and bio-methane distribution;
o related activities performed by licensed operators;
o activities related to LNG terminal operation;
prices and tariffs on the regulated market are set by ANRE, based on methodologies
approved and published by the authority after informing and consulting all parties
concerned;
the calendar for gradual deregulation of prices for the final customers is set by the
Government in compliance with the schedule of producer price progress proposed by
ANRE and ANRM, taking into account possible adverse effects of price deregulation, in
order to mitigate the consequences for customers;
ANRE will annually monitor the results of the gradual price deregulation calendar and, as
the case may be, submit to the Government the proposal to trade domestic gas production
on the domestic market until fulfilment of the approved calendar, i.e. June 30, 2021.
Romgaz operates both on the regulated market, performing underground gas storage and
distribution activities, and the free market, performing gas production and supply activities.
Underground Gas Storage (UGS)
The revenues from the underground storage business and the storage tariffs are regulated
since April 1, 2004, by ANRGN Decision No. 1078/2003, abrogated by ANRE Order No. 22
of May 25, 2012 on approval of the Methodology for approving prices and setting regulated
tariffs in the gas sector, published in the Official Gazette of Romania No. 379 of June 6, 2012.
ANRE Order No. 26 of April 26, 2013 approved the regulated revenue for the first year of the
third regulatory period (April 2012 – March 2013), the regulated revenue for the second year
of the regulatory period (April 2013 – March 2014) and the regulated tariffs for the period
April 2013 – March 2014.
ANRE Order No. 29 of April 9, 2014 approved the regulated revenue for the third year of the
regulatory period (April 2014 – March 2015) and the regulated tariffs for the period April
2014 – March 2015.
ANRE Order No. 58 of March 27, 2015 approved the regulated revenue for the fourth year of
the regulatory period (April 2015 – March 2016) and the regulated tariffs for the period April
2015 – March 2016.
Order No.9 of March 23, 2016 extended the application of Order No. 58/2015 ”until the end
of the underground natural gas storage cycle 2016 - 2017” and Order No. 19/2017 ”until the
end of the underground natural gas storage cycle 2017 – 2018”.
Therefore, the storage tariffs applied between January 2014 – December 2017 are as follows:
Page 34 of 94
Board of Directors’ Report 2017
1) Tariffs approved by Order No. 26/2013 are as follows:
Tariff Component
Volumetric component for gas
injection
Fixed component for capacity
reservation
Volumetric component for gas
withdrawal
M.U.
RON/MWh
RON/MWh/full storage
cycle
RON/MWh
2) Tariffs approved by Order 29/2014 are as follows:
Tariff Component
Volumetric component for gas
injection
Fixed component for capacity
reservation
Volumetric component for gas
withdrawal
M.U.
RON/MWh
RON/MWh/full storage
cycle
RON/MWh
Value
2.37
13.12
1.80
Value
2.53
13.14
1.80
3) Tariffs approved by Order 58/2015, extended by Order No. 9/2016, respectively Order No.
19/2017, applicable until March 2018:
Tariff Component
Volumetric component for gas
injection
Fixed component for capacity
reservation
Volumetric component for gas
withdrawal
Natural Gas Supply
M.U.
RON/MWh
RON/MWh/full storage
cycle
Value
2.37
13.68
RON/MWh
1.87
The final gas price for the customer is the sum of the weighted average gas acquisition price,
the tariffs of transmission, storage and distribution, and the trading component, according to
the following formula:
Final price = Weighted average price of gas acquisition + Transmission tariff + Storage
tariff + Distribution tariff + Trading component
The distribution tariffs depend on the distribution area and on the distribution system
operator. Regulated prices and tariffs are calculated by the “revenue-cap” method for
underground storage and gas transmission and by the “price-cap” method for regulated
distribution and supply.
According to the provisions of Article 181, paragraph (5) of Law No. 123/2012, the domestic
gas acquisition price on the regulated market is set by Government Decision, at the proposal
of the competent ministry, and is updated by ANRE and ANRM, in accordance with the
provisions of the Calendar for gradual deregulation of prices for the final customers.
The Romanian authorities agreed with the international financial bodies a calendar for gradual
deregulation of prices until December 31, 2014 for the final non-household customers (except
when on such date there is a significant difference between the trading price of domestic
production and the European import price that may jeopardize the market stability, then the
term would be extended until December 31, 2015); for household customers the term of
Page 35 of 94
Board of Directors’ Report 2017
completion of the above mentioned process is December 31, 2018. The Romanian
Government signed with IMF, the World Bank and the European Commission a
“Memorandum on the Calendar for Gradual Deregulation of Gas Prices”. This calendar for
price increase until the end of 2014 was approved by Government Decision No.22 of January
22, 2013 on setting the acquisition price of gas from domestic production on the regulated
gas market.
At the same time, according to Article 124, paragraph (1), letter e) of Law 123/2012, the gas
producer has to make available gas quantities from their own production to suppliers, with
precedence, to cover the regulated market, in accordance with the ANRE regulations on
compliance with the price deregulation calendar, and to secure gas supply to the captive
consumers, while suppliers have to keep the destination of such gas quantities. The remaining
domestic production, less the gas quantity necessary for technological consumption, shall be
made available to the competitive market.
Domestic gas production allocated to final customers on the regulated market comprises
current gas production and a part of stored gas.
The table below shows the gas supply average prices in the period 2015-2017:
Description
1
Average supply price for internal gas
production4
Average price for import gas
M.U.
2
RON/1000 m3
RON/MWh
RON/1000 m3
2015
3
717.80
68.27
2016
4
698.30
66.36
1,928.72
1,597.47
RON/MWh
184.06
105.74
2017
5
695.74
66.33
898.27
83.81
Natural Gas Distribution
Distribution tariffs and final regulated prices valid during the period analysed have been
approved by ANRE Orders, as follows:
ANRE Order No.120/2014 on setting regulated tariffs for gas distribution services and
approval of prices for regulated gas supply performed by Societatea Natională de Gaze
Naturale "ROMGAZ" - S.A. Medias (for the period December 1, 2014 – June 30,
2015);
ANRE Order No. 57/2015 on modification of ANRE Order no. 120/2014 on setting
regulated tariffs for gas distribution services and approval of prices for regulated gas
supply performed by Societatea Natională de Gaze Naturale "ROMGAZ" - S.A.
Medias, (as of July 1, 2015);
ANRE Order No. 58/2016 on setting regulated tariffs for gas distribution service and
approval of prices for regulated gas supply performed by Societatea Nationala de Gaze
Naturale "ROMGAZ" - S.A. Medias (as of October 1, 2016).
ANRE Order No. 89/2017 on setting the regulated tariffs for gas distribution services
and approval of prices for regulated gas supply performed by Societatea Naţională de
Gaze Naturale "ROMGAZ" - S.A. Medias (as of October 1, 2017).
The applied tariffs and prices are presented in the table below:
Description
December
1, 2014 –
June 30,
2015
July 1,
2015-
Septembe
r 30, 2016
October 1,
2016-
Septembe
r 30, 2017
October 1,
2017-
present
4 Including gas commodity and gas from association with Schlumberger and without storage services costs
Page 36 of 94
Board of Directors’ Report 2017
Distribution tariffs (RON/MWh):
*B1 consumption up to 23.25 MWh
*B1 annual consumption between 23.26 and 116.28
MWh
*B1 annual consumption between 116.29 and 1,116.78
MWh
*B1 annual consumption between 1,116.79 and
11,627.78 MWh
Final regulated prices (RON/MWH):
*B1 consumption up to 23.25 MWh
*B1 annual consumption between 23.26 and 116.28
MWh
44.01
40.06
44.01
40.06
44.01
52.48
47.71
46.81
52.70
47.91
47.01
40.06
45.77
46.21
120.67
116.03
117.75
113.13
123.27
118.49
119.10
114.31
On December 31, 2017 the company had 6,198 employees.
The evolution of the company’s number of employees between January 1, 2015 – December
31, 2017 is shown in the table below:
Description
1
Employees at the beginning of the year
Newly hired employees
Employees who terminated their labour relationship with the
company
2015
2
6,344
159
147
2016
3
6,356
168
278
2017
4
6,246
233
281
Employees at the end of the year
6,356
6,246
6,198
The structure of employees at the end of 2017 was the following:
a) by level of education
University
Secondary education
Foreman education
Vocational school
Middle school
b) by age
under 30 years
30-40 years
40-50 years
50-60 years
over 60 years
c) by activities
gas production
production tests/well special operations
health
transportation
gas storage
electricity production
23.81 %
27.35 %
3.45 %
33.77 %
11.62 %
4.23 %
15.38 %
37.92 %
33.70 %
8.78 %
62.86 %
11.52 %
1.24 %
8.79 %
8.47 %
7.12 %.
Page 37 of 94
Board of Directors’ Report 2017
Distribution of Romgaz employees by headquarters and by branches is shown in the figure
below:
STTM
9%
SIRCOSS
11%
Iernut Branch
7%
Headquarters
7%
Medias Branch
31%
Ploiesti Branch
8%
Targu Mures
Branch
27%
The structure of the company’s employees from the headquarters and from branches is shown
in the table below:
Entity
Workers
Foremen
1
Headquarters
Mediaş Branch
Targu-Mures Branch
Ploiesti Branch
SIRCOSS
STTM
Iernut Branch
TOTAL
2
3
31
1,479
1,319
336
512
418
293
88
52
32
52
18
41
Admin
Employees
4
387
340
277
157
150
109
107
Total
5
418
1,907
1,648
525
714
545
441
4,388
283
1,527
6,198
The main areas of training during 2017 were the increase of competitiveness and professional
performance by improving the professional training.
Thus, the following were taken into account:
training of administrative employees in various areas of activity, in cooperation with
training suppliers from the country and abroad;
authorization/re-authorization, according to specialization and work;
skills improvement and vocational training of workers through internal training
courses.
A number of 2024 employees were trained during 2017 and the costs of such professional
training and skills improvement training courses were of RON 1,357,409.
The annual training program was implemented as follows:
Page 38 of 94
Board of Directors’ Report 2017
782 persons participated in professional training programs with professional subjects
applicable to their activity;
807 persons participated in training courses to obtain authorization/re-authorization in
accordance with their specialization and work place;
373 persons participated in internal training courses;
62 persons participated in qualification courses at work place.
During 2017, the professional training activity focused mainly on sustaining the increase of
adaptability to new economy requirements based on knowledge, in order to ensure and update
the required competencies for employees working in the technical, economic and research-
development field, such as:
For the purpose of a more efficient use of the seismic data, which is important to elaborate
production rehabilitation projects and resources and reserves evaluation studies , a training
program was carried out for 14 geologists;
Certification of technical competencies for oil and gas drilling for 3 persons, experts and
professionals, who attended IWCF certification courses at U.P.G. Ploiesti;
Implementation of the International Financial Reporting Standards required training and
skills improvement of employees in the economic and financial field. Therefore, 31
employees participates in such training courses in 2017;
To comply with the legislation in force and to offer the employees practical information
related to applicable legislation in this field, 16 employees participated in a course with
the theme “VAT Split Payment approached from a practical perspective”;
Romgaz is involved in 2 projects with a grant from the European Union, as follows:
development of underground gas storage and research and development of a new
compatible software frame 5G, specially adapted to the energy field. Thus, to increase the
chance of success in obtaining the funds, 19 employees participated in training courses
according to Romgaz requirements, to elaborate the application “project management and
financial reporting”;
To implement “the Development Project of CTE Iernut by the construction of a new
combined cycle power plant with gas turbines”, the implementation team of this project,
namely 18 employees, participated in a course in the field of “energy projects
management”;
The major legislation changes in the field of sectorial procurement required a training
course for the employees that coordinate the sectorial procurement activity of the
company. Thus, 21 employees participated in a course that included mainly a practical
component in order to practice the direct use of SEAP competencies;
For the employees with no economy studies, but who by their activity have
responsibilities which imply a minimum level of knowledge in the economic field, a
program was carried out presenting the basic principles and the current terms used in the
financial reporting;
For the purpose of developing, reorganization and consolidation of the company, 8
persons with top management positions participated in a program carried out in 4 course
modules, thus acquiring the necessary professional instruments and methods to control the
objectives, activities and actions of the subordinated employees;
In the field of human resources, the heads of the human resources offices, but also
employees within these offices, participated in distinct training programs to develop the
Page 39 of 94
Board of Directors’ Report 2017
competencies in the human resources administration, the performance management, the
human resources analysis, the personnel recruiting and selection;
To comply with the legislation in the field of occupational safety and health and to obtain
the necessary information to exercise the position as a member in the OSHC, a training
program was carried out where the members of the occupational safety and health
committees participated in;
As a consequence of the legislative changes on the waste regime and the several
obligations which Romgaz must comply with, 37 employees participated in a training
program in the field of waste management, including hazardous waste.
Within Romgaz there are two trade unions, as follows:
“Sindicatul Liber din cadrul S.N.G.N. Romgaz S.A.”, consisting of 6158 members;
“Sindicatul Extracţie Gaze şi Servicii”, consisting of 16 members.
Thus, the total number of union members is 6174 as compared to 6198 representing the total
number of employees. The union members/total number of employees ratio is 99.61%.
Relationship between manager and employees: following negotiations, the parties have
agreed to conclude a Collective Labour Agreement, valid for 2017 and 2018.
During 2017, there were three conflicts between the management and the trade union, out
of which two were in progress on December 31, 2017 (see Annex 2 – Litigations: Items 70
and 84) and one was completed during 2017.
In 2017, the environment protection activity continued to focus on compliance of Romgaz
activities with the applicable legal requirements on environment protection. Another aim was
meeting specific objectives related to:
Increase of awareness regarding compliance with legal requirements;
Pursuing the accomplishment of all reports imposed by the environment legislation in
force, by centralizing the information required and reported by Romgaz Branches and
submitted to public authorities;
Rendering efficiency to environment protection, a support for Romgaz management
process.
The environment protection activities during 2017 focused on:
Fulfilling the requirements deriving from the ISO: 14001 and ISO: 9001 standards;
Complying with permitting requirements:
Complying with legal requirements relating to environment permits for all 141
units. In this respect, the conformity degree is 100%.Thus, for four units the
company has required and obtained the review of the permits, for one unit
reauthorisation was requested and obtained, and one new unit was given permit,
that is “Gas compression and dehydration installation afferent to Sarmasel
underground gas storage”. Considering that for one unit the regulation document
set a conformity plan – measures to reduce the current and future effects of the
activity, the company pursued to accomplishment the completion of a well with
safety equipment (packer and TRSV safety valve). The completion date of the
Page 40 of 94
Board of Directors’ Report 2017
investment was December 31, 2017, self-financed, the conformity inspection was
carried out by the Environmental Guard – Mures County Commissoner’s Office
and by Mures Environmental Protection Agency;
Complying with legal requirements regarding waste water management permits,
for:
83 units, for which the conformity degree is 100% - to be noted that for 11
units re-authorization permits are in process of being obtaining, for 24 units
the re-authorization permits were obtained, and for 1 unit a new
authorisation permit was obtained, that is “Reinforced concrete bridge over
Moldova River, in Frasin, Suceava County”;
39 units related to reservoir water systems/injection wells, out of which 2
are in process of obtaining the re-authorization, 10 units were reauthorized,
and for 1 new unit the authorization documentation was submitted, that is
for “Well 283 Roman for reservoir water injection, Roman Section, Neamt
County”.
A company-wide application has been developed to monitor environment permits, and to
permanently analyse and continuously supervise compliance with legal requirements in
the field of environment protection;
Disposal of waste generated from own activity, according to the legal requirements in
force. In 2017, the company’s activity generated 5,312.422 tons of waste, out of which
979.574 tons were recycled and co-incinerated (975.207 tons were recycled and 4.367
tons were co-incinerated), 42.623 tons of waste were disposed by incineration and
4,290.225 tons of waste were disposed by storage.
2017 AMOUNT OF GENERATED WASTE (5,312.4 tons)
43
980
4 290
Quantity disposed by incineration
Quantity recycled and co-
incinerated
Quantity disposed by storage
100%
50%
0%
In 2017, the “Program for Prevention and Reduction of Waste Generated by S.N.G.N.
Romagaz S.A.” pursued the accomplishment of the measures thereunder. This program
approaches the measures and methods of prevention and reduction of waste quantities
resulting from the company’s activity, in accordance with the applicable regulations and a
preferential hierarchy of waste management. The Program aims at identifying the objectives,
targets and policy actions the company is required to comply with in its waste management
activity in order to fulfil the company’s strategic objectives.
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Board of Directors’ Report 2017
Romgaz Waste Flow
Measures and methods were identified in the assessments on waste quantity reduction and
in the references of the internal audit relating to waste. The priority of waste management
relates to reduction of waste at source, recycling, valorisation, treatment and last, but not
least, disposal by incineration or storage. This Program was drafted in accordance with the
Romgaz Integrated Management Policy Statement and was endorsed by the National
Agency for Environment Protection.
Also, in this case, Romgaz developed an application for waste management control,
whereby a permanent analysis and a continuous supervision of compliance with legal
requirements (waste management in accordance with legal requirements, tracking of waste
management performed by authorized contractors etc.);
Monitoring the compliance with legal requirements on environment protection, by
monitoring ways to clarify the exceeding of limits permitted by regulations in force. For
the entire company, permanent analysis and continuous supervision are carried out in
connection with the physical-chemical, bacteriological and biological indicators of
emitted pollutants, the frequency and ways of using results. In 2017, Romgaz exceeded
the legally allowed limits, with the effluents discharged into surface water bodies or
sewage networks; penalties were paid in this respect to the National Agency “Apele
Romane” or to the sewer operators, thus:
Exceeding the limit values of the CCOCr indicator, in the technological
purified water, coming from Roman car wash. Subsequently, cleaning
operations of the oil products separator were performed and the results of the
analysis of water sample taken subsequently were complying with the
indicators provided by NTPA 002;
Exceeding the maximum admitted concentration of impurities in the waste
water, coming from Bazna Spa Resort; penalties were paid in this respect to
the Water Basin Administration - Mures;
Exceeding the regulated water volume, at Roman Natural Gas Production
Section; penalties were paid in this respect to the Water Basin Administration -
Siret-Bacau;
Monitoring the settlement of environment notifications and complaints against Romgaz.
In 2017, one external environment complaint was recorded, as follows:
Notification regarding oil and water leaks, near the water settler –
hydrocarbons separator pre-cleaning the effluents coming from SC Mures
platform. Following the field inspections, it was decided that the rain pouring
down and affecting the Corunca commune around lunch time on July 13, 2017,
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Board of Directors’ Report 2017
generated water and mud discharges in the inspection chambers of Boema
Complex (located in the neighbourhood) as well as water and oil discharges
from the hydrocarbons separator pre-cleaning the effluents coming from SC
Mures platform, within the surrounded limits (for a small area). SC
AQUASERV, Targu Mures (the owner of the sewage network) was notified
regarding this incident, and it was shortly remedied in the end. At the same
time, in order to limit the effects of oil discharges from the separator, absorber
was used;
investment (according
After extending the scope of business by taking over Iernut thermoelectric power plant,
the aim was complying with the legal requirements applicable in this field of activity, in
2017 being monitored a total of 1,024,682 tons of CO2 for burners IMA 1, 4, 5. In Annex
3 “The National Investment Plan” of the Government Decision No.1096/2013 for the
approval of provisional free allocation of greenhouse certificates to electricity producers
during 2013-2020, Romgaz is included at line 22 with the “Combined Cycle Gas
Turbine”
the
amendment of Government Decision No.1096/2013 for the approval of provisional free
allocation of greenhouse certificates to electricity producers during 2013-2020, the
National Investment Plan included). According to Annex 1 of the same Government
Decision, Romgaz, as operator, received for CTE Iernut for 2017, a number of 412,322
greenhouse certificates (EUA). In 2017, Romgaz acquired a total number of 412,322
greenhouse certificates. As of December 31, 2017, Romgaz held in the account of the
Sole Register of Greenhouse Gas Emissions a number of 418,903 CO2 certificates, as
follows:
to Government Decision No.151/2015 for
o 412,322 greenhouse certificates (EUA), for 2017, acquired in December 2017;
o 549,763 greenhouse certificates (EUA), for 2016, acquired in December 2016;
o 140,000 greenhouse certificates acquired from the Stock Exchange, for 2016
conformity;
o 895,835 greenhouse certificates (validated) were submitted in the Sole Register
of Greenhouse Gas Emissions for 2016 conformity;
o 984,053 certificates were used for conformity of 2015 emissions;
o 687,204 certificates acquired in September 2015, namely the first 2015 tranche
(50%) and in November 2015, namely the second 2015 tranche (50%);
o 824,645 certificates for 2014 were used for partial conformity of 2014
emissions, such as 828,793 tons of CO2;
o Of the total of 962,085 certificates acquired for 2013, 507,620 were submitted
for conformity of 2013 emissions. Therefore, Romgaz used out of the 454,465
remaining certificates – 4,148 for 2014 conformity, and was left with 450,317
certificates;
o 7,587 certificates submitted to the Register by Electrocentrale Bucuresti for
conformity with the January 2013 emissions. Romgaz monitored conformity
after acquiring CET Iernut, respectively in February 2013;
Starting with 2016, Romgaz - CTE Iernut lacks CO2 certificates necessary for
emissions conformity, thus:
o In 2016, the electric power plant released 895,835 tons of CO2, the account of
the Sole Register of Greenhouse Gas Emissions on December 31, 2016 being
762,416 CO2 certificates. Thus, a shortage of 133,419 CO2 certificates is
registered, necessary for conformity of 2016, which were acquired during Q1
2017 and no later than April 30, 2017 (the legal term for conformity of 2016
emissions), from the Stock Exchange, by means of a brokerage firm.
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Board of Directors’ Report 2017
o In 2017, the electric power plant released 1,024,682 tons of CO2, the account
of the Sole Register of Greenhouse Gas Emissions on December 31, 2017,
being 418,903 CO2 certificates. Thus, a shortage of 605,779 CO2 certificates is
registered, necessary for conformity of 2017, which are to be acquired during
Q1 2018 and no later than April 30, 2018 (the legal term for conformity of
2017 emissions) from the Stock Exchange, by means of a brokerage firm.
According to Commission Regulation (EU) No.1123/2013 of November 8, 2013 on
determining international credit entitlements pursuant to Directive 2003/87/EC of the
European Parliament and the Council, the Protocol to the United Nations Framework
Convention on Climate Change (the Kyoto Protocol) establishes two mechanisms for
the creation of international credits that Parties may use to offset emissions. Joint
Implementation (JI) provides for the creation of emission reduction units (ERDs),
whereas the Clean Development Mechanism (CDM) provides for the creation of
certified emission reductions (CRs). The industries the fall under the European
emissions trading system to atmosphere (EU ETS) may use these credits to
compensate their obligations as regards the greenhouse gas emissions.
In this respect, Romgaz acquired as availability of linking (availability of EUA – ERU
certificates correlation) a number of 51,598 ERU certificates available to be used for
conformity for 2013 – 2020.
According to Decision No.1096 of December 17, 2013 for the approval of provisional
free allocation of greenhouse certificates to electricity producers during 2013-2020, as
operator, Romgaz received CO2 certificates, as follows:
Operator
Instalation
Annual allocation (tCO2/year)
SNGN
Romgaz SA
SNGN Romgaz
SA - CTE Iernut
2013
2014
2015
2016
2017
2018
2019
2020
962,085 824,645
687,204 549,763
412,322 274,882
137,441
-
based on the recommendations made by the Due Diligence Study, performed with the
aim of establishing the conformity level of the company to the environmental legislation
in force, identification of past and present environmental issues, as well as future
environmental risks the company may face, a Report on Significant Environment Issues
Remediation was prepared whereby costs, solutions and implementation terms for
remedy measures were assumed. In 2017, Romgaz monitored the implementation of
permanent measures and of multiannual implementation terms measures contained in the
Remediation Report (maintaining the perchloroethylene consumption below 1 ton/year
for each location so that the provisions of Government Decision no. 699/2003 on setting
measures to reduce emissions of volatile organic compounds due to use of organic
solvents for specific activities and installations; requesting the renewal of environment
permits with 45 days prior to the expiration; locating industrial objectives at sufficient
distance from the protected receptors; reducing fugitive emissions in the area of
calibration tanks, of metal tanks and of concrete tanks for temporary storage of reservoir
water by equipping the tanks with ecological dispersion systems; periodic payment to the
“Closing Fund” until the set value of provision is met for the specific waste storage at
Ogra; annual monitoring frequency for Dumbravioara drilling waste storage closed in
2003, etc.);
scheduling and organizing the environmental internal inspection, in order to verify the
conformity with legal requirements applicable to inspected activities.
In 2017, 50 environmental internal inspections were scheduled and performed (from
Romgaz headquarters on authorized units of the branches), further to which 3 Reports of
Determined Nonconformity were made, out of which 2 were closed within assumed time
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Board of Directors’ Report 2017
limit, 1 open (within assumed time limit). Also, Romgaz branches scheduled and
performed 129 environmental internal inspections further to which 3 Reports of
Determined Nonconformity were made, which were closed within the time limit;
assessment of conformity level to environmental protection requirements and contractual
requirements of contractors and sub-contractors of drilling works contracted by Romgaz
in 2017;
implementation of the 2017 action/measure programs for prevention and/or minimization
impact on the environment, that were implemented as follows:
landslide fighting;
installing waste water discharge installations;
installing glass fiber tanks;
installing waste water collection tanks;
transforming abandoned wells into reservoir water injection wells;
installing concrete mud tanks;
modernization of reservoir water storage tanks;
construction of wells monitoring the injection wells;
making payments for environment protection and permitting;
environment protection works required for well modernization;
environment protection works for access roads and well sites construction;
electricity supply works;
well recompletion works;
environment protection works for new wells drilling;
maintenance and repair works at waste water treatment plants;
expenses in connection with transportation, takeover and disposal of hazardous
installing non-polluting discharge systems;
and non-hazardous waste;
expenses in connection with laboratory analyses;
CO2 validation report fee;
Expenditures arising from monitoring the ichthyofauna of Mures River;
Expenditures with brokerage services;
Equivalent value of CO2 certificates.
In 2017, the Environmental Guard and the Water Basin Administrations made 64 inspections
at Romgaz locations. Following such inspections, Romgaz was not sanctioned/fined.
In 2017, Romgaz did not record any environmental accident.
During 2017, the competent state institutions, namely the Territorial Labour Inspectorates,
made 8 inspections and the Public Health District Authorities made 2 inspections. No
deficiencies were noted.
Individual protection equipment was acquired, based on the framework agreements and
subsequent contracts, for all the employees of the company.
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Board of Directors’ Report 2017
Also, a number of 4,040 influenza vaccine doses were acquired, in accordance with the
demand of the branches/headquarters.
According to the Collective Labour Contract, voluntary health insurance services were
acquired, of supplementary type, for all the employees.
The summarized breakdown of litigations is the following:
150 litigations, out of which:
83 cases where Romgaz is complainant;
30 cases where Romgaz is defendant;
15 cases where Romgaz is plaintiff claiming damages/injured party;
The (approximately) total value of the files where Romgaz is plaintiff is RON
2,032,928,217.97;
The (approximately) total value of the files where Romgaz is defendant is RON
9,033,831.51 and EUR 60,000.
The detailed list of litigations is shown in Annex 2 of this Report.
Page 46 of 94
Board of Directors’ Report 2017
The occurrence and thereafter the development and gradual diversification of what was truly
going to be the Romanian natural gas infrastructure has an important benchmark, year 1909,
when the first gas reservoir was discovered by drilling well 2 Sarmasel (Mures county).
During the immediately following years, a gas infrastructure unique in Europe for those times
started to outline at a reduced scale, consisting of the following assets:
gas transmission pipeline, the first of this kind in Europe, build in 1914,
connecting towns Sarmasel and Turda (Cluj county) and
gas compressor station from Sarmasel; build in 1927- the first one in Europe.
It is notable that the country’s large gas structures were discovered after 1960 and in parallel,
a complex infrastructure started to be developed at national scale dedicated exclusively to the
gas extraction process and later to the injection and underground storage process. These large
gas structures located in the Transylvanian basin supply even today considerable gas
quantities.
The infrastructure related to field production and to gas storage in depleted fields turned into
underground storages, looks today as a particularly complex system.
As a whole, the infrastructure of the company developed continuously before and after 1989.
The development of the production capacities reached the peak during 1970–1980 when the
annual production was extremely high, both due to the consumption demand and to the
considerable reservoir energy of most of the discovered gas fields.
Part of the company’s production infrastructure (assets) resulted from the nationalisation of
June 1948.
Currently, no natural or legal person, from the country or from abroad, claimed any asset of
Romgaz.
Although operational, most of the production facilities are several decades old, therefore, a
rehabilitation and modernisation process started a few years ago consisting of installing,
replacing or upgrading gas delivery/take over fiscal panels, gas dehydration stations, gas
compressor stations.
The production facilities relating to the company’s infrastructure are:
1.
2.
3.
4.
5.
6.
7.
Gas wells (currently producing wells, temporarily suspended wells waiting for
reactivation or recompletion operations, wells for reservoir water injection);
Pipelines (gathering pipelines connecting the well clusters, waste water pipelines,
industrial water pipelines);
Gas heaters (radiators);
Gas separators (underground separators, surface separators);
Flow metering panels (technological flow metering panels for almost every gas field,
fiscal or commercial flow metering panel located at the interface with the NTS);
Gas dehydration stations (conditioning):
Gas compression units:
•
low capacity portable compressors installed at the well head or at the cluster,
Page 47 of 94
Board of Directors’ Report 2017
•
•
booster compressors for one or more fields,
compressor stations, usually consisting of two or more units, intermediate or
final compressor stations (outlet to the NTS);
8.
9.
Industrial or reservoir water pumping stations;
Other facilities (buildings, workshops, electric lines, well access roads etc.).
Production facilities are used at their maximum capacity (close to 100%).
Currently, 154 gas fields are producing out of which 147 are well defined blocks and the rest
of 7 are blocks with experimental production.
Production from these fields is made by approximately 3240 wells and by almost the same
number of technological surface facilities consisting of flowlines, heaters (where the case may
be) liquid separators and gas flow metering panels.
From the total number of wells, 26% of the wells produce at depths over 2,000 m. Pressure
and flow limits of production wells are operated by 127 compressor units, of which 93 units
are grouped in 20 compressor stations, and 17 units are the so-called booster compressors,
located near well clusters.
One technical demand required by applicable laws is the quality of gas which is fulfilled in
proportion of 100% by means of 74 gas dehydration stations.
The other component of the company’s infrastructure, namely the information – technical
system consists of all information equipment and programs (software) used to monitor the
parameters related to gas research, production and storage activities. These complex
information programs consist of a series of modules that process the data received further to
seismic surveys of the earth crust, collects information resulting from gas wells researches,
information related to production history and other technical input data for performing cash
flow analyses etc.
Processing and interpretation of these input data leads to preparing extensive technic and
economic specifications called geological studies. These studies also analyse and substantiate
the investments planned for the field in question. The investments together with other
production stimulation works become mandatory once the geological study is approved by the
ANRM.
Bilciureşti Storage
Characteristics:
Location: Dâmboviţa County, approximately 40 km V-NV from Bucharest;
Commissioned in 1983;
Capacity:
o Working capacity: 1,310 million m3;
o Delivery capacity: 17 million m3/day;
Main fixed assets: 61 wells, out of which 57 injection/extraction wells, 3 piezometric
wells, 1 waste water
injection well, 26 km of gathering pipelines for 57
injection/extraction wells, 50 gas heaters, 24 separators, 14 gas metering facilities, 7 gas
dehydration stations, 33 km gathering pipeline, 3 reservoir monitoring parameters
systems, bi-dimensional fiscal metering system equipped with ultrasonic meter, two-stage
Page 48 of 94
Board of Directors’ Report 2017
compression station (Butimanu) composed of three compression modules and waste water
injection station.
Currently, design works for UGS upgrading were contracted with the scope of ensuring the
quality of the supplied gas quantities through the NTS as well as to increase the withdrawal
capacity to a maximum of 20 million m3/day.
Sărmăşel Storage
Characteristics:
Location: near Sarmasel, approximately 35 km NW from Tirgu-Mures, 35 km north
from Ludus and 48 km east from Cluj-Napoca.;
Commissioned in 1996;
Capacity:
o Working capacity: 900 million m3;
o Delivery capacity: 9.0 million m3/day ;
Main fixed assets: 63 wells, 26 km gathering pipeline for 63 wells, 77 separators, 9 km
collector, 1 reservoir monitoring parameters system, bi-directional fiscal metering
system equipped with ultrasonic meters, compressor station (Sarmasel)
In 2016, following investments were commissioned in order to increase the working capacity
of the storage up to 900 million m3/cycle:
A new gas compressor station equipped with 4 compressor units ;
3 gas dehydration stations;
Upgrading and flexibility of the fiscal metering system;
4 injection/extraction wells, including related technological installations;
5.5 km gathering pipelines, connection with the new compressor station – ISM
measure panel.
Urziceni Storage
Characteristics:
Location: Ialomita county approximately 50 km NE from Bucharest
Commissioned in 1978;
Capacity:
o Working capacity: 360 million m3;
o Delivery capacity: 4.7 million m3/day;
Main fixed assets: 20 wells, out of which 31 injection/extraction wells and 1 piezometric
well, 19.4 km of gathering pipelines for 31 injection/extraction wells, 31 gas heaters, 6
technological gas metering facilities, 1 gas dehydration station, 3.3 km gathering
pipelines, 3 reservoir monitoring parameters system, bi-directional fiscal metering system
equipped with ultrasonic meters, optic fibre data acquisition system and compressor
station equipped with 4 compressor units (Urziceni).
In 2016, the following investments were in progress in order to ensure the supplied gas
quality in the NTS as well as to constantly maintain the daily extraction capacity at an average
of 4 million m3/day:
Upgrading gas dehydration station;
Upgrading surface infrastructure.
During 2017, 2 new injection wells were drilled and put into service, works which included
the related technological installations, too.
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Cetatea de Baltă Storage
Characteristics:
Location: approximately 12 km S-V from Târnăveni;
Commissioned in 2002;
Capacity:
o Working capacity: 100 million m3;
o Delivery capacity: 1 million m3/day;
Main fixed assets: 14 wells, 7 km gathering pipelines for 14 wells, 6 separators, 6
technological gas metering facilities, 10 km gathering pipeline, field supervising system
and fiber-optic data acquisition system.
Gherceşti Storage
Location: Dolj County, near Craiova;
Commissioned in 2002;
Capacity:
o Working capacity: 150 million m3;
o Delivery capacity: 1.5 million m3/day;
Main fixes assets: 85 wells, out of which 79 injection/extraction wells, 6 piezometric
wells, 153 km gathering pipelines for 79 wells, 13 separators, 6 technological gas
metering facilities, 1 gas dehydration station, 42 km gathering pipeline, 7 reservoir
monitoring parameters systems, bi-directional fiscal metering system with two metering
lines, equipped with ultrasonic meters and communication system and fiber-optic data
acquisition system.
Bălăceanca Storage
Characteristics:
Location: approximately 4 km from Bucharest;
Commissioned in 1989;
Capacities:
o Working capacity: 50 million m3;
o Delivery capacity: 1.2 million m3/day;
Main fixes assets: 24 wells, out of which 21 injection/extraction wells and 3 piezometric
wells, 10 km gathering pipelines, 15 gas heaters, 4 separators, 4 technological gas
metering facilities, 1 gas dehydration station, 1.7 km gathering pipeline, 1 reservoir
monitoring parameters system, bi-directional fiscal metering system equipped with
ultrasonic meters, compressor station (Balaceanca) and communication system and fiber-
optic data acquisition system.
Well workover, capital repairs and well production tests represent all the services performed
with workover rigs, as well as equipment for specific support operations such as: cement plug
drilling installations, mud tank equipped with agitator, sand control-sand blender, DST- cased
hole testing of productive layers, shale shaker, mud pumps.
Special Well Operations are performed with the following equipment: cementing unit,
slickline, wireline, coiled tubing unit, liquid nitrogen converter, liquid nitrogen tank truck,
cement container, filter unit, equipment for discharge and measurement with two-phase
Page 50 of 94
Board of Directors’ Report 2017
separation, equipment fir discharge and measurement with three- phase separation, equipment
for tubing investigation, echometer, rental of tools and utilities, tubing cutting, packer
assembling device, hydraulic packer recovery tools, technical assistance for special well
operations, well fire-fighting equipment.
Future well workover and special well operations are required in order to stop production
decline.
The car fleet of STTM consists of 641 vehicles and machinery and 79 trailers, as follows:
Passenger carriers: cars (115), land vehicles (129), minibuses (13), buses (2) and large
buses (2);
passengers and cargo carriers < than 3.5 t (61) and > than 3.5 t (82);
vehicles for cargo transportation: dumpers (23), cesspit emptier (41), platform trucks (20),
tank trucks (3);
vehicles for heavy transportation: truck-tractors (3) and semitrailer trucks (11);
handling machinery: cranes from 12-18 t (2) and 24-35 t (20);
special vehicles: mobile laboratory for equipment testing and checking (1);
heavy machinery: bulldozers (8), caterpillar shovels (2), wheel loaders (17), motor grader
(3), compactor (3), front end loaders (10);
other machinery: tractor trucks (70), fork lift trucks, etc.;
other vehicles: trailers for heavy transportations, trailers and semitrailers (79).
STTM plans to ensure qualitative and economically efficient services due to the future
dynamics of Romgaz core business over the medium term (approximately 5 years).
CTE Iernut has an installed capacity of 800MW, including 6 power units: 4 Czechoslovakian
power units with an installed capacity of 100 MW each and 2 Soviet power units with an
installed capacity of 200 MW each. The units had been commissioned between 1963 and
1967.
The power plant is connected to the main road E60 by a 1.5km long road and to the national
railway system at Cuci by a 2 km railway both owned by the CTE Iernut.
Operating restrictions imposed by applicable environmental regulations
The 100 MW Power Units 1 and 4
During 2013, by commissioning a fuel gas recirculation system for boiler no. 1, NOx
emissions were reduced from 800 mg/Ncm flue gas to 300 mg/Ncm, complying therefore
with environmental regulations.
In compliance with the integrated environmental authorization for CTE Iernut, power units
no.1 and 4, with an installed capacity of 100MW each, may operate on a transition period
until June 30, 2020. The maximum NOx emissions must be reduced from 300 to 100 mg/Ncm
flue gas within this period.
If this last measure is not taken, the units will not be allowed to operate after June 30, 2020.
The 100MW Power Units 2 and 3
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Board of Directors’ Report 2017
Change of environment protection legislation, namely, Directive CE 2010/75/EU allow
limited time of operation for units 2 and 3 in case the emission reduction equipment of one or
more groups break down and power supply is a priority requirement. Therefore, as of January
2016, units 2 and 3 shall be put in dry preservation.
The 200MW power units 5 and 6
Low NOx emission burners have been installed in years 2010 and 2011. As such, an
environmental requirement included in the integrated environmental authorization was
fulfilled.
Due to these measures, the power units automatically enter the new transition period during
January 01, 2016 - December 31, 2020.
Investments play an important part in arresting the production decline, which is achieved by
discovering of new reserves, by improvement of the current recovery rate, and by
rehabilitation, development and modernization of existing facilities.
The company invested during 2013 – 2017 approximately RON 4.15 billion, as follows:
Year
2013
2014
2015
2016
2017
Total
Amount
thousand)
(RON
848,247
1,085,497
937,916
497,716
781,768
4,151,144
For 2017, Romgaz schelduled investments worth RON 1,143 million and invested RON 781.8
million, with 31.6% less than scheduled. As compared to 2016, the investments increased by
RON 284 million. The company financed all investments from own sources, and a part of the
investments related to CTE Iernut shall be refunded by the National Investment Plan.
The value of fixed assets commissioned during the reporting period was of RON 392 million.
By G.M.S. Resolution No.1 of April 25, 2017, the Director General approved the 2016
investment program and the relating budget, as Annex 4 to the income and expenditures
budget.
Major investments target in general projects such as:
continuing geological research works by performing surveys and drillings for the
discovery of new gas reserves;
production development by adding new facilities on existing structures;
improving the performance of facilities and equipment and increasing production
safety;
increase of underground storage capacities, flexibility and security of the existing
storages;
The table below shows the investments made in 2017, as compared to those scheduled and
accomplished in 2016:
Investment chapter
Ite
m
No.
0
1.
1.1 Natural gas exploration, production works
1
Investments in progress – total, out of which:
2016
2017
*RON thousand*
%
Schedule
Result
’17/’16
2
238,433
178,285
3
442,692
438,510
4
320,056
316,719
5=4/2x100
134.23
177.65
Page 52 of 94
Board of Directors’ Report 2017
1.2 Maintaining UGS capacity
59,953
3,000
2,281
3.8
1.3 Environment protection works
2. New investment – total, out of which:
2.1 Natural gas exploration, production works
2.2 Maintaining UGS capacity
2.3 Environment protection works
3.
4.
Investment in existing tangible assets
Equipment (other acquisition of tangible
assets)
5. Other investment (studies, licenses, software,
financial assets etc.)
195
21,316
19,995
1,287
34
200,983
31,838
1,182
365,884
354,764
8,000
3,120
250,173
66,394
1,056
541.54
230,409 1,080.92
7,480
221,980 1,110.18
581.19
949 2,791.17
92.66
134.23
186,234
42,735
5,146
17,857
2,334
43.35
*
TOTAL
497,716
1,143,000
781,768
157.07
The chart below shows the investments for 2017:
23,82%
1,25%
5,47%
I. Exploration Works, Exploitation
0,26%
0,30%
II. Investments in current tangible assets
(developments and modernizations)
III. Maintaining UGS capacity
IV. Independent equipment and installations
V. Environement protection works
VI. Expenses in connection with studies and
projects
68,91%
The summary of the achieved investment projects is shown below:
Main Projects
Planned 2017
Achieved 2017
Item
No.
1.
Drilling, exploration
2.
Surface exploration works
38 wells
2D Seismic – 200 km
3D Seismic – 1.200 km2
3.
4.
5.
Production drilling
Surface facilities – gas wells
3 wells
31 wells
Compressor stations and gas
dehydration stations in gas
fields
Dehydration station Galbenu II
24 completed wells
2 wells in progress
2D Seismic – 200 km
3D Seismic – 1.200
km2
2 completed wells
8 completed wells
8 wells in progress
completed
6.
Maintaining storage capacity
•
•
•
7.
Well recompletion
Well capitalized repair
8.
9.
Sărmăşel Storage:
- auxiliary drilling services
Urziceni Storage
- injection/extraction system
- drilling 2 wells
102 wells, correlated with the annual
program agreed by ANRM
140 wells
completed
completed
completed
188 wells
150 wells
Electricity production
Execution and performance of design
In progress
Page 53 of 94
Board of Directors’ Report 2017
10. Partnerships/Associations
11. Studies
service contract CTE Iernut,
completion term 2020
Aurelian Petroleum – currently
Raffles (Brodina):
- re-testing Voitinel 1 well
Lukoil:
- geological and geophysical data
interpretation
- geological and geophysical data
analysis and assessment of reservoir
data
- upgrading the geological model of
LIRA
- integrate analysis of geophysical
and geological data
- identifying new prospects
- TT&T
Amromco:
- seismic acquisition for 1 block
- drilling 3 wells;
- recompletion operations for 8 wells
- surface facilities for 3 wells and
increase of compressor capacity for
Bibeşti drying station
Slovacia:
- drilling 3 wells in Blocks Svidnik,
Snina and Medzilaborce
Reservoir studies
completed
completed
completed
completed
completed
completed
partially completed
completed
completed
completed
completed
incompleted
100%
A very important objective is “Developing CTE Iernut by the construction of a new
powerplant, with combined cycle gas turbine” with deadline for completion in Q1 2020.
In 2017, the Construction Authorization/Permit was obtained and the following works were
performed:
Land clearing/development by buildings demolition;
Approach and marginal road development;
Storage platform development (site management);
Construction works for foundations began.
One very complex issue largely impacting the implementation of the investment plan is
found in the investment preparation phase and consists of obtaining land permits,
approvals, agreements and authorizations required for the performance of works and in the
procurement phase.
The level of results was negatively influenced by causes specific for both phases:
-
-
Difficult to perform the drilling activity regarding access to public roads;
Impossibility to obtain lands and implicitly, approvals and construction permits for
surface facilities and gas collectors;
- Delays when performing the 3D seismic survey works generated by the difficulties in
obtaining the approvals and agreements as well as the acceptance of the land owners to
enter in the above-mentioned blocks;
Page 54 of 94
Board of Directors’ Report 2017
- Repeat procedures for procurement of drilling works for 2 wells for which the bidder did
not have the available drilling installations;
- Long time interval to obtain the approvals and agreements issued by water, environment,
property register, agricultural related bodies, with direct effects upon issuance of the
construction authorization for the execution of surface facilities;
- Delays in the public procurement processes due to repeated dismissals by ANAP of
certain award documentations (I.T. Prahova and Ialomița lots).
The work completion degree in relation to the work programs for each partnership is indicated
below (RON million):
Ite
m
no.
1
2
3
4
*
Partnership/Association
2017
Schedule
2017
Results
Results/
Schedule
Romgaz, Alpine Oil&Gas and JKX Oil&Gas
- Slovacia
Romgaz and Aurelian (currently Raffles)
Romgaz and Amromco
Romgaz, Lukoil and PanAtlantic
Total work program
8,643.00
780.83
9.03%
1,118.88
24,890.46
3,912.00
38,564.34
917.89
22,507.47
4,552.44
28,758.64
82.04
90.43
116.37
74.57
Important issues to be noted:
By the end of 2017, following works were performed: interpretation of geological and
geophysical data, geological and geophysical data analysis and assessment of reservoir
data, upgrading the geological model of Lira discovery and the calculation of Lira
reserves, integrate analysis of geological and geophysical data. Also, new prospects
were identified, but also the calculation of geological resource and risk evaluation
were carried on. Considering that Exploration Stage II expires on May 5, 2018, the
Operator started to prepare the necessary documentation for the extension with another
2 (two) years of the Exploration Stage and optionally with one and a half year.
Regarding TT&T budgetary category, because during the previous years the amounts
were not spent completely, the Operator used prevalently the amount deferred from
the previous years. From the budgetary value for 2017 the amount of USD 500
thousand was not entirely spent, thus being deferred for the following periods
(Association: Romgaz, Lukoil and PanAtlantic);
In September 2017, the workover RIG was put into service for 1 Voitinel well and
began re-testing the well. In December 2017, the well was tested with flows between
50-80 thousand m3/day. The documentation necessary to re-put the well into
conservation until a decision is made regarding the way to exploit the discovery
(Association: Romgaz and Aurelian Petroleum – currently Raffles);
On June 20, 2017, all the partners signed Romgaz’s Withdrawal Agreements from the
two companies where Romgaz was a shareholder as well as the Loan Assignment
Agreement to the general associate of the two entities. The Withdrawal Costs were
established from the related obligations to 2016 budget of the two companies, to
which Romgaz engaged before the withdrawal. These costs were in amount of EUR
2,985 for Cybinka Block and EUR 132,346 for Block Torzym, and were paid on June
29, 2017. (Association: Romgaz, Aurelian Oil&Gas Poland and Sceptre Oil&Gas -
Polonia);
For 2017, the Managing Committee of the Association approved in the Investment
Program the drilling of 3 new wells and putting them into production. The drilling was
Page 55 of 94
Board of Directors’ Report 2017
proposed to be performed during Q1 2017, for the wells that were not drilled in 2016,
Bibesti 212 and 211, and it was entirely completed and the wells were put into
production with costs lower than the costs previously estimated. In Q 4 began drilling
well Balta Alba 120, which was also put into production. Due of the production
decrease, recompletion operation were performed for 8 wells proposed in the works
program in order to bring them into production and to develop the gas reserves.
Surface facilities were completed for Well Bibesti 211, 212 and Balta Alba 120 by
construction of a gathering pipeline, installing a new gas dehydration station with a
capacity of 300000 Nm3 in order to increase the gas conditioning capacity for Bibesti
Group. 3D seismic acquisition was made for a surface of 60 km2 for Block Bibeşti
Sârdăneşti and abandonment works for 5 wells were completed. The works proposed
and approved by the Operating Committee of the Association were performed entirely
(Association: Romgaz and Amromco);
Proposed works were not completed due to the difficulties which the Operator
constantly encounters, difficulties determined both by the local community and the
central authorities. For example, environmental impact studies were required, lasting
between 6 and 12 months, for Well Smilno, Block Svidnik, Ruska Poruba, block
Medzilaborce and, probably, a similar study is to be required for Well Kriva Olka,
despite the fact that such requirements are unsubstantiated. Consequently, the Operator
focused on securing the access to a new location, Sarisske Cierne, where the former
Operator, Aurelian, planned to drill a well in 2012. For the new location, Sarisske
Cierne, the prospects are optimistic, even though success cannot be guaranteed
(Association: Romgaz, Alpine Oil&Gas and JKX Oil&Gas - Slovacia);
The Association Agreement with Schlumberger will expire in 2018. In 2013,
Schlumberger expressed its intention to extend the contractual period with another 10
(ten) years, until 2028. Following this requirement, Romgaz performed an economic
analysis resulting that the association is and will be profitable both in case Romgaz
explores Laslaul Mare Field, as a sole partner and in association with Schlumberger, in
terms of achievement of the necessary investments for maintaining the current
production trend. Because, in Schlumberger’s understanding, future income to cover
the value of the investments scheduled to be performed between 2017 – 2018 cannot
be obtained, and because Romgaz did not agree upon any possible extension of the
Agreement, the Works Program for 2017 shall not contain any investment work. In
case the Association Agreement shall not be extended, Romgaz is bound to pay
Schlumberger the undepreciated value of the investments made until the agreement
expires. On August 31, 2018 the estimated undepreciated value is RON 21,806,108.34
(approx. USD 5,451,527) (Association: Romgaz and Schlumberger).
Page 56 of 94
Board of Directors’ Report 2017
Government Decision No.831/August 4, 2010 on the approval of the privatization strategy by
public offering of Societatea Nationala de Gaze Naturale “Romgaz” S.A. Medias, and the
mandate of the public institution involved in the development of such process approved “the
sale by secondary initial public offering of shares representing 15% of S.N.G.N. “Romgaz
S.A. share capital by the Ministry of Economy, Trade and Business Environment, through the
Office of State Ownership and Privatization in Industry”.
Since November 12, 2013, the company’s shares have been traded on the regulated market
governed by BVB under the symbol “SNG”, and on the regulated market governed by LSE
(the London Stock Exchange) as GDRs issued by The Bank of New York Mellon under the
symbol “SNGR”.
Item
No.
Description
2013
2014
2015
2016
2017
385,422,400 385,422,400 385,422,400 385,422,400 385,422,400
1.
Number of shares
2. Market capitalization5
*million RON
*million EUR
3. Maximum price (RON)
4. Minimum price (RON)
5.
6.
Year end price (RON)
Net profit per share (RON)
7. Gross dividend per share
(RON)
13,178
2,952
35.60
33.80
34.19
2.58
2.57
8.
9.
Dividend yield (7./5.x100)
7.5%
Exchange rate (RON/EUR)
4.4639
14,018
3,127
36.37
32.41
35.36
3.66
3.15
8.9%
4.4834
10,483
2,315
36.55
26.30
27.20
3.10
2.70
9.9%
4.5285
9,636
2,122
27.55
21.60
25.00
2.66
5.76*)
12,064
2,589
33.95
25.10
31.30
4.81
4.99**)
23.04%
4.5411
15.94%
4.6597
*) The gross dividend per share of RON 5.76 is composed of the gross dividend per share for financial year 2016
in amount of RON 2.40/share, and the additional gross dividend of RON 1.42/share resulted from the
distribution of retained earnings and the additional gross dividend of RON 1.94/share assigned under the
provisions of Article II and III of the Government Emergency Ordinance No.29/2017, distributed from the
company’s reserves, representing own financing sources.
**) proposed dividend.
For 2017, the share and GDR-s prices oscillated substantially, recording an increasing trend
by the end of H 1, followed by a considerable decrease, due to ex-data dividends for 2016
during Q 3 and by a recovery during Q 4, due to the additional dividends.
Thus, at the beginning of 2017, Romgaz share price was RON 25.20, and after reaching a
minimum of RON 25.10 on January 13, 2017, the share price increased considerably,
reaching a maximum of RON 33.95/share on May 29, 2017. Q 3 began with a low share price
(minimum RON 26.60/share on July 7, 2017, after the registration date of 2016 dividends)
and subsequently it increased, reaching a maximum of RON 31.80/share on September 11,
2017, after noticing the market in respect of the distribution proposal of some additional
dividends. In Q 4, the share price registered low oscillation values as compared to the rest of
the year, between the range RON 30.35 – 32.50/share. For the last trading day of the year, the
5 Calculated on the basis of the closing price of the last trading day in the respective year, and on the basis of the
exchange rate announced by BNR, valid for the last trading day in the respective year
Page 57 of 94
Board of Directors’ Report 2017
share price was RON 31.30/share, by 24.21% higher than the share value registered on
January 31, 2017.
The GDR-s registered a minimum price on the first trading day of the year (USD 5.67/GDR),
following the same trend as the shares, with a maximum value registered on May 26, 2017
(USD 8.21/GDR). On December 29, 2017, the GDR price was by 39.33% higher than the first
trading day, namely USD 7.90/GDR.
Since the listing day up to present, Romgaz is considered an attractive company for investors
and holds a significant position in the top of local issuers, being included in BVB indices as
well as in indices of other markets, as follows:
- Second place, by market capitalization, in the top of Premium BVB issuers. With a
market capitalization amounting to RON 12,064 million (respectively EUR 2,589
million) as of December 31, 2017, Romgaz is the second largest listed company in
Romania, being preceded by OMV Petrom with a capitalization in amount of RON
16,200 million, respectively EUR 3,477 million;
- Fifth place as regards the total amount of transactions in 2017, in the top of local
issuers in the main segment of BVB, after Fondul Proprietatea, Banca Transilvania,
BRD and OMV Petrom;
- Weight of 11,15% and 9,76% in BET index (top 13 issuers) and respectively BET-XT
index (top 25 issuers), 27.35% in BET-NG index (energy and utilities) and 11.61% in
BET-TR index (BET Total Return).
Performance of Romgaz shares between listing and December 31, 2017 to the BET index, is
shown below:
40,00
35,00
30,00
25,00
20,00
e
n
u
i
t
c
a
/
i
e
l
15,00
10,00
5,00
0,00
3
1
0
2
/
2
1
/
1
1
3
1
0
2
/
1
1
/
2
1
.
4
1
0
2
1
0
7
1
.
.
4
1
0
2
2
0
7
1
.
4
1
0
2
/
8
1
/
3
4
1
0
2
/
6
1
/
4
.
4
1
0
2
5
0
2
2
.
.
4
1
0
2
6
0
4
2
.
.
4
1
0
2
7
0
3
2
.
10000,00
9000,00
8000,00
7000,00
6000,00
5000,00
4000,00
3000,00
2000,00
1000,00
0,00
5
1
0
2
/
9
2
/
1
5
1
0
2
/
7
2
/
2
5
1
0
2
/
0
3
/
3
5
1
0
2
/
5
/
5
5
1
0
2
/
5
/
6
5
1
0
2
/
6
/
7
5
1
0
2
/
4
/
8
5
1
0
2
/
3
/
9
5
1
0
2
/
2
/
0
1
5
1
0
2
/
2
/
1
1
5
1
0
2
/
3
/
2
1
6
1
0
2
/
8
/
1
6
1
0
2
/
8
/
2
6
1
0
2
/
8
/
3
6
1
0
2
/
6
/
4
6
1
0
2
/
6
/
5
6
1
0
2
/
6
/
6
6
1
0
2
/
6
/
7
6
1
0
2
/
4
/
8
6
1
0
2
/
5
/
9
6
1
0
2
/
4
/
0
1
6
1
0
2
/
2
/
1
1
6
1
0
2
/
5
/
2
1
7
1
0
2
/
6
/
1
7
1
0
2
/
7
/
2
7
1
0
2
/
8
/
3
7
1
0
2
/
6
/
4
7
1
0
2
/
9
/
5
7
1
0
2
/
2
1
/
6
7
1
0
2
/
1
1
/
7
7
1
0
2
/
9
/
8
7
1
0
2
/
8
/
9
7
1
0
2
/
9
/
0
1
7
1
0
2
/
7
/
1
1
7
1
0
2
/
8
/
2
1
SNG
BET
.
4
1
0
2
0
1
3
2
.
.
4
1
0
2
1
1
1
2
.
.
4
1
0
2
2
1
3
2
.
4
1
0
2
/
2
2
/
8
.
4
1
0
2
9
0
4
2
.
Performance of GDRs traded on the London Stock Exchange and RON/USD exchange rate
movements are shown below:
Page 58 of 94
Board of Directors’ Report 2017
14,00
12,00
10,00
8,00
6,00
4,00
2,00
0,00
R
D
G
/
D
S
U
3
1
0
2
/
2
1
/
1
1
3
1
0
2
/
1
1
/
2
1
.
4
1
0
2
1
0
7
1
.
.
4
1
0
2
2
0
7
1
.
4
1
0
2
/
8
1
/
3
4
1
0
2
/
6
1
/
4
.
4
1
0
2
5
0
2
2
.
.
4
1
0
2
6
0
4
2
.
.
4
1
0
2
7
0
3
2
.
4
1
0
2
/
2
2
/
8
.
4
1
0
2
9
0
4
2
.
.
4
1
0
2
0
1
3
2
.
.
4
1
0
2
1
1
1
2
.
.
4
1
0
2
2
1
3
2
.
5,00
4,50
4,00
3,50
3,00
2,50
2,00
1,50
1,00
0,50
0,00
D
S
U
/
i
e
l
5
1
0
2
/
9
2
/
1
5
1
0
2
/
7
2
/
2
5
1
0
2
/
0
3
/
3
5
1
0
2
/
1
/
5
5
1
0
2
/
4
/
6
5
1
0
2
/
3
/
7
5
1
0
2
/
3
/
8
5
1
0
2
/
2
/
9
5
1
0
2
/
1
/
0
1
5
1
0
2
/
0
3
/
0
1
5
1
0
2
/
2
/
2
1
6
1
0
2
/
7
/
1
6
1
0
2
/
5
/
2
6
1
0
2
/
7
/
3
6
1
0
2
/
5
/
4
6
1
0
2
/
6
/
5
6
1
0
2
/
7
/
6
6
1
0
2
/
7
/
7
6
1
0
2
/
5
/
8
6
1
0
2
/
7
/
9
6
1
0
2
/
6
/
0
1
6
1
0
2
/
4
/
1
1
6
1
0
2
/
7
/
2
1
7
1
0
2
/
2
1
/
1
7
1
0
2
/
3
1
/
2
7
1
0
2
/
4
1
/
3
7
1
0
2
/
2
1
/
4
7
1
0
2
/
7
1
/
5
7
1
0
2
/
0
2
/
6
7
1
0
2
/
9
1
/
7
7
1
0
2
/
7
1
/
8
7
1
0
2
/
8
1
/
9
7
1
0
2
/
7
1
/
0
1
7
1
0
2
/
5
1
/
1
1
7
1
0
2
/
8
1
/
2
1
USD/GDR
lei/USD
The General Meeting of Shareholders determines the value of dividends to be distributed to
shareholders considering the specific legal provisions.
Therefore, Government Ordinance No. 64/20016 approved by Law No. nr.769/2001, as
amended, provides at Article 1, par. (1), let. (f) that the profit after deduction of profit tax
shall be distributed as follows, unless otherwise prescribed under special laws:
a) legal reserves;
b) other reserves representing tax facilities provided by law;
c) covering accounting losses for the previous years, except for the retained
accounting losses as a result of adjustments required under the application of IAS 29
“Financial Reporting in Hyperinflationary Economies”, according to the Accounting
Regulations compliant with the International Financial Reporting Standards and the
Accounting Regulations in line with the Council Directive 86/635/EEC and the
International Accounting Standards applicable to credit institutions;
c^1) setting own financing sources for projects co-financed out of external loans, as
well as for the amounts necessary for reimbursing capital instalments, paying interests,
commissions and other costs related to these external loans;
d) other distributions provided by law;
e) employees’ participation to profits; national companies and companies fully or
majority owned by the state, as well as autonomous administrations which undertook
and established in their income and expense budgets the obligation to participate in the
distribution of profits, as a result of the employees’ services in relation thereto, may
grant these rights up to 10% of the net profit, however not exceeding the level of one
monthly average base salary of the relevant company during the respective financial
year;
6 Government Ordinance No. 64/August 30, 2001, on distribution of profit in state-owned companies or
companies where the state is sole or majority owner, as well as in autonomous regies
Page 59 of 94
Board of Directors’ Report 2017
f) a minimum of 50% contribution to the state or local budget, in the case of
autonomous administrations, or dividends, in the case of national companies and
companies fully or majority owned by the state;
g) the profit undistributed according to items a) - f) is distributed to other reserves and
represents own financing sources, and it can lately be distributed as dividends or
instalments to the state or the local budget in case of autonomous regies.
Profit is distributed for the purposes and in the amounts referred to at paragraph (1) items e),
f), and g) after deduction of the amounts related to the purposes determined under special
laws stipulated at items a), b), c), c^1), and d) of the same paragraph.
Profit is distributed subject to the accounting profit recorded under statutory financial
statements which have been prepared according to the International Financial Reporting
Standards (IFRS), adopted by EU, in compliance with national legislation.
In accounting terms, participation of employees in the distribution of profit is registered as a
wage related expense recognized in the financial statement of the year when the profit was
obtained by the Company. The participation of employees in the distribution of profit is paid
in the subsequent year.
By way of derogation from provisions of Law No. 31/1990 providing that the dividends must
be paid no later than six months after the approval of the annual financial statements, the
state-owned companies are required, according to the provisions of Government Ordinance
nr.64/2001, to pay the due dividends to the shareholders within 60 days from the legal
deadline for the submission of the annual financial statements of the competent fiscal
authorities.
According to Government Emergency Ordinance No. 29/20177:
“The amounts distributed in the previous years from other reserves under the
provisions of Art. 1 let. (g) of Government Ordinance No.64/2001 [...], existing at the
date of entry into force of this Emergency Ordinance, can be redistributed as
dividends [...]” - Art.II;
“After the approval of the financial statements of 2016, the entities provided in Art. 1,
par. (1) of the Government Ordinance No.64/2001, [...], the retained earnings existing
in the balance account on December 31, can be distributed as dividends” - Art.III par.
(1).
The table below shows the status of dividends for the years 2015-2017:
Description
2015
2016
Proposal 2017
Dividends
Gross dividends per share (RON/share)
Dividend distribution rate (%)
Number of share
1,040,640,480
2.70
87.13
2,220,033,024
5.76*)
141.24
1,923,257,776
4.99**)
103.70
385,422,400
385,422,400
385,422,400
*) The gross dividend per share of RON 5.76 is composed of the gross dividend per share of the financial year
2016 in amount of RON 2.40/share, and the additional gross dividend of RON 1.42/share resulted from the
distribution of retained earnings and the additional gross dividend of RON 1.94/share assigned under the
provisions of Article II and III of the Government Emergency Ordinance No.29/2017, distributed from the
company’s reserves , representing own financing sources.
**) proposed dividend.
7Government Emergency Ordinance No. 29 of March 30, 2017, to amend Art. 1 par. (1) let. g) of the
Government Ordinance No. 64/2001 on the distribution of profits in national companies, and trading companies
with full or majority state capital, as well as in autonomous regies, and to amend Art. 1 par. (2) and (3) of the
Government Emergency Ordinance no.109/2001 on corporate governance of public enterprises.
Page 60 of 94
Board of Directors’ Report 2017
G.M.S. Resolution No.7/October 20, 2017, approved the distribution of additional dividends
in gross total amount of RON 747,719,456 (RON 1.94/share).
The Government of Romania mandated the state representatives in the General Meeting of
Shareholders/the Board of Directors of national companies and majority or entirely state
owned companies and of autonomous regies, to take all the necessary measures for the
distribution of a minimum share of
in 2017 (as
dividends/payments) to the state budget. The Government took this decision through a
Memorandum adopted at the meeting of February 8, 2018.
90% of net profit achieved
The internal regulation “Dividend Policy” was approved by the company’s Board of Directors
in March 2017 and is currently published on the company’s webpage www.romgaz.ro, at the
section “Investor Relations – Corporate Governance – Reference Documents”.
Page 61 of 94
Board of Directors’ Report 2017
The selection and appointment of the company’s members in the Board of Directors was
accomplished in compliance with the provisions of the GEO No.109/2001 on corporate
governance in state-owned enterprises, as amended, approved by Law No.111/2016 and the
Methodological Norms of Application (GD No. 722/2016).
The members of the Board of Directors as of December 31, 2017, are as follows:
Item
No.
Name
Nistoran Dorin Liviu
Position in
the Board
Chairman
1
2
3
4
5
6
7
Ciobanu Romeo Cristian
member
Cermonea Ioan Daniel
member
Grigorescu Remus
member
Baciu Sorana Rodica
member
Volintiru Adrian Constantin
member
Anghel Daniel Florin
member
Status*)
Professional
Qualification
Institution of
Employment
independent
non-executive
independent
non-executive
independent
non-executive
independent
non-executive
independent
non-executive
independent
non-executive
non-executive
Engineer
PhD
Engineer
Engineer
SC Televoice Grup
SRL
Universitatea Tehnică
Iaşi
Consiliul Judeţean
Sibiu
PhD in
Economics
Universitatea
“Constantin
Brâncoveanu”
Economist
SC Acgenio SRL
Economist
Legal adviser
-Economist
SC Exclusiv Clean
International SRL
Agenţia Naţională de
Administrare Fiscală
*) - members of the Board of Directors submitted the independent statements in compliance with the provisions of Romgaz
Corporate Governance Code.
During 2017, The Board of Directors underwent the following changes:
- On April 25, 2017: By G.M.S Resolution No.1/2017, Mr. Chisalita Dumitru, Mr. Jude
Aristotel Marius, Mr. Stoicescu Razvan Florin and Mrs. Negrut Aurora were revoked
from their positions as members of the Board, as a result of their mandates’ expiration
on May 2017;
- On April 25, 2017: By Resolution No.1/2017, the G.M.S. appointed Mr. Stan Bogdan
Nicolae, Mr. Chirila Alexandru, Mr. Gheorghe Gheorghe Gabriel and Mr. Metea
Virgil Marius as interim members of the Board;
- On May 10, 2017: By Resolution No.11, the Board of Directors appointed Mr.
Tcaciuc Sebastian Gabriel as chairman of the Board of Directors, by Resolution no.11;
he was expected to exercise his duties as of May 15, 2017;
- On June 7, 2017: By Resolution No.14, The Board of Directors appointed Mr.
Gheorghe Gheorghe Gabriel as chairman of the Board;
- On July 27, 2017: By Resolution No.18, the Board of Directors took note of Mr.
Tcaciuc Sebastian Gabriel’s resignation from his position as a member of the Board,
as of August 11, 2017 and acknowledged the vacancy of a position as member in the
Board;
- On July 27, 2017: By Resolution No.18, the Board of Directors appointed Mrs. Baciu
Sorana Rodica as interim member of the Board, as of August 11, 2017, until the next
meeting of the G.M.S.;
Page 62 of 94
Board of Directors’ Report 2017
- On September 7, 2017: By Resolution No.5/2017, the G.M.S. elected, by cumulative
vote, Mr. Gheorghe Gheorghe Gabriel, Mr. Stan Bogdan Nicolae, Mr. Ciobanu Romeo
Cristian, Mr. Nistoran Dorin Liviu, Mr. Cermonea Ioan Daniel, Mr. Grigorescu Remus
and Mrs. Baciu Sorana Rodica as members of the Board, for a 4 months mandate;
- On September 14, 2017: By Resolution No.26, the G.M.S. appointed Mr. Gheorghe
Gheorghe Gabriel, as the chairman of the Board;
- On October 19, 2017: By Resolution No.29, the Board of Directors took note of Mr.
Gheorghe Gheorghe Gabriel’s resignation from his position as chairman of the Board
and acknowledged the vacancy of a position as member in the Board as of October 20,
2017;
- On October 19, 2017: By Resolution No.29, the Board of Directors appointed Mr.
Nistoran Dorin Liviu as the chairman of the Board;
- On November 27, 2017: By Resolution No.33, the G.M.S. took note of Mr. Stan
Bogdan Nicolae’s resignation from his position as a member of the Board, as of
November 7, 2017 and acknowledged the vacancy of a position as member in the
Board;
- On November 27, 2017: By Resolution No.33, the G.M.S. appointed Mr. Volintiru
Adrian Constantin and Mr. Anghel Daniel Florin as interim members of the Board,
until the next meeting of the G.M.S.;
- On December 20, 2017: By Resolution No.9/2017, the G.M.S. elected, by cumulative
vote, Mr. Nistoran Dorin Liviu, Mrs. Baciu Sorana Rodica, Mr. Ciobanu Romeo
Cristian, Mr. Grigorescu Remus, Mr. Cermonea Daniel Ioan, Mr. Volintiru Adrian
Constantin and Mr. Anghel Daniel Florin as members of the Board, for a 4 months
mandate, as of January 8, 2018, or until the completion of the selection procedure of
the directors according to the G.E.O. No.109/2011;
The Curricula Vitae of the current Board directors of the company are to be found on the
company’s webpage www.romgaz.ro, at “Investor Relations – Corporate Governance – The
Board of Directors”.
to
the
is no agreement,
According
understanding or family relationship between them and another person that contributed to
their appointment as directors.
information supplied by each director,
there
As of December 31st, 2017, no member of the Board holds any shares within the company.
Virgil Marius Metea - Director General (CEO) January 1- December 14, 2017
By Resolution no. 8 of June 12, 2013 the Board of Directors appointed Mr. Virgil Marius
Metea as director general and delegated internal management powers and representation
competences to him. The Mandate Contract was concluded on a 4 year period (June 12, 2013-
June 13, 2017) and can be renewed by addendum upon the resolution of the Board of
Directors.
By Resolution no. 14 of June 7, 2017 the Board of Directors approved the renewal of Mr.
Virgil Marius Metea contract of mandate - Director General.
Page 63 of 94
Board of Directors’ Report 2017
By Resolution no. 36 of December 14, 2017 the Board of Directors revoked the mandate of
Mr. Virgil Marius Metea as director general.
Cindrea Corin Emil - Director General (CEO) starting with December 14, 2017
The Board of Directors appointed Mr. Cindrea Corin Emil by Resolution no. 37 of December
14, 2017 as interim director general for a 4 month period, having the possibility to extend the
mandate up to maximum 6 months, according to legal provisions, and delegated internal
management powers and representation competences to him.
Bobar Andrei – Chief Financial Officer (CFO)
The Board of Directors appointed Mr. Bobar Andrei by Resolution no. 30 of November 2,
2017 as chief financial officer. The contract of mandate was concluded for a 4 month period,
starting with November 2, 2017 and it will be automatically extended for successive periods
of 4 months until appointment of a Board of Directors, whose members will be selected in
compliance with GEO no. 109/2011. Thereafter the Board of Directors will set the
performance indicators and objectives based on the Management Plan, as well as the term of
the mandate.
The table below shows the management positions to which the Board of Directors did not
delegate managing powers:
Name
Position
ROMGAZ - headquarters
Rotar Dumitru Gheorghe
Dobrescu Dumitru
Bobar Andrei
Chertes Viorel Claudiu
Ciolpan Vasile
Ştefănescu Dan Paul
Stan Ioan
Stancu Lucian Adrian
Bodogae Horea Sorin
Pavlovschi Vlad
Balasz Bela Atila
Morariu Dan Nicolae
Bîrsan Mircea Lucian
Sorescu Eugen
Pleşa Vasile Gabriel
Mediaş Branch
Man Mihai Ioan
Achimeţ Teodora Magdalena
Şutoiu Florinel
Seician Daniel
Tîrgu Mureş Branch
Dincă Ispasian Ioan
Papoi Ilona
Rusu Graţian
Baciu Marius Tiberiu
Ploieşti Branch
Cârstea Vasile
Ionescu Viorica Maria
Deputy Director General
Deputy Director General
Chief Financial Officer (until November 2, 2017)
Management Support Director
Energy Trade Director
Exploration-Production Director
Human Resources Director
Corporate Management Director
Procurement Direction Director
Business Development Director
Energy Management Director
Information Technology and Telecommunication Director
Technical Director
Exploration Director
Quality, Health, Safety and Environment Director
Director
Economic Director
Production Director
Technical Director
Director
Economic Director
Production Director
Technical Director
Director
Economic Director
Page 64 of 94
Board of Directors’ Report 2017
Vecerdea Dan Adrian
Iernut Branch
Bircea Angela
Vlassa Susana Ramona
Oprea Maria Aurica
Ocrainiciuc Mihai
SIRCOSS
Stăncicu Sorin
Bordeu Viorica
Gheorghiu Sorin
STTM
Pop Traian
Ilinca Cristian Alexandru
Cioban Cristian Augustin
Storage Director
Director
Economic Director
Commercial Director
Technical Director
Director
Economic Director
Technical Director
Director
Economic Director
Operation-Development Director
The members of the executive management, except the director general and the chief financial
officer (starting with November 2, 2017), are employees of the company, having an individual
labour contract for an indefinite period.
The management and operating personnel are employed, promoted and dismissed by the
director general based on the competences delegated to him by the Board of Directors.
According to our information, there is no agreement, understanding or family relationship
between the members of the above mentioned executive management and another person
that contributed to their appointment as members of the executive management.
The table below shows the number of shares held by the members of the executive
management as of December 31, 2017:
Name and Surname
Number of shares held
Weight in the capital share (%)
Item
no.
0
1
2
3
4
5
6
7
8
9
1
Rotar Dumitru Gheorghe
Bobar Andrei
Ştefănescu Dan-Paul
Cârstea Vasile
Stăncicu Sorin
Ilinca Cristian Alexandru
Morariu Dan Nicolae
Dincă Ispasian Ioan
Vecerdea Dan Adrian
20,611
4,400
601
412
76
74
52
48
45
38
2
3
0.00534764
0.00114160
0.00015593
0.00010690
0.00001972
0.00001920
0.00001349
0.00001245
0.00001168
0.00000986
10
Balasz Bela Atila
To the best of our knowledge, the persons mentioned at 6.1 and 6.2 above, have not been
involved in litigations or administrative proceedings related to their activity in Romgaz in
the last 5 years, nor in proceedings related to their capacity of fulfilling the duties.
Page 65 of 94
Board of Directors’ Report 2017
The individual financial statements of the Company have been prepared in accordance with
the provisions of the International Financial Reporting Standards (IFRS) as adopted by the
European Union and provisions of PFM Order no. 2844/2016. For the purposes of the
preparation of these individual financial statements, the functional currency of the Company
is deemed to be the Romanian Leu (RON). IFRS, as adopted by the EU, differs in certain
respects from IFRS as issued by the IASB. However, the differences have no impact on the
Company’s individual financial statements for the years presented.
The individual financial statements have been prepared on a going concern basis in
accordance with the historical cost convention.
The table below presents a summary of the statement of individual financial position as of
December 31, 2017:
Indicator
31.12.2015
31.12.2016
31.12.2017
(RON
thousand)
(RON
thousand)
(RON
thousand)
Variance
(2017/2016)
0
1
2
3
4=(3-2)/2*100
Assets
Non current Assets
Property, plant and equipment
5,996,460
5,789,262
5,842,366
Other intangible assets
399,859
397,864
412,284
Subsidiaries
Associates
Other Financial Investments
Other non-current assets
Deferred tax asset
Total non-current assets
Current Assets
Inventories
Trade and other receivables
Other financial assets
Other Assets
Cash and cash equivalents
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Reserves
Retained earnings
Total capital and reserves
Non current liabilities
Retirement benefit obligation
Deferred tax liabilities
Provisions
Total non current liabilities
0.92%
3.62%
0.00%
0.00%
0.03%
-
n/a
-1.51%
-3.68%
116.15%
-19.02%
-4.12%
-1.14%
0.00%
-23.43%
5.46%
-3.78%
1,200
163
70,080
29,300
-
1,200
120
69,657
-
-
1,200
120
69,678
-
1,464
6,497,062
6,258,103
6,327,112
1.10%
389,515
-32.37%
559,784
601,065
575,983
828,610
2,146,827
2,892,751
139,612
740,352
141,525
280,526
4,187,640
4,719,395
816,086
2,786,166
305,908
227,165
4,524,840
10,684,702
10,977,498
10,851,952
385,422
2,312,532
6,612,922
9,310,876
385,422
2,581,853
6,724,947
9,692,222
102,959
62,589
200,855
366,403
385,422
3,020,152
6,270,587
9,676,161
119,986
40,123
194,048
354,157
119,482
-0.42%
-
280,601
400,083
n/a
44.60%
12.97%
Page 66 of 94
Board of Directors’ Report 2017
0
1
2
3
4=(3-2)/2*100
Current liabilities
Trade and other payables
Current tax liabilities
Income in advance
Provisions
Other liabilities
Total current liabilities
Total liabilities
186,937
90,838
-
28,779
569,941
60,295
4,924
50,437
606,109
128,520
970
76,290
319,523
261,583
329,104
626,077
992,480
947,180
1,301,337
1,140,993
1,541,076
TOTAL EQUITY AND LIABILITIES
10,684,702
10,977,498
10,851,952
6.35%
113.15%
-80.30%
51.26%
25.81%
20.46%
18.42%
-1.14%
NON-CURRENT ASSETS
Other intangible assets
Other intangible assets increased by 3.62% (RON 14.4 million) further to investments in 2D
and 3D seismic and geochemistry due to the 5-year extension at the end of 2016 of the
petroleum concession agreement for exploration-development-production for eight blocks.
Deferred income tax
Deferred income tax is based on the temporary differences between the accounting value and
the fiscal value of balance sheet items. These temporary differences may be taxable, meaning
they will result in taxable values when determining the taxable result of future periods, or
deductible, meaning they will result in values that are deductible when determining the
taxable result of future periods. As a consequence of the increase of deductible temporary
differences generated by the increase of the decommissioning provision and asset write offs
from the exploration activity, which according to the effective fiscal code, will generate
deductions in the income tax calculation for the future periods, the Company recorded at the
end of 2017 a receivable related to the deferred tax.
CURRENT ASSETS
Inventories
Inventories decreased at the end of 2017 as compared to 2016 by 32.37% because of a gas
stock decrease due to higher gas volumes withdrawn from the storage as compared to the
previous year by 56.4% and due to 38.9% lower gas volumes injected in storages.
Other assets
Other assets increased in 2017 as compared to 2016 by 116.15% especially due to recording
the receivables for the excises on the technological consumption to be recovered from ANAF
further to finalising the fiscal inspection.
Cash and cash equivalent. Other financial assets
On December 31, 2017, cash and cash equivalent and other financial assets (bank deposits
and purchased state bonds) were of RON 3,013.33 million, as compared to RON 3,173.28
million at the end of 2016, the decrease being generated by distributing additional dividends
in 2017, besides the dividends for 2016.
CAPITAL AND RESERVES
Company’s equity decreased by 3.78% (RON 365.29 million) as compared to the end of
2016, due to distributing to shareholders as dividends the result of 2016 and part of the result
of the previous years, in compliance with the resolution of the general meeting of
shareholders. Additional dividends were distributed from Company reserves in 2017.
Page 67 of 94
Board of Directors’ Report 2017
NON-CURRENT LIABILITIES
Provisions
Long-term provisions increased by 44.64% in 2017 as compared to 2016, as a result of
increasing the provision for decommissioning wells that are going to be written off in the
future. This increase is due to the rise of estimated costs for abandoning wells.
CURRENT LIABILITIES
Trade payables and other payables
Trade payables and other payables increased on December 31, 2017 by 12.47% due to an
increased gas production in the last quarter of 2017 as compared to the similar period of 2016,
generating an increased petroleum royalty liability at the end of the year, and due to increase
of delivered gas volumes and to the increased income from gas sales, that led to higher debts
with the windfall tax obtained further to the price deregulation in the natural gas sector and
higher VAT debts.
Provisions
Short term provisions increased on December 31, 2017 by 51.26% due to the increase of the
well decommissioning provision, as stated above and of the provision for restoring land to its
agricultural use after decommissioning non-productive wells.
The Company did not issue bonds or other debt instruments in financial year 2017.
The statement of comprehensive income for the period January 1 – December 31, 2017, as
compared to the similar period of the years 2016 and 2015, is shown below:
Indicator
0
Revenue
Cost of commodities sold
Investment income
Other gains and losses
Changes in inventory of finished
goods and work in progress
Raw materials and consumables
used
Depreciation, amortization and
impairment
Year
2015
(thousand
RON)
1
Year
2016
(thousand
RON)
2
4,052,684
3,411,868
(40,228)
(49,878)
44,185
22,117
(318,903)
(468,218)
Year 2017
(thousand RON)
Variance
(2017/2016)
4=(3-2)/2*100
34.39%
22.49%
1.05%
-74.30%
3
4,585,189
(61,095)
22,349
(120,335)
138,181
20,963
(186,651)
n/a
(78,262)
(54,632)
(64,329)
17.75%
(793,598)
(311,012)
(548,869)
76.48%
Employee benefit expense
(511,647)
(498,114)
Finance cost
Exploration expense
Other expenses
Other income
Profit before tax
Income tax expense
Profit for the year
(20,302)
(18,275)
(42,395)
(253,348)
(562,883)
(18,624)
(137,083)
(1,040,670)
(881,923)
(1,090,647)
79,793
361,147
1,468,838
1,280,695
(274,533)
(256,116)
1,194,285
1,024,579
364,169
2,181,191
(326,443)
1,854,748
13.00%
1.91%
-45.89%
23.67%
0.84%
70.31%
27.46%
81.03%
Page 68 of 94
Board of Directors’ Report 2017
Revenue
In 2017, Romgaz recorded revenue of RON 4.59 billion compared to RON 3.41 billion
achieved in 2016.
The increase resides from a 32.6% rise of income from gas sales both from Romgaz
production and gas purchased to be resold and from partnerships, as well as further to the
increase of income from electricity sales (38%) and underground storage activities (46.44%)
Cost of Commodities Sold
In 2017, cost of commodities sold increased by 22.49%, due to an increase by 172.81% of the
cost of commodity gas sold, due to a quantity higher by 233% of commodity gas sold from
import and from internal production. Costs generated by negative unbalances on the
electricity balancing market decreased by 66.1%.
Other Gains and Losses
In 2017 the Company estimated a net loss of RON 120.33 million, lower by RON 348 million
as compared to the same period of the previous year, due to net losses from allowances for
doubtful debts with exceeded due date that are lower than in the previous year by RON 348.5
million. In 2017 there were recorded allowances for doubtful debts of RON 6 million.
Changes in Inventory
In 2017, Romgaz own gas quantities withdrawn from storages have been higher than the
injected ones, generating an unfavourable change in inventories (loss).
Raw Materials and Consumables Used
The cost of raw materials was higher in 2017 than in the previous year due to a higher
technological consumption generated by the production increase.
Depreciation, Amortization and Impairment
Depreciation, amortization and impairment of non-current assets, tangible and intangible
increased in 2017 by 76.48% compared to 2016 mainly due to impairment of fixed assets and
of exploration assets. 2017 recorded a net loss from these adjustments of RON 5.5 million, as
compared to a net gain of RON 216.9 million in 2016.
Employee benefit expense
The increase of employee benefit expenses by 13% compared to 2016 is due both to the
indexation of salaries to cover the inflation and granting incentive bonuses for remarkable
results, according to the human resource policy, as well as to the expenses with employees
participation to profit, awarded in compliance with the resolution of the general meeting of
shareholders on the distribution of the profit for 2016; the expense recorded in 2017 was
offset by releasing to income the provision set up in this respect at the end of 2016; the result
of the current year was not influenced by this expense.
Exploration expense
Exploration expenses recorded a decrease of 45.89% as compared to the previous year due to
a lower value of exploration projects that were relinquished in 2017.
Other expenses
In 2017, other expenses recorded an increase as compared to the previous year by 23.67%
reaching RON 1,090.65 million, as compared to RON 881.92 million in 2016. The increase of
this expense is mainly due to the increase of production and of gas quantities sold in the
Page 69 of 94
Board of Directors’ Report 2017
current year as compared to the previous year, leading to the increase of the windfall tax, a
higher petroleum royalty and higher expenses with the transmission of the delivered gas. A
positive effect on other expenses was the elimination of the tax on special constructions.
Other income
The fiscal inspection related to the excise on the technological consumption was finalised in
2017. The fiscal inspection team concluded that, with respect to the technological gas used for
maintaining the production capacity, storage, transmission and gas distribution, the Company
does not have to pay excises. Romgaz calculated, declared and paid excises worth RON 244
million for the technological consumption between 2010-2016, which is to be recovered by
the Company. By the issue of the final report for 2017 the Company recovered RON 113
million, by compensating debts with VAT and petroleum royalty, recorded on December 31,
2017.
Page 70 of 94
Board of Directors’ Report 2017
Statements of cash flows recorded in the period 2015 – 2017 are shown in the table below:
INDICATOR
1
Cash flow from operating activities
Net Profit for the year
Adjustments for:
Income tax expense
Interest expense
Unwinding of decommissioning provision
Interest revenue
Loss on disposal of non-current assets
Change in decommissioning provision recognized in profit or
loss, other than unwinding
Change in other provisions
Expenses for provisions for impairment of exploration assets
Exploration costs
Impairment of property, plant and equipment
Depreciation and amortization
Impairment of investments in associates
Impairment of other financial assets
Losses from disposal of other financial investments
Losses from trade receivables and other assets
Income from dismantling fixed assets
Write down allowance of inventory
Income from prescribed debts
Income from subsidies
Movements in working capital
(Increase)/Decrease in inventory
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in trade and other liabilities
Cash generated from operations
Interest paid
Income tax paid
Net cash generated by operating activities
Cash flows from investing activities
Investments in affiliated parts
Investments in subsidiaries
Payments for investment increase in associates
(Increase)/Decrease in other financial assets
Interest received
Proceeds from sale of non-current assets
Loan granted to associates
Loans reimbursed by the associates
Dividends received
Collection from sales of other financial investments
Acquisition of non-current assets
Acquisition of exploration assets
Proceeds from disposal of associates
Net cash used in financing activities
Cash flows from financing activities
Dividends paid
Subsidies received
Net cash used in financing activities
Net Increase/(Decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
*thousand RON*
2015
2
2016
3
2017
4
1,194,285
1,024,579
1,854,748
274,553
34
20,268
(44,185)
23,084
(19,724)
21,852
228,309
42,395
5,219
560,070
1,328
6,809
-
292,146
(2,232)
(4,576)
-
-
2,599,635
(162,187)
54,550
(15,202)
2,476,796
(34)
(346,021)
2,130,741
(753)
(1,200)
-
158,050
53,872
42
(726)
65
1,634
-
(357,281)
(555,423)
-
(701,720)
(1,214,925)
-
(1,214,925)
214,096
526,256
740,352
256,116
15
18,260
(22,117)
108,057
(5,941)
18,919
(173,701)
253,348
(43,228)
527,941
43
(1,554)
1,577
354,321
(1,287)
5,714
-
-
2,321,062
(21,646)
(583,600)
337,707
2,053,523
(15)
(309,125)
1,744,383
-
-
-
(720,480)
25,178
144
-
-
-
400
(296,511)
(172,178)
-
(1,163,447)
(1,040,762)
-
(1,040,762)
(459,826)
740,352
280,526
326,443
3
18,621
(22,349)
72,668
11,693
11,389
(17,711)
137,083
23,206
543,374
(12,462)
(21)
12,308
38,575
-
8,147
(610)
(150)
3,004,955
178,363
(180,283)
105,983
3,109,018
(3)
(309,956)
2,799,059
-
-
(144)
104,964
20,908
207
-
-
-
-
(478,404)
(280,659)
298
(632,830)
(2,220,003)
413
(2,219,590)
(53,361)
280,526
227,165
Page 71 of 94
Board of Directors’ Report 2017
Corporate governance accommodates continuously to the requirements of a modern
economy, to increasing globalization of social life and to investors and interested parties need
for information on companies business.
As a national company Romgaz has to comply with GEO No. 109 of November 30, 2011 on
public companies corporate governance, as amended and supplemented (the “Ordinance”),
approved by Law 111/2016 and Government Decision no. 772 of September 28, 2016 on
Methodological Norms for establishing the financial and nonfinancial performance criteria
and variable component of remuneration of Board members, or if applicable, of the
supervisory board members, and of managers and members of the directorate.
The Ordinance sets up a number of principles and provisions to ensure their application.
Principles included in the Ordinance are as follows:
Clear separation of authorities deriving from shareholder from those deriving
from directorship/managing of the company.
Principle of transparency, non-discrimination and equal treatment in the selection
process of Board members;
Principle of proportional representation in the Board of Directors;
Minority shareholders protection by observing transparency principles;
Transparency principle;
Principle of mandatory reporting to the GMS as prescribed by law.
Ordinance provisions are observed by the company, and are included in the Company’s
Articles of Incorporation, as amended and approved by the company’s shareholders in the
following resolutions no. 19 of October 18, 2013; no. 5 of July 30, 2014, no. 8 of October 29,
2015, no.9 of October 28, 2016 and no.4 of August 9, 2017 (latest update of the Articles of
Incorporation).
The updated Company’s Articles of Incorporation
www.romgaz.ro, at “Investor Relations – Corporate Governance - Reference Documents”.
is posted on
the webpage
Since November 12, 2013, Romgaz shares have been traded on the regulated market governed
by BVB, at category I, under the symbol “SNG”, as well as on the London Stock Exchange
(where GDRs are traded) under the symbol “SNGR”.
On January 5, 2015, after the Financial Supervisory Authority approved the proposals to
amend BVB’s regulations, Romgaz was admitted into the PREMIUM category of BVB
regulated market.
As issuer of securities traded on the regulated market, Romgaz has to fully comply with the
corporate governance standards provided by applicable national regulations, namely the
Corporate Governance Code of BVB, posted on the internet webpage www.bvb.ro, at
“Investor Relations – Regulations - BVB Regulation”.
The corporate Governance System was and will be continuously improved according to rules
and recommendations applicable to Companies listed on Bucharest Stock Exchange and on
London Stock Exchange.
Some of the already implemented measures include:
Page 72 of 94
Board of Directors’ Report 2017
Elaboration of a new Corporate Governance Code, in accordance with the new Corporate
Governance Code of BVB applicable since January 4, 2016 – the document was approved
by Romgaz Board of Directors by Resolution no.2/ January 28, 2016. The Corporate
Governance Code was updated and shall be submitted for approval of the Board of
Directors.
The Company’s Articles of Incorporation is posted on the webpage www.romgaz.ro, at
“Investor Relations – Corporate Governance – Reference Documents”.
Board of Directors approval and update of the Internal Rules for the advisory committees
during the meetings held on March 24, 2016 (for all committees) and March 23, 2017
(update of the Internal Rules of the Strategy Committee). All other Internal Rules of the
advisory committees were amended in 2017 to include the latest legal changes on
corporate governance (Law No. 111/2016 and GD No. 722/2016). The rules were updated
and are going to be submitted for approval of the Board of Directors.
Update of the Terms of Reference of the Board of Directors to include the latest legal
changes on corporate governance. The Terms of Reference were approved by the Board
of Directors on March 23, 2017 and update subsequently in January 2018;
Elaboration of internal regulation in compliance with the new Corporate Governance
Code of BVB.
Policy regarding Dividends and the Policy regarding Forecasts were approved by the
Board of Directors on March 23, 2017 and all other policies were update and are going to
be submitted for approval of the Board of Directors.
Other rules/policies were elaborated/updated by the members of the committees and of the
Board in 2017, such are going to be finalised and approved in the following period.
Include in the Board of Directors’ Report a chapter dedicated to corporate governance
referring, among others, to : the applicable Corporate Governance Code, the duties of the
executive management and of the three advisory committees of the Board of Directors
(Nomination and Remuneration Committee and Audit Committee and the Strategy
Committee), aspects related to remuneration of members of the Board and of managers,
measures to improve the corporate governance, aspects related to internal control and risk
management system and aspects related to social responsibility;
Include in the Board of Directors’ Report a section referring to compliance with the
provisions of BVB Corporate Governance Code (Annex 1);
Diversify communication ways with shareholders and investors by posting on the website
announcements addressed to market players, half year and quarterly financial statements,
annual reports, procedures to follow for access and participation to GMS, and by setting
up of an “Infoline” for shareholders/investors to respond to their requirements and/or
questions;
Establish a specialized department dedicated to investor and shareholder relations;
Conclusion of professional liability insurance for directors and managers and appointment
of a person to monitor such contracts;
Starting the procedures necessary for the adopting and implementing the National
Anticorruption Strategy. Therefore, a Commission has been established, responsible with
the implementation of the strategy provisions; the Director General has adopted the
Statement of Adherence to the National Anticorruption Strategy and Integrity Plan for
2017 and 2018, documents published on the internet website at “Investor Relations –
Corporate Governance – Transparency”.
Some of the measures to be implemented:
Page 73 of 94
Board of Directors’ Report 2017
Implement a remuneration policy for the executive management, with a fixed and
variable component that depends on the results of their evaluation. According to the
Corporate Governance Code of London Stock Exchange, long term bonus schemes
should be submitted for approval of the shareholders (GMS).
The shareholders structure is described in Chapter II “Romgaz at a glance”
Romgaz respects and protects the rights and legitimate interests of shareholders. The
Company undertakes all the necessary efforts to facilitate the exercitation of shareholders’
rights, under the law and in compliance with the Articles of Incorporation.
A separate document on rules and procedures of the general meeting of shareholders setting
the framework for Romgaz GMS is drafted and is going to be submitted for the approval of
the Board of Directors in the first months of 2018.
The General Meeting of Shareholders is called by the Board of Directors, whenever
necessary, in accordance with the legal provisions. The convening notices and the GMS
resolutions are sent to Bucharest Stock Exchange, London Stock Exchange and to the
Financial Supervisory Authority in compliance with the regulations of the capital market and
will be published on the company’s website at “Investor Relations – General Meeting of
Shareholders”.
The Ordinary General Meeting of Shareholders has the following main competencies:
a) to approve the company’s strategic objectives;
b) to discuss, approve or amend, as the case may be, the annual financial statements of
the company based on the reports submitted by the Board of Directors and the
financial auditor, and to set the dividends;
c) to discuss, approve or request, as the case may be, the addition or review of the
company’s management plan, under legal provisions.
d) to set the income and expenditure budget for the following financial year;
e) to appoint and to dismiss the Board members and to set their remuneration;
f) to make an opinion on the governance of the Board of Directors;
g) to appoint and to dismiss the financial auditor and to set the minimum term of the
financial audit contract;
h) to approve contracting bank loans, whose value exceeds, individually or cumulated
with other bank loans in progress over a financial year, EUR 100 million, equivalent
in RON;
i) approval of documents for establishing guarantees, other than guarantees for the
company’s non-current assets, with individual or cumulated value with other
established guarantees other than guarantees in progress for the company’s non-
current assets over a financial year of EUR 50 million, equivalent in RON.
The Extraordinary General Meeting of Shareholders has the following main competencies:
a) to change company’s legal form;
b) to move the headquarters;
c) to change the company’s scope of activity;
d) to incorporate and to conclude or amend incorporation documents of the companies
where Romgaz is managing partner;
e) to conclude or amend joint venture contracts where the company is contracting party;
Page 74 of 94
Board of Directors’ Report 2017
the anticipated winding up of the company;
to convert shares from a category into the other;
f) to increase the share capital;
g) to reduce the share capital or to restore it by issuing new shares;
h) to merge with other companies or to spin-off the company;
i)
j)
k) to convert one category of bonds into another one or in shares;
l)
m) to conclude the documents related to the acquisition of non-current assets whose value
exceeds, separately or cumulatively, during a financial year, 20% of the total non-
current assets of the company, except for receivables;
to issue bonds;
n) to conclude the documents related to disposal, exchange and set up of guaranties
referring to non-current assets whose value exceeds, separately or cumulatively,
during a financial year, 20% of the total non-current assets, except for receivables;
o) to conclude the documents related to rental for a period longer than 1 (one) year of
tangible assets to the same contractors or to persons involved or acting together,
whose value exceeds, separately or cumulatively, 20% of the total tangible assets,
except for receivables at the document conclusion date;
p) any other change in the articles of incorporation or any other resolution that requires
the approval of the extraordinary general meeting of shareholders.
Romgaz is a joint-stock company governed under an one-tier system.
The Board of Directors consists of 7 (seven) directors elected by the general meeting of
shareholders, in compliance with legal applicable provisions and the provisions of the Articles
of Incorporation, one of its members is appointed Chairman of the Board.
Board of Directors composition observes the legal criteria/conditions on the share of non-
executive and independent directors, the studies and competencies, experience and gender
diversity (criteria detailed in the Board of Directors Terms of Reference).
Board of Directors composition on December 31, 2017 is presented in Chapter VI “Company
management”. According to the independency declarations sent to the company, five directors
have declared to be independent and one as non-independent. Independence of Board
members is determined based on criteria detailed in Romgaz Corporate Governance Code
(art.6).
Aspects on directors’ rights, obligations and competencies, as well as aspects related to Board
meetings are detailed in the Articles of Incorporation and in the Board of Directors Terms of
Reference.
Until December 31, 2017 the Board of Directors did not make a self- assessment for 2017.
In its activity, the Board of Directors is supported by three advisory committees, namely: the
nomination and remuneration committee, the audit committee and the strategy committee.
The Audit Committee has legal competencies provided in Article 65 of Law No. 162/21078
consisting mainly in monitoring the financial reporting process, the internal control systems,
the internal audit and risk management systems within the company, as well as in controlling
the statutory audit activity related to annual financial statements and managing the
relationship with the external auditor.
8 Law No. 162 of July 15, 2017 on the statutory audit of annual financial statements and of annual consolidated
financial statements and of amending pieces of legislation
Page 75 of 94
Board of Directors’ Report 2017
The Nomination and Remuneration committee has, basically, the competence to set the
procedures for selecting the candidates for the director and manager positions, and to make
proposals for the director’s position and to get involved in the selection and recruitment
procedure or managers, and to make proposals on their remunerations. The committee has
also the obligation to elaborate during the financial year an annual report on the remuneration
and other benefits awarded to directors and managers.
The main scope of the strategy committee is to coordinate drafting/update and monitoring of
the company’s development strategies, correlated with the national and European energy
strategy, to analyse the implementation of such strategies and the measures needed to reach
the objectives set, to monitor the business diversification projects by achieving investments.
The detailed presentation of attributions and responsibilities of each committee may be found
in their respective Internal Rules published on the company’s webpage www.romgaz.ro at
“Investor Relations – Corporate Governance – Reference Documents”.
On December 31, 2017, the advisory committees’ structure was the following:
I) Nomination and Remuneration Committee:
Cermonea Daniel Ioan (chairman)
Nistoran Dorin Liviu
Baciu Sorana Rodica
Grigorescu Remus
II) Audit Committee
Baciu Sorana Rodica (chairman)
Grigorescu Remus
Ceremonea Daniel Ioan
Ciobanu Romeo Cristian
III) Strategy Committee
Grigorescu Remus (chairman)
Nistoran Dorin Liviu
Baciu Sorana Rodica
Information regarding the Board of Directors’ meetings and the Advisory Committees during
2017
During 2017, the Board of Directors held a number of 27 meetings, in compliance with the
legal and statutory provisions, out of which:
15 effective meetings of the directors and
12 conference-call meetings.
The attendance at the Board of Directors’ meetings:
First name and last name
Number of meetings
during the mandate
Chisăliţă Dumitru
8
P
A
NP
no.
8
%
100.0
no.
%
no.
%
Page 76 of 94
Board of Directors’ Report 2017
Negruţ Aurora
Jude Aristotel Marius
Stoicescu Florin Răzvan
Jansen Petrus Antonius Maria
Tcaciuc Sebastian Gabriel
Buzatu Florin Dănuţ
Chirilă Alexandru
Stan Bogdan Nicolae
Gheorghe Gheorghe Gabriel
Metea Virgil Marius
Baciu Sorana Rodica
Nistoran Dan Liviu
Ciobanu Romeo Cristian
Cermonea Daniel Ioan
Grigorescu Remus
Volintiru Adrian Constantin
Anghel Daniel Florin
where:
P = participate
A = power of attorney
NP = did not participate
8
8
8
18
16
18
10
14
13
10
11
9
9
9
9
2
2
1
1
1
1
1
12.5
12.5
5.6
5.6
10.0
1
1
1
2
1
2
12.5
12.5
12.5
11.1
6.25
11.1
9
64.3
2
18.2
2
1
22.2
11.1
7
6
6
15
15
15
9
5
13
10
9
9
7
8
9
2
2
87.5
75.0
75.0
83.3
93.75
83.3
90.0
35.7
100.0
100.0
81.8
100.0
77.8
88.9
100.0
100.0
100.0
Attendance at Advisory Committees’ meetings:
Nomination and Remuneration Committee: 11 meetings
First name and last name
Tcaciuc Sebastian Gabriel
Negruţ Aurora
Jansen Peter Antonius Maria
Stoicescu Răzvan Florin
Buzatu Florin Dănuţ
Chirilă Alexandru
Gheorghe Gheorghe Gabriel
Nistoran Dorin Liviu
Stan Bogdan
Cermonea Ioan Daniel
Grigorescu Remus
physical attendance
7
3
5
3
5
3
5
4
1
4
3
Audit committee: 4 meetings
First name and last name
Jansen Peter Antonius Maria
Tcaciuc Sebastian Gabriel
Jude Marius Aristotel
Buzatu Florin Dănuţ
Stoicescu Răzvan Florin
Baciu Sorana Rodica
Ciobanu Romeo Cristian
physical attendance
1
1
1
1
1
3
3
Page 77 of 94
Board of Directors’ Report 2017
Grigorescu Remus
Cermonea Ioan Daniel
3
2
Strategy Committee: 2 meetings
First name and last name
Negruț Aurora
Chisăliță Dumitru
Tcaciuc Sebastian Gabriel
Jude Marius Aristotel
Buzatu Florin Dănuţ
physical attendance
2
2
1
2
1
In compliance with the company’s Articles of Incorporation “the Board of Directors shall
assign, totally or part of, the management competences of the Company to one or more
managers, appointing one of them as Director General” Article 24, paragraph (1), “manager”
meaning “the person to whom the Board of Directors delegated authority to manage the
company” Article 24, paragraph (12).
Mr. Metea Virgil Marius acted as Director General between January 1 – December 14, 2017
having the following responsibilities and duties delegated by the Board of Directors:
A. Responsibilities and duties related to internal management:
approves the organization and functioning chart;
approves the Organization and Functioning Regulations as well as other internal
documents regulating the activity of the company related to its employees;
approves the employment, promotion and dismissal of employees;
approves the responsibilities and duties of the employees;
approves the disciplinary reward and sanction of the employees;
approves the specific operations necessary and useful for achieving the scope of
activity;
fulfils any accessory duties, namely any acts and special operations necessary and
useful for achieving the above mentioned duties ;
B. Responsibilities and duties related to the representation of the company:
represents the company when concluding/issuing legal documents;
represents the company in pre-contractual, administrative and/legal procedures;
fulfills any accessory duties, namely any acts and special operations necessary and
useful for achieving the above mentioned duties.
Starting with December 14, 2017 the interim Director General is Mr. Cindrea Corin Emil,
being delegated a series of competencies related to company management.
The Director General must periodically inform the Board of Directors on the manner of
achieving the assigned duties, as well as the right to request and to obtain instructions on the
manner of exercising the assigned duties.
Page 78 of 94
Board of Directors’ Report 2017
Internal audit activity is organised and conducted in compliance with:
Law 672/2002 on the internal public audit;
Own methodological norms, issued under GD No. 1086/2013 on approving the
General Norms on exercising the internal public audit;
Order of the Ministry of Public Finances No. 252/2004, Code of ethics of the internal
auditor, as subsequently amended and supplemented;
SNGN Romgaz SA Corporate Governance Code:
SNGN Romgaz SA Internal Audit Charter.
Romgaz sets and keeps the internal audit activity operational, being performed independently
from other functions and activities. According to the effective laws, the Internal Audit
Department is directly subordinated to the Director General, but reports to the Board of
Directors through the Audit Committee.
Internal auditing mission, attributions and responsibilities are defined in the Internal Audit
Charter approved by the Director General. The charter sets the position of the internal audit
within the company, sets the manner for accessing company’s documents in order to duly
fulfil audit missions and defines their scope of activity.
Internal auditing is conducted permanently in order to provide an independent evaluation of
operations, control and its management processes, evaluates the potential risk exposure of
various business segments (asset security, compliance with laws and contracts, integrity of
operational and financial information etc.) makes recommendation for improving the systems,
controls and procedures to ensure efficiency of operations and observes the proposed
corrective actions and the results.
Internal auditing is conducted as follows:
Evaluate the management and internal control systems – system audit;
Evaluate results of the monitored objectives and examine the effective impact –
performance audit;
Ensure conformity of procedures and operations with legal requirements – regularity
audit.
The internal audit activity was performed in 2017 according to the audit plan prepared based
on the risk analysis related to auditable activities of the company within their scope of
activity. The audit plan and the resources necessary for performing the activity were endorsed
by the Audit Committee and approved by the Director General, aiming to include the
company’s activities and operations that fall within the audit’s scope of activity. Internal
auditing activity is independent and objective ensuring the company on the control of the
operations, being conducted according to approved procedures. Each audit mission has a
detailed program comprising the applicability area, objectives, resources allocated thereto and
the term.
Objectives of the internal audit are supporting the company in identifying and evaluating
significant risks in order to provide an independent evaluation of risk management, of control
and management processes and supporting the company in maintaining an efficient and
effective control system.
The main activities and operations of the company that underwent an internal audit in 2017
were:
Production and production management;
Investments and project management;
Page 79 of 94
Board of Directors’ Report 2017
Analysis of the progress on conformity with BVB Corporate Governance Code
according to the “Comply or Explain” Statement.
The internal auditor reports to the Director General and to the Audit Committee on the scope
of the audit activity, its results, conclusions, recommendations and proposals made. Activities
and operations performed by the company in 2017 that were audited, can be considered as
compliant with the company’s policies, programs and management, with the legal provisions
and internal rules. No significant situations were identified to require a Form for findings and
irregularities reporting (F.C.R.I.9).
Company’s Policies and Objectives related to Risk Management
In accordance with the Corporate Governance Code, one important role played by the
company’s management is to ensure that an efficient risk management system is in place.
One major concern of the management is to raise the awareness on the objectives of the risk
management process, the necessity of direct implication in the risk management process, as
well as the alignment to the latest practices in the sector by complying with the effective laws,
standards and norms related to such process.
The company’s risk management system is implemented in accordance with:
the Order of the Ministry of Public Finances no. 400 of June 12, 2015 for approval of
the Internal / Management Control Code
Government Ordinance no.119/1999 (Article 4) on the internal control and the
preventive financial control;
Law no. 234 of December 7, 2010 amending and supplementing Government
Ordinance no. 119/1999,
International Standard ISO 31010:2009: “Risk management – risk assessment
techniques”;
International Standard
ISO 31000:2009: “Risk management/Principles and
guidelines”;
Romanian Standard SR Guidelines 73:2009: “Risk management-Vocabulary”.
Consequently, in compliance with the risk management process, the company systematically
analyses, at least once a year, the risks related to its objectives and activities and prepares
adequate remedy plans in order to mitigate the possible consequences of such risks, and
appoints employees responsible for implementing those plans.
Moreover, the risk management system implemented within the company is an integral part of
the decision making process by setting the requirement to use a risk management analysis
when drafting any and every complex document (technical projects, execution projects,
reservoir studies).
The main benefit of the risk management process is the improvement of the company’s
performance by identifying, analysing, assessing and managing all risks within the company,
in order to minimize the negative risk consequences or to increase the positive risk
consequences, as the case may be.
9 F.C.R.I - Form for findings and irregularities reporting
Page 80 of 94
Board of Directors’ Report 2017
A risk management department has been established for an efficient assessment of the
company’s risks. One major task of this department is drafting the company’s final documents
in terms of risk management: Final Risk Register, Final Risk Report, Final Measure
Implementation Plan and the Company’s Risk Profile.
Three role levels are set up in the risk management system:
base level, represented by those who identify risks and by the risk managers (head of
each organizational unit) who are responsible for preparing risk management
documents related to the level of the unit they manage;
middle level, represented by the company’s middle management, who together with
the heads of the organizational units form the Risk Management Commission that
respective
facilitates and coordinates
direction/department/division;
the management process within
the
high level, represented by the executive upper management through the Risk Analysis
and Management Commission that approves the company’s risk appetite and risk
profile in accordance with its objectives.
General scope of the risk management activity:
1. setting the general uniform framework for risks identification, analysis and
management;
2. providing the appropriate tool for a controlled and efficient risk management;
3. describing the manner in which control measures are set and implemented in order to
prevent the occurrence of negative risks.
Some of the analysed risk categories are: financial risks, market risks, occupational health and
safety risks, personnel risks, risks related to information systems, and legal and regulatory
risks.
All risks are analysed from following perspectives:
specific objective the risk refers to;
causes of risk occurrence;
consequences further to risk materialization;
occurrence probabilities;
risk materialization impact;
risk exposure;
risk response strategy;
recommended control (remedy) measures;
residual risks remaining after treatment of initial risks.
Internal control
In Romgaz, the internal control system operates in a control environment in a continuous
change that requires the adjustment of control at the level of every activity, differentially and
integrative, established in relation to the company’s interests.
The internal control has to be perceived as a management function and it is the manager’s and
each employer’s task to organise and to ensure functioning of the internal management
Page 81 of 94
Board of Directors’ Report 2017
control system so as to observe the general frame set by legal provisions and to be adapted to
the company’s specificity.
Internal control is a process carried out by the personnel at all levels: board of directors,
executive management, entire personnel, respectively. It is carried out by the top management
and bottom management, such as compartments responsible and the other employees as well.
Each member of the company is responsible with his internal control.
The control system developed and implemented in Romgaz, as part of the management
process, targets all the activities of the organizational units, at all levels of management, and
aims to achieve the objectives under the condition of risk identification and management
related to such.
The internal management control has to ensure the following:
- compliance with the law in force;
- applying the management resolutions;
- a good functioning of internal activity;
- efficiency of operations;
- efficient use of resources;
- prevention and control of risks of non-fulfilment of set objectives.
Repealing Ministry of Public Finance Order 946/200510 and entering into force of SGG Order
no 400/201511 in June 2015 supplemented by SGG Order no. 200/201612 generated a new
conceptualization of the main internal control directions in Romgaz aiming at creating a
tighter and more coherent bond with the other management control instruments – internal
audit and risk management system, and internal audit and risk management system, and to
establish a reporting and monitoring system for the Board of Director through its Audit
Committee for monitoring such activity.
The internal/management control system developed and implemented in Romgaz targets the
achievement of the following objectives:
compliance with legal regulation, with internal rules, with contracts and administrative
and jurisdictional decisions applicable to the company’s activity;
fulfilling Romgaz objectives under efficiency, economy and efficiency conditions;
protect Romgaz patrimony against losses due to errors, waste of money, fraud or
abuse;
development and maintenance of collection, storage, processing, updating and
distribution of financial and management data and information, as well as of proper
systems/procedures to inform the public.
Drafting, implementation, development and assessment of internal/management control
system for Romgaz are achieved in compliance with the provisions set in Government
10 Public Finance Ministry Order no. 946 as of July 4, 2005 for the approval of Internal Control Code comprising
internal/management control standards at public entities and for the development of internal/management
systems;
11 Government General Secretary Order No. 400/2015 for the approval of internal/management control systems
of public entities;
12 Government General Secretary Order No. 200 of February 26/2016 on amending and supplementing
Government General Secretary Order No. 400 of June 12/2015 for the approval of internal/management control
systems of public entities;
Page 82 of 94
Board of Directors’ Report 2017
Ordinance No. 119/199913 and with the standards provided by Order SGG No. 400/2015,
supplemented with Order SGG No. 200/201614 grouped in five main categories:
Category
Control environment
Risk management and
performance
Control activities
Main aspects
Company organization, human resources management, ethics principles and
rules, deontology and integrity
Applicable to all of the company’s processes and activities, targets how
objectives were set, sets risk identification methods and risk management,
planning
(governing plan and
(multiannual planning),
management plan) and performance monitoring
scheduling
Internal procedures are documented and drafted in relation to the main
processes so that the initiation and verification functions separation is
maintained in order to mitigate error and fraud risk, and in relation to
operation continuity by means of continuous supervision and management of
deviations from set procedures
Information and communication Targets the creation and development of a flexible and rapid information
information quality and usage of proper
system
communication methods and channels
type.
Development of reporting system for the implementation of the governing
and management plan, entity budget, management of resources use and
document.
to ensure both
information
for each
Evaluation and audit
Drafting and implementation of policies, plans and schedules for the
development of internal/management control in terms of perfecting such by
the assessment of the implementation carried out by the internal audit
compartment
Among the 2017 internal/management control system development/improvement actions we
specify the following:
Romgaz adherence to the principles and fundamental values promoted by the National
Anticorruption Strategy 2016-2020 – elaborate the Integrity Plan no. 70/24.02.2017
posted on the website - correlated with the Development Program of the Internal
Management Control for 2017;
Consulting all employees to identify vulnerabilities to corruption by using a
questionnaire drafted by the Commission responsible for implementing the National
Anticorruption Strategy, according to report no. 7592/14.03.2017.
Identify sensitive positions and other positions considered to be exposed, especially to
corruption and review the list of employees occupying such positions, the procedure
being approved by the Director General in report no. 10815/12.04.2017 – correlated
with the National Anticorruption Strategy 2016-2020 and the requirements of
Standard 1 “Ethics, integrity” and Standard 2 “Attributions, positions and tasks”
provided by Order no. 400/2015, supplemented by Order no. 200/2016;
The project on listing the vulnerabilities to corruption specific for company’s activities
was submitted for review and endorsed by the Commission for monitoring the internal
management system according to Protocol no. 29190/12.10.2017;
13 Government Ordinance no. 119 as of August 31, 1999 regarding internal control and preventive financial
control
14Government General Secretary Order No. 200/ February 26, 2016 regarding the amendment and
supplementation of
the approval of
internal/management control systems of public entities;
Government General Secretary Order No. 400/2015
for
Page 83 of 94
Board of Directors’ Report 2017
Prepare by the end of 2017 the “List with sensitive positions and/or exposed positions
specially to corruption and the list with the persons occupying such positions;
Review the Internal Rules according to the Decision of the Director General no.
259/21.01.2017 – amended and/or supplemented articles – “privileged information”;
Disseminate informative documents in order to raise awareness and anticorruption
education of all employees and correlated by enhanced activities for implementing the
internal management system to all managers and heads of departments. PowerPoint
presentations were send by email on September 28, 2017;
Update procedure PS-06 Communication and Instruction 00IL-061 External
information Communication – correlated with Standard 12 “Information and
Communication” provided by Order no. 400/2015, supplemented by Order no.
200/2016;
Update instruction 00IL-011 Document archiving, correlated with Standard 13
“Document management” provided by Order no.400/2015, supplemented by Order
no.200/2016;
Training project to improve risk management, therefrom two activity fields were
selected, namely trading and purchase/investments. This project was initiated in July
2017 and is in progress;
Draft and update Romgaz Risk Register.
According to the self-assessment results for the implementation of Internal/Management
Control System, in 2017 (in relation to the 16 internal/management control standards provided
in Order no. 400/2015, supplemented by Order no.200/2016), the Internal/Management
Control System is partially implemented.
In order to increase the quality of the internal control activity and the performance of
management act as regards the use of public resources, the following are recommended:
increase the managers responsibility as regards the organization of internal control
and implementation of control findings;
supervising the systematic update of the procedures in terms of legal changes and
risks evolution;
coordinating the internal control system of the company with the risk management
supporting
the management
in
implementation of
the
internal auditors
recommendations
ensuring the consultancy requested by the management.
Romgaz’s Code of Conduct was prepared first in 2013.
The periodical reports on the indicators relevant for compliance with the rules of conduct
have been prepared by the person responsible with monitoring the compliance of the Code of
Conduct and have been posted on the intranet webpage of the Company.
Subsequently, considering the need to comply with the legal requirements on corporate
governance, internal control and National Anticorruption Strategy, the company’s executive
management updated in 2017 the Code of Conduct. The updated document – SNGN Romgaz
Page 84 of 94
Board of Directors’ Report 2017
SA Ethics and Integrity Code – was approved by the Director General in February 2018 and
has to be ratified by the Board of Directors.
The most important amendments/supplements of this Ethics and Integrity Code are the
following: conflict of interests, trade of company’s shares, compliance with laws on
competition, integrity insurance and preventing corruption deeds, prevention and reporting
frauds, money laundry etc.
Romgaz activities in the field of social responsibility are performed voluntarily, beyond the
legal responsibilities, the company being aware of its role in society.
Social responsibility means for Romgaz a business culture including business ethics, customer
rights, economic and social equity, environmental friendly technologies, fair treatment of
workforce, transparent relationship with the public authorities, moral integrity and investment
in the community.
Moreover, Romgaz supports a sustainable development of the society and community,
through financial support/ total or partial sponsorship for some actions and initiatives in the
following main domains: education, social, sport, health and environment.
Granting financial support/partial or total sponsorship for actions and initiatives, within the
budgeted limits, Romgaz has shown a pro-active attitude of social responsibility and increased
the awareness of the parties involved as regards to the importance and benefits of social
responsibility actions.
In 2017, Romgaz supported, totally or partially, actions and initiatives stipulated in
Government Emergency Ordinance (“GEO”) no.2/2015, complying with the budget, as
follows:
Expenses/activities
Total of sponsorship expenses, out of which
Expenses with sponsorships in medical and health domains - Article.XIV letter.a)
Expenses with sponsorships in education and sport domains – Article XIV letter.b) –
total, out of which:
For Sports Clubs
Sponsorships for other actions and activities - Article.XIV letter.c)
Achieved (RON)
7,731,870
2,589,632
3,884,848
3,450,920
1,257,390
The detailed description of the projects as regards the sponsorship provided in GEO
no.2/2015 is included in the Annual Report on Social Responsibility and Patronage for 2017
published on www.romgaz.ro at “Investor Relations - Corporate Governance - Social
Responsibility”.
The projects carried out in 2017 had besides the positive impact on the environment and
community, an important benefit for the company by inspiring the organisational culture and
the goodwill being a responsible employer, and also an involved social partner, promotor of a
transparent and open relationship. This is positively reflected in Romgaz image, domestically
and internationally, both for investors, central and local authorities and for other stakeholders.
When supporting/performing projects, actions, social responsibility initiatives, Romgaz took
into consideration the provisions of Sponsorship Policy and Sponsorship Guide applicable in
2017, published on the company’s website at Social Responsibility.
(https://www.romgaz.ro/en/content/social-responsibility-0 )
Page 85 of 94
Board of Directors’ Report 2017
Legal Framework
The politics and remuneration criteria of the executive and non-executive members of the
Board of Directors are based on the following norms:
Law no. 31/1990 on trading companies, as subsequently amended and supplemented;
GEO no. 109/2011 on corporate governance of public enterprises, as subsequently
amended and supplemented, approved by Law no.111/2016;
The company’s Articles of Incorporation, approved by the Extraordinary General
Meeting of Shareholders no. 9/October 28, 2016 and no.4/ August 9, 2017 (last
update of the Articles of Incorporation);
Resolution no. 14/August 26, 2013 of the Ordinary General Meeting of Shareholders
which established the general limits of the remuneration of the director general,
executive member of the Board of Directors;
Resolution no. 29/December 16, 2013 of the Board of Directors approving the
Mandate Contract of the Director General;
OGMS Resolutions no. 12/26.07.2013 and no. 13/30.12.2016 approving the Director
Agreements for Board members;
Resolution no.14/07.06.2017 on the 4 year renewal of the Director General Contract of
Mandate;
Resolution no.35/14.12.2017 approving the contract of mandate that is going to be
concluded with the Chief Financial Officer.
For compliance with the Requirements of BVB Corporate Governance Code and GEO no.
109/2011, Romgaz drafted the Policy on remuneration which shall be submitted for approval
of the Board of Directors.
The structure of the remuneration granted to non-executive directors
The fixed monthly remuneration as well as the variable one were established according to
applicable legal provisions (detailed in the 2017Annual Report on remunerations and other
benefits granted to SNGN Romgaz SA directors and managers ) and provided in the Director
Agreement of each directors, as approved by the applicable GMS resolution.
The following criteria are relevant for the fixed remuneration for 2017:
The Chairman and Board members who are at least on two (2) advisory committees
benefit from a fixed maximum monthly remuneration;
Board members who are at least on one (1) advisory committee benefitted from a
monthly fixed allowance of 90% of the fixed maximum monthly remuneration;
Board members who do not belong to any advisory committee benefit from a fixed
monthly remuneration representing 85% of the fixed maximum monthly allowance.
The following criteria are relevant for the variable remuneration for 2017:
Page 86 of 94
Board of Directors’ Report 2017
Part of the directors that carried on activities in 2017 received strictly a fixed
allowance, while another part received remuneration also;
Variable remuneration was set depending on the achievement of objectives, namely
fulfilment of the performance indicators target value, that were set in the director
agreement and approved by the GMS in 2013 Governing Plan;
The value of the variable remuneration of non-executive board members did not
exceed the value of 12 monthly fixed remunerations.
The variable remuneration is made up of two (2) components, a first component depending on
the fulfilment of performance indicators determined quarterly, by considering the share of
each indicator and the variation from the target level, and the second one depends on the
exceeding value by a percentage higher than 0.4% of the achieved net profit as compared to
the one approved in the company’s income and expenditure budget, namely the amount
representing the difference between the actual achieved net profit and the estimated net profit
for every financial year, but not higher than the value of the annual fixed allowance.
The structure of the remuneration granted to the executive director, namely Director
General
While acting as executive member of the Board of Directors, the Director General concluded
both a director agreement for the membership in the Board and a contract of mandate for the
position as Director General. The Director General was entitled strictly to payment of the
remuneration according to the contract of mandate.
The structure of the remuneration granted to managers
The monthly fixed remuneration, as well as the variable remuneration were granted under the
legal applicable provisions (detailed in the Annual Report on remunerations and other benefits
granted to SNGN Romgaz SA directors and managers), such being provided in the Contract
of mandate of each manager, approved by Board resolutions.
As regards solely the Director General the variable remuneration was granted considering the
fulfilment of objectives and performance indicators. In 2017 the interim Director General and
the Chief Financial Officer did not benefit from the variable remuneration.
2017, that will be public on the company’s website by the end of June 2018, according to the
Order of the Ministry for Public Finances no. 2844/201615 (chapter 7, item 42, para (1)).
Romgaz prepares a separate report for financial year
15 Order of the Ministry of Public Finances no.2844 of December 12, 2016 on approving Accounting
Regulations compliant with the International Financial Reporting Standards
Page 87 of 94
Board of Directors’ Report 2017
The timeline of the directors agreements, the contract of mandate, the Governing Plan and the
Management Plan is the following:
June 12, 2013 – The Board of Directors’ Resolution no. 8 approves the appointment of
“Mr. Virgil Marius Metea as executive director - Director General”;
July 26, 2013 – GSM Resolution no. 12 approves the Director Agreement to be concluded
with the members of the Board of Directors;
September 25, 2013 – GSM Resolution no. 16 approves the Governing Plan 2013-2017
prepared and presented by the Board of Directors;
December 16, 2013 – Board’s Resolution no. 29 approves the Contract of Mandate
between Romgaz and Mr. Virgil Marius Metea as executive director-Director General.
January 29, 2014 – Board’s Resolution no. 1 approves the “Management Plan of
Romgaz’s Director General over the mandate contract’s term i.e. 2013-2017”.
November 15, 2016 - By Resolution no.10, the Board of Directors revoked Mr. Virgil
Marius Metea from the position of executive director.
December 30, 2016 – by Resolution no.13, the General Meeting of Shareholders
approved the Directors Agreement which shall be concluded with the new members of the
Board of Directors.
April 25, 2017 – GMS Resolution no.1 appointed as interim directors: Mr. Stan Bogdan
Nicolae, Mr. Chirila Alexandru, Mr. Gheorghe Gheorghe Gabriel and Mr. Metea Virgil
Marius and approved the director agreement;
June 7, 2017 – Board’s Resolution no. 14 decided upon the renewal of the Director
General contract of mandate – Mr. Metea Virgil Marius ;
September 7, 2017 – GMS Resolution no.5 appointed as interim directors: Mr. Gheorghe
Gheorghe Gabriel, Mr. Stan Bogdan Nicolae, Mr. Ciobanu Romeo Cristian, Mr. Nistoran
Dorin Liviu, Mr. Ceremonea Ioan Daniel, Mr. Grigorescu Remus and Mrs. Baciu Sorana
Rodica and approves the director agreement;
November 2, 2017 – Board’s Resolution no.30 appointed Mr. Bobar Andrei as Chief
Financial Officer. The contract of mandate was concluded for 4 months, starting with
November 2, 2017, it will be automatically extended for successive periods of 4 months
until the appointment of a Board of Directors, whose members will be selected in
compliance with GEO no. 109/2011. Thereafter the Board of Directors will set the
performance indicators and objectives based on the Management Plan, as well as the term
of the mandate.
December 14, 2017 – Board’s Resolution no.35 approved the contract of mandate to be
concluded with the Chief Financial Officer, appointed by Resolution no.30 of November
2, 2017;
December 14, 2017 – Board’s Resolution no.36 revoked the mandate of Mr. Metea Virgil
Marius as director general;
December 14, 2017 – Board’s Resolution no.37 appointed Mr. Cindrea Corin Emil as
interim director general for a 4 month term, with the possibility to be extended up to
maximum 6 months.
Page 88 of 94
Board of Directors’ Report 2017
“SNGN Romgaz SA Governing Plan for 2013-2017” was approved by Resolution no. 16 of
September 25, 2013 of the General Meeting of Shareholders.
“The Contract of Mandate of SNGN Romgaz SA Director General” was approved by the
Board of Directors Resolution no.29 of December 16, 2013 and became effective “starting
with June 17, 2013” according to the same resolution. The contract of mandate was
concluded for a 4 year term.
“The Management Plan for the term of SNGN Romgaz SA Director General mandate,
namely for 2013-2017” – was approved by the Board of Directors Resolution no.1 of January
29, 2014.
The Management Plan encloses the vision of the Director General for the fulfilment of the
strategic objectives as provided in the Governing Plan and the achievement of performance
criteria and objectives.
Therefore, the performance criteria and objectives set in the Director Agreement are
performance criteria and objectives of the director general activity.
The main performance objectives provided in the director agreement and in the management
contract may be summarized as follows:
Increasing the company’s gas resources and gas reserves portfolio by discovering new
resources and by developing and improving the recovery degree of already discovered
resources;
Consolidating the company’s position on the electricity supply market;
Optimizing, developing and diversifying the underground storage activity by
reconsidering its importance for ensuring safety, continuity and flexibility in supplying
natural gas;
Increasing the company’s performance;
Identifying of new growth and diversification opportunities;
Improving the company’s organization structure, including the reorganization of the
internal audit function.
Besides the specific measures for fulfilling each objective, the company proposed to
implement general measures that will also contribute to the fulfilment of the company’s
strategic objectives, in the following areas:
Human resources management;
Corporate governance and social responsibility;
Optimization of budgeting and control process;
Improving the company’s image;
Implementation of legal provisions on legal separation of UGS activity;
Developing the role of the company’s risk management.
The measures and actions for the fulfilment of strategic objectives, as set in the Governing
Plan, are monitored periodically, quarterly and annually by the following indicators and
performance criteria:
Page 89 of 94
Board of Directors’ Report 2017
No.
0
1. EBITDA
2. Revenue
Indicator
M.U.
1
2
thousand
RON
thousand
RON
Performance
criterion
Indicator
Weighting
coefficient
3
4
increasing
4.50%/year
5
0.25
increasing
6%/ year
0.20
3. Labour productivity
RON/person
increasing
6%/ year
4. OPEX
to RON 1000
(op.
operating
income
expense/op. income)
RON
decreasing
0.60%/ year
5. Geological resources
million m3
increasing
1%/ year
6. Natural gas production
%
keeping stable
1.5%/ year
decline
7. Outstanding payments
thousand
RON
keeping stable
0
0.10
0.10
0.10
0.15
0.10
With the expiration of the 4 year director agreements of directors appointed by the General
Meeting of Shareholders in 2013, interim directors were successively appointed, they have no
performance indicators and criteria included in the director agreements approved by the GMS.
The Board of Directors approved by Resolution no.14 of June 7, 2017 besides the renewal of
Mr. Metea Virgil Marius contract of mandate as – Director General, also the modification of
the performance indicators’ value for 2017 as those approved by the GMS in the income and
expenditure budget.
The Board of Directors revoked by Resolution no.36 of December 14, 2016 the director
general mandate of Mr. Metea Virgil Marius.
The Board appoints by resolution no.37 of December 14, 2017 Mr. Cindrea Corin Emil as
interim director general for a 4 month term, with the possibility to be extended up to
maximum 6 months.
The contract of mandate concluded by the Director General with the Board included no
performance indicators and criteria.
Likewise, the contract of mandate concluded by the Chief Financial Officer Mr. Bobar Andrei
with the Board included no performance indicators and criteria. These will be set in an
addendum by the Board of Directors that will be appointed further to the selection procedure
compliant with GEO no.109/2011, based on the management plan.
Page 90 of 94
Board of Directors’ Report 2017
The achievement of performance indicators and criteria of directors who had such included in
their director agreements and whose contracts expired in 2017 are shown in the table below:
9 months 2017
Weighting
factor
Indicator
2
3
Average
values 9
months
2014-
2016
4
Target
values
Achieved
values
Achievement
rate
Weight
1
EBITDA
CA
W
Cexpl/Vexpl
RES
dQ
Pres
Total
EBITDA
CA
W
Cexpl/Vexpl
RES
dQ
Pres
5
6
7=6/5x100
0.25
0.20
0.10
0.10
0.10
0.15
0.10
1.00
+4.5% 1,908,812.5 1,994,709.1 1,826,043.5
+6% 2,873,798.6 3,046,226.5 3,241,648.5
535.5
+6%
582.8
-0.6%
1.267.0
+1%
3.751.1
-1.5%
0
0
493.3
577.0
1.895.4
3.899.616
0
465.4
580.5
1.876.7
3.959.0
0
91.5
106.4
108.5
99.0
66.8
96.2
110.0
-
-
-
-
-
– (RON thousand);
– revenue (RON thousand);
– labour productivity (RON thousand/employee);
– operating expenses to1000 RON operating income;
– volume of geological resources (million m3);
– gas production decline (%);
– outstanding payments (thousand RON).
8=2x7
22.88
21.28
10.85
9.90
6.68
14.43
11.00
97.02
The performance criteria and objectives achievement degree is 97.02%.
The achievement of the performance indicators and criteria was positively influenced by:
Revenue – higher than the target by RON 195.4 million (+6.4%);
Labour productivity – higher than targeted by 42.2 thousand RON/employee (+8.5%);
Outstanding payments.
The following indicators were not fully achieved:
EBITDA –lower by RON 168.67 million (-8.5 %) compared to target value;
Operating expenses to RON 1000 operating income – higher by RON 5.8 (+1%)
compared to target value;
Volume of geological resources – lower by 628.4 million m3 (-33.2%);
Natural gas production – lower by 148.5 million m3
16 Production of 2012 corrected with the target decline of 1.5%, 2012 being considered “base year”.
Page 91 of 94
Board of Directors’ Report 2017
2017 Total
Weighting
factor
Indicator
1
EBITDA
CA
W
Cexpl/Vexpl
RES
dQ
Pres
Total
2
0.25
0.20
0.10
0.10
0.10
0.15
0.10
1.00
3
+4.5%
+6%
+6%
-0.6%
+1%
-1.5%
0
-
Average
values
2014-
2016
4
2,481,269.9
3,985,964.2
645.5
597.6
2.461
5.331.1
0
Target
values
Achieved
values
Achievement
rate
Weight
5
2,592,927
4,225,122
684.2
594.0
2.485.6
5.251.117
0
6
2,810,436
4,585,189
758.4
548.7
1.282
5.157.5
0
7=6/5x100
8=2x7
108.4
108.5
110.8
108.3
51.6
98.2
110.0
27.10
21.70
11.08
10.83
5.16
14.73
11.00
101.60
-
-
-
-
The performance criteria and objectives achievement degree is 101.60%.
The achievement of the performance indicators and criteria was mainly influenced by:
EBITDA – higher by RON 217.5 million (+8.4%) compared to target value;
Revenue – higher by RON 360.1 million (+8.5%) compared to target value;
Labour productivity – higher than targeted by 74.2 thousand RON/employee (+10.8%);
Operating expenses to RON 1000 operating income – lower by RON 45.3 (-7.6%)
compared to target value;
Volume of geological resources – lower by 1,203 million m3 (-48.4%);
Gas production decline – lower by 93.6 million m3 compared to target value.
The Board of Directors sets by Resolution no.14 on June 7, 2017 “the performance indicators
for the Director General approved in the Board meeting on 23.03.2017”.
Addendum no.5 to the Contract of Mandate was concluded subject to Board Resolution
no.14/2017, registered under no. 17702 of June 15, 2017.
By Resolution no.36 of December 14, 2017 the Board revoked the mandate as director
general of Mr. Metea Virgil Marius.
The Board appointed by Resolution 37 of December 14, 2017 Mr. Cindrea Emil Corin as
interim director general for a 4 month term, with the possibility to be extended up to
maximum 6 months, in compliance with the law. The contract of mandate concluded by the
Director General with the Board included no performance indicators and criteria.
The fulfilment of the performance criteria and objectives is shown in the table below:
17 Production of 2012 corrected with the target decline of 1.5%, 2012 being considered “base year”.
Page 92 of 94
Board of Directors’ Report 2017
1
EBITDA
CA
W
M. U.
2
thousand
RON
thousand
RON
thousand
RON
Performance
criterion
3
increasing
Weighting
factor
4
0.25
Target
values18
5
1,925,007
Achieved
values
6
2,810,436
Achievement
rate
7=6/5x100
146.0
Weight
8=2x7
36.50
increasing
0.20
3,801,946
4,585,189
120.6
24.12
increasing
0.10
602.53
758.38
125.9
12.59
Cexpl/Vexpl
RON
RES
dQ
Pres
Total
million
m3
million
m3
-
decreasing
increasing
keeping stable
keeping stable
-
0.10
0.10
0.15
0.10
1.00
653.21
2,500.0
548.68
1,282.0
4,751
5,158
0
-
0
-
119.1
51.3
108.6
110.0
-
11.91
5.13
16.29
11.00
117.54
The performance criteria and objectives achievement degree is 117.54%.
The achievement of the performance indicators and criteria was positively influenced by:
EBITDA – higher than targeted by RON 885 million (+46%);
Revenue – higher by RON 783 million (+20.6%);
Labour productivity – higher than targeted by 155.9 thousand RON/employee (+25.9%);
Operating expenses to RON 1000 operating income – lower by RON 104.5 (-16%)
compared to target value;
Natural gas production – higher by 406.5 million m3 ;
Outstanding payments.
Only “the volume of geological resources” was not fully achieved – lower by 1,218 million
m3 (-48.7%).
18Represents the values approved by the General Meeting of Shareholders Resolution no.1 of April 25, 2017
Page 93 of 94
Board of Directors’ 2017 Report
Annex 1
Table of Compliance with the Bucharest Stock Exchange Code of Corporate
Governance
Code provisions
Complies
Does not comply or
partially complies
Reasons for non-compliance
3
4
2
x
x
x
x
x
A.1
A.2
1
All the companies must have an
Internal Regulation of BoD that
includes the reference terms/ the
responsibilities of the Board and the
company’s
management
key
positions, and that applies, among
others, the General Principles in
section A.
interest stating
The ToR of the BoD should include
provisions for the management of
that
conflict of
members of the Board should notify
any conflicts of interest which have
arisen or may arise to the Board and
should refrain from taking part in
the discussion (including by not
being present where this does not
render the meeting non-quorate) and
from voting on the adoption of a
resolution on the issue which gives
rise to such a conflict of interest.
A.3
The BoD has at least five members
A.4
The majority of the members of the
BoD is non-executive; not less than
two non-executive members of the
BoD must be independent.
A.5
Each independent member of the
BoD must submit a statement at the
time of his/her nomination for
election or re-election, as well as
whenever a change in his/her status
occurs, indicating the elements on
which it is deemed independent in
terms of
its character and his
judgment.
A Board member’s other relatively
professional
permanent
commitments and engagements,
non-
including
executive
executive Board
in
non-profit
and
companies
organizations, should be disclosed
to shareholders and to potential
investors prior to his/her nomination
and during his/her mandate.
and
positions
Board of Directors’ 2017 Report 2017
Code provisions
Complies
Does not comply or
partially complies
Reasons for non-compliance
2
x
x
x
x
x
A.6
A.7
A.8
A.9
A.10
A.11
1
Any member of the BoD should
submit to the Board information on
any relationship with a shareholder
who holds, directly or indirectly,
shares representing more than 5%
of all voting rights. This also
applies to any report which may
affect the member's position on
matters decided by the Council.
The company should appoint a
for
responsible
Board secretary
supporting the work of the BoD
or
the
The corporate governance statement
should
inform on whether an
evaluation of the Board has taken
place under the leadership of the
chairman
nomination
committee and, if it has, summarize
key action points and changes
resulting from it. The company
should have a policy/guidance
regarding the evaluation of the BoD
containing the purpose, criteria and
frequency of the evaluation process.
by
attendance
The corporate governance statement
should contain information on the
number of meetings of the Board
and the committees during the past
directors
year,
(personally and in their absence)
and a report of the Board and
committees on their activities.
The corporate governance statement
should contain information on the
precise number of the independent
members of the Board of Directors.
set up
a
should
The BoD
nomination committee formed of
non-executives, which will lead the
process for Board appointments and
the
recommendations
make
Board.
to
The majority of the members of the
nomination committee should be
independent
3
4
x partially
The section on Statement on
corporate governance
the
Annual Board of Directors’ Report
includes
the
statements
evaluation of the BoD.
on
in
the Policy
Romgaz prepared
regarding evaluation and it will be
submitted for the approval of the
Board in a meeting subsequent to
this statement.
Following the approval it will be
published on the company website.
Page 2 of 9
Board of Directors’ 2017 Report 2017
Code provisions
1
B.1
The Board should set up an Audit
Committee and at least one member
independent non-
should be an
executive.
The Audit Committee should be
formed of at least three members
should be
and
independent.
the majority
have
proven
The majority of members, including
the chairman, should have proven
an adequate qualification relevant to
the functions and responsibilities of
the Committee. At
least one
member of the Audit Committee
should
and
a
appropriate accounting and auditing
experience.
The President
of
the Audit
an
should
Committee
independent non-executive member.
Among
the
Audit Committee should undertake
an annual assessment of the internal
control system.
responsibilities,
be
its
audit
should
consider
function,
The provision mentioned in section
the
B.3
the
effectiveness and scope of
internal
the
adequacy of risk management and
internal control reports to the Audit
Committee of
the Board, and
management’s responsiveness and
dealing with
in
effectiveness
identified internal control failings or
weaknesses and submit relevant
reports to the Board.
should
The Audit Committee
review conflicts of
in
transactions of the company and its
subsidiaries with affiliated parties.
interests
B.2
B.3
B.4
B.5
Complies
Does not comply or
partially complies
Reasons for non-compliance
3
4
2
x
x
x partially
The responsibility for monitoring
the effectiveness of the company’s
internal control, internal audit and
risk management
is
specified in the ToR of the Audit
Committee.
systems
x partially
See section B.3
x partially
provision
already
This
mentioned under Art. 8, par. 2 of
CCG ROMGAZ.
is
the BoD
The ToR of the Audit Committee
the
approved by
meeting of March 24, 2016
contains provisions in relation to
this obligation.
in
During 2017, the ToR of the Audit
Committee has been revised to
include
the
provisions
evaluation of conflict of interest in
connection with the Company’s
transactions with
the affiliated
parties.
on
The
updated ToR will
be
Page 3 of 9
Reasons for non-compliance
4
submitted for approval of BoD in a
meeting
this
subsequent
statement.
to
Also, during 2017 Romgaz has
developed a Policy on affiliated
parties and the document will be
submitted for approval of the BoD
in a meeting subsequent to this
statement.
Following the approval it will be
published on the company website.
The responsibility for monitoring
the effectiveness of the company’s
internal control systems, internal
audit
risk management
systems is specified in the ToR of
the Audit Committee.
and
For 2017, the Audit Committee
performed the annual assessment
of the risk management system.
Board of Directors’ 2017 Report 2017
Code provisions
1
Complies
Does not comply or
partially complies
2
3
B.6
should
The Audit Committee
evaluate
the
internal control system and risk
management system
the efficiency of
x partially
B.7
B.8
B.9
The Audit Committee
should
monitor the application of statutory
and generally accepted standards of
auditing. The Audit
internal
Committee
receive and
should
evaluate the reports of the internal
audit team.
The Audit Committee should report
periodically (at least annually) or
adhoc to BoD with regard to the
reports or analyzes undertaken by
the committee.
No shareholder may be given undue
preference over other shareholders
transactions and
with regard
agreements made by the company
with shareholders and their related
parties
to
x
x
x
Page 4 of 9
Board of Directors’ 2017 Report 2017
Code provisions
1
Complies
Does not comply or
partially complies
2
3
B.10
The BoD should adopt a policy
ensuring that any transaction of the
company with any of the companies
with which it has close relations that
is equal to or higher than 5% of the
company’s net assets (as stated in
the latest financial report), should
be approved by the Board following
a mandatory opinion of the Audit
Committee and fairly disclosed to
shareholders and potential
the
such
investors,
transactions fall under the category
of events subject
to disclosure
requirements.
the extent
to
B.11
B.12
internal audits should be
The
carried out by a separate structural
division (internal audit department)
within the company or by retaining
an independent third-party entity
The
Internal Audit Department
should functionally report to the
BoD via the Audit Committee. For
administration purposes and for the
scope related to the obligations of
the management to monitor and
mitigate risks, the Internal Audit
Department should report directly to
the Director General.
x
x
Reasons for non-compliance
4
provision
is
will
The
already
mentioned under Art. 9 of CCG
be
and
ROMGAZ
implemented by the Policy for
transactions with affiliated parties
which will be submitted
for
approval to the BoD in a meeting
subsequent to its drafting.
x
Following the approval, the policy
will be published on the company
website.
Page 5 of 9
Board of Directors’ 2017 Report 2017
Code provisions
1
Complies
Does not comply or
partially complies
2
3
The company should publish on its
website the Remuneration Policy.
The Remuneration Policy must be
to allow
the
formulated so as
to understand
shareholders
the
principles
arguments
and
underlying the remuneration of the
members of the Board and of the
General Director. Any significant
change
the
Remuneration Policy must be
posted in due time on the company's
website.
occurred
in
x partially
The company must include in its
Annual Report a statement on the
implementation of
this Policy
during
the annual period under
review.
The Report on Remuneration must
present the implementation of the
Remuneration Policy for persons
identified in this Policy during the
annual period under review.
C.1
D.1
Reasons for non-compliance
4
provision
The
already
mentioned under Art. 11, par. 5 of
CCG ROMGAZ.
is
Statement
in
on
The
section
corporate governance
the
Annual Board of Directors’ Report
includes statements regarding the
the
implementation
Remuneration Policy and
the
the Board of
remuneration of
the
Directors members and of
directors.
of
separate
document
A
on
Remuneration Policy was drafted
and
it will be submitted for
approval to the BoD in a meeting
subsequent to its drafting.
Following the approval, the policy
will be published on the company
website.
is
Report
Annual
on
The
Remuneration
presented
together with the Annual Board of
Directors’ Report.
It presents
details of the principles applied for
the determination of the Board
Members and directors.
to
the public
The company should establish an
Investors Relation Department -
the
indicating
responsible person/persons or the
organizational unit.
Besides the information required by
the legal provisions, the company
should also include on its corporate
website
Investor
Relations section, both in Romanian
and English, with all the relevant
information of interest for investors,
including:
dedicated
a
D.1.1 Principal corporate regulations: the
articles of incorporation, general
meeting of shareholders procedure
D.1.2 Professional CVs of the members of
the company’s governing bodies,
other professional commitments of
Board
including
executive and non-executive Board
positions in companies and non-
member’s,
x
x
x partially
Items on the GMS organization are
presented to shareholders at each
meeting.
A separate document on the GMS
Procedure and Rules was prepared
in 2017 and it will be submitted
for BoD approval in a meeting
subsequent to this statement of
conformity.
Page 6 of 9
Board of Directors’ 2017 Report 2017
Code provisions
1
profit organizations.
for
D.1.4
D.1.3 Current reports and periodic reports
(quarterly, semi-annual and annual
reports) – at least those specified in
Note D.8- including current reports
with detailed information related to
non-compliance with the Bucharest
Stock Exchange Code of Corporate
Governance
Information related to GMS: the
agenda and supporting materials;
the
the procedure approved for
the
election of BoD members,
rationale
the proposal of
candidates for the election to the
with
Board
their
professional CVs;
shareholders’
questions related to the agenda and
the company’s answers, inclusively
the decisions taken by the GMS
Information on corporate events
(such as payment of dividends and
other distributions to shareholders,
or other events
the
acquisition or limitation of rights of
the
a
deadlines and principles applicable
to such operations.
The information will be published
within a period of time allowing
investment
investors
decisions.
shareholder)
including
together
leading
D.1.5
take
to
to
D.1.6 The names and contact data of the
persons who should be able to
provide knowledgeable information
on request;
D.1.7 Corporate
financial
presentations
(for
example presentations for investors,
presentations on quarterly results
etc.),
statements
(quarterly, semi-annual, annual),
audit reports and annual reports
The company will have a policy for
annual cash distribution of dividend
or other benefits for shareholders,
proposed by the Director General
and adopted by the BoD as the
company’s Guideline on net profits
distribution.
The principles of
the annual
distribution of dividends policy to
Shareholders will be published on
the company’s website.
D.2
Complies
Does not comply or
partially complies
Reasons for non-compliance
3
4
2
x
x
x
x
x
x
Page 7 of 9
Board of Directors’ 2017 Report 2017
Code provisions
Complies
Does not comply or
partially complies
Reasons for non-compliance
D.3
D.4
D.5
D.6
D.7
D.8
D.9
D.10
1
The company shall adopt a policy
with respect to forecasts, whether
they are made public or not. The
Policy on forecasts will determine
the forecasts’ frequency, period and
content and will be published on the
company’s website.
GSM rules should not restrict the
participation of shareholders
in
general meetings and the exercising
of their rights. The modification of
rules will become effective no
sooner
following
the
shareholders’ meeting.
The external auditors should attend
the shareholders’ meetings when
their reports are presented there.
than
subject
professional,
financial
in
The BoD should present to the
GMS a brief assessment of the
internal controls and significant risk
management system, as well as
opinions on
to
issues
resolution at the general meeting.
consultant,
Any
analyst, may
expert,
participate
the shareholders’
meeting upon prior invitation from
the BoD.
journalists may also
Accredited
attend
the
Chairman of the Board decides
otherwise.
semi-annual
The quarterly and
financial reports should
include
information in both, Romanian and
English, regarding the key drivers
influencing the change in sales,
operating profit, net profit and other
relevant financial indicators, both
on quarter-on-quarter and year-on-
year terms.
the GMS, unless
time
The company should organize at
least two meetings/conference calls
with analysts and investors each
year. The information presented on
these occasions should be published
on the company website in the IR
section
of
the
at
meetings/teleconferences.
If the company supports various
forms of artistic and cultural
expression,
activities,
sport
educational or scientific activities,
and considers the resulting impact
on
and
competitiveness of the company is
part of its business mission and
innovativeness
the
2
x
x
x
x
x
x
x
x
3
4
External auditors are invited to
attend GMS meetings when their
reports are presented
in said
meeting.
Page 8 of 9
Board of Directors’ 2017 Report 2017
Code provisions
1
Complies
Does not comply or
partially complies
2
3
Reasons for non-compliance
4
development strategy,
publish
activity in this area.
the policy guiding
it should
its
Legend:
= General Meeting of Shareholders
GMS
BSE = Bucharest Stock Exchange
BoD
CCG
CCG ROMGAZ = the Code of Corporate Governance of S.N.G.N. ROMGAZ S.A., approved on January 28,
2016.
CV
ToR
= Board of Directors
= Code of Corporate Governance
= Curriculum Vitae
= Terms of Reference
Page 9 of 9
SNGN “ROMGAZ” SA Annex no.2
Litigations
No.
File No./ Court of
Law
0
1
2
3
4
5
1
3878/110/2007 -
Bacau County
Court of Law
513/87/2012 -
Teleorman
County Court of
Law
2177/99/2012 -
Iasi County Court
of Law
1318/87/2013 -
Teleorman
County Court of
Law
10917/107/2010/a
2 - Alba County
Court of Law
Case
2
Plaintiff
Defendant
Amount
(RON)
Description
3
4
5
insolvency proceedings Romgaz - creditor
S.C.Uzina Termica
Comanesti S,A -
debtor
328,645.82
insolvency proceedings Romgaz - creditor
SC Termaserv SRL
Alexandria - debtor
7,200,862.02
insolvency proceedings Romgaz - creditor
SC CET Iasi SA -
debtor
46,270,752.91
insolvency proceedings
Romgaz - creditor
SC Termaconfort SRL
Rosiorii de Vede -
debtor
1,888,200.99
insolvency proceedings Romgaz - creditor
SC GHCL UPSOM
ROMANIA SA- debtor
68,573,109.11
1
6
Decision no. 318/2009 of Bacau Court approved SNGN ROMGAZ SA‘s
request
insolvency proceedings. Currently, specific
insolvency proceedings acts are performed. A hearing is set for the
continuation of procedure.
initiate
to
interest). Specific
Receivables: RON 7,200,862.08 (on December 31, 2011 - equivalent
value of delivered gas, penalties,
insolvency
procedures are performed. A hearing is set for the continuation of
procedure.
Receivables: RON 46,270,752.91 (equivalent value of delivered gas,
late payment penalties, interest, court fees). Civil court resolution no.
697/April 17, 2012 issued by Iasi County Court of Law established the
initiation of the general insolvency procedure for the debtor, allowed
the lodgement of claim as formulated by Romgaz, the insolvency
procedure continued
Receivables: RON 1,888,200.99 (delivered gas price, late payment
penalties, interest/penalties calculated according to Payment Schedule
Agreement, fees related to enforcement procedure).
to
initiate
On 29.11.2010, SNGN ROMGAZ SA filed against the SC GHCL
UPSOM ROMANIA SA an application
insolvency
proceedings.
(File no. 10917/107/2010). SNGN ROMGAZ SA
requested the acceptance of certain, liquid and due receivables in
amount of RON 60,841,881.14 (representing the equivalent value of
natural gas, penalties calculated according to Payment Schedule
Agreement no. 100/May 5, 2009, late payment penalties calculated
until February 28, 2011, equivalent value of assignment of receivables
according to Assignment of Receivables Contract no. 1/June 2, 2009).
Against decision no. 351/F/May 18, 2011, the debtor filed recourse.
Alba Court of Appeal Law allowed the recourse, ruled the cassation of
the decision and remanded the case for retrial at Alba County Court of
Law.
Next
procedural
deadline
7
January 18,
2018
January 18,
2018
February
02, 2018
January 1,
2018
February
19, 2018
No.
6
File No./ Court of
Law
9526/3/2016
Bucharest County
Court of Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
insolvency proceedings Romgaz - creditor
SC
Termoelectrica
Bucuresti - debtor
PEET
SA
42,665,005.29
Allows the request of SC PEET TERMOELECTRICA S.A. Bucuresti to
initiate bankruptcy procedures in simplified form. Allows Romgaz
lodgment of claims in amount of RON 42,665,005.29. Bankruptcy
procedure continues. Hearings are set in this respect.
7
8
8028/95/2013 -
Gorj County Court
of Law
insolvency proceedings Romgaz - creditor
6991/236/2009 -
Giurgiu Court of
Law
Claims
Uzina
S.C.
Termoelectrica
Giurgiu - defendant
S.C. Grup de Comert
si Investitii SRL (by
the official receiver-
Divizia de
Reorganizare
Judiciara si Executare
Creante IPURL) -
debtor
Romgaz - plaintiff
1,135,219.95 On October 24, 2013, Gorj Court allowed the request of the debtor
S.C.Grup de Comert si Investitii SRL by Decision no. 446/2013,
to
requesting
reorganize its activity. Acts specific to the insolvency procedure are
performed. Hearing is set for the continuation of proceedings.
insolvency proceedings
initiation of
in order
the
45,973.26 Amount of claims: RON 45,973.26 - late payment penalties calculated
according to Natural Gas Sale Contract No.14/2008.
Recourse. Recourse dismissed by Giurgiu Court of Law.
9
598/57/2011 -
Sibiu County
Court of Law
Bring the action before
administrative appeal
Romgaz - plaintiff
Court of Accounts of
Romania - defendant
102,357,059
SNGN ROMGAZ SA brought the action before administrative appeal
requesting annulment of decisions issued by the Romanian Court of
Accounts – Sibiu Chamber of Accounts, namely: Note no.3/2011;
Decision No.10/24.01.2011;Finding report registered at SNGN Romgaz
SA under no. 2033/10.12.2010. According to Ruling no. 950/2016 the
action was denied. Recourse was filed. On January 10, 2018 the court
allowed the recourses filed by the plaintiffs SNGN Romgaz S.A. and by
the interveners CAMERON INTERNATIONAL CORPORATION, SC
INDUSTRIAL TRADING SRL, SC
INSPET SA PLOIEŞTI, SC
CONDMAG SA, SC PETROSTAR SA against ruling 950/2016 issued
by Sibiu County Court of Law. Part of the ruling is annulled and retains
the file for retrial of findings and measures no. 4, 5, 6 of Decision
10/January 24, 2001 issued by Sibiu Court of Accounts. Sets a hearing
2
Next
procedural
deadline
March 27,
2018
January 29,
2018
Finalized,
enforcement
of
judgement,
the
receivables
is partially
recovered,
amount to
recover:
RON
5.746.67
March 07,
2018
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
on March 7, 2018 for the presentation of merits in connection with
findings and measures no. 4, 5, 6 of Decision 10/January 24, 2001 with
summoning the parties. The remaining part of the Ruling 950/2016
issued by Sibiu County Court of Law is maintained. Dismisses the
recourse filed by SNGN Romgaz S.A. against ruling no. 1421/2017
issued by Sibiu County Court of Law. Final ruling no. 1/2018 dated
January 10, 2018.
In the summons, SNGN ROMGAZ SA requested the court to compel
the defendants to a jointly payment of monies.
In the summons, SNGN ROMGAZ SA requested the court to compel
the defendants to pay jointly the amount of RON 43.059.199,
representing an undue payment in connection with labor contract no.
217/2006
20,052,457
43,059,199
Next
procedural
deadline
stay of trial
proceedings
stay of trial
proceedings
15,596,065
In the summons, SNGN ROMGAZ SA requested the court to compel
the defendants to a jointly payment of monies.
stay of trial
proceedings
23,645,128
In the summons, SNGN ROMGAZ SA requested the court to compel
the defendants to pay.
stay of trial
proceedings
7852/85/2013 -
Sibiu County
Court of Law
8259/62/2013 -
Brasov County
Court of Law
Claims -undue payment Romgaz - plaintiff
Claims -undue payment Romgaz - plaintiff
8258/62/2013 -
Brasov County
Court of Law
Claims
payment,
contract no.14/2009
-undue
works
Romgaz - plaintiff
Claims -undue payment Romgaz - plaintiff
SC APROV SA; SC
ROMOIL SA -
defendant
SC Condmag SA;
Cameron International
Corporation -
defendants
SC INSPET SA; SC
Condmag SA; SC
Petrostar SA; SC
Industrial Trading
SRL - defendants
SC Condmag SA -
defendant
10
11
12
13
14
15
8260/62/2013 -
Brasov County
Court of Law
19495/3/2013 -
Bucharest Court
of Law
2541/96/2013 -
Harghita County
Court of Law
claims (equivalent value
of delivered and unpaid
natural gas, according
to gas sale-purchase
contract no. 2/2010)
insolvency proceedings
Romgaz - plaintiff
SC G-ON Eurogaz
SRL - defendant
11,920,527.50
Claimed amount: RON 11,920,527.50 (equivalent value of delivered
and unpaid natural gas)
compulsory
enforcement
Romgaz - creditor
SC MAVEXIM SRL -
debtor
On the trial date of June 25, 2013, the court allowed the debtor’s
request to file for insolvency (in compliance with art. 27 paragraph 5 of
law 85/2006). The debtor initiated insolvency procedures.
February
14, 2018
3
No.
16
File No./ Court of
Law
781/85/2014 Sibiu
Court of Law
(Bucuresti Court
of Law file no.
28323/3/2014
Case
Plaintiff
Defendant
Amount
(RON)
Description
Claims
Romgaz - plaintiff
Electrocentrale
-
Bucuresti
SC
SA
defendant
240,280,906
Amount of claim: RON 240,280,906.05. The court allows the summons
and issued ruling 2514/May 13, 2015. The defendant files an appeal.
The court of appeal allows the appeal filed by SC Electrocentrale
Bucuresti S.A. through its Official Receiver KPMG Restructuring SPRL,
partly changes the appealed ruling meaning that it partly allows the
case and compels the defendant to pay RON 40,511,915.91 as legal
interest. Recourse may be filed within 30 days from communication of
ruling no. 1176/June 26, 2017. Recourse filed.
Next
procedural
deadline
Not
estalished
17
1540/215/2013 -
Craiova Court of
Law
Claims
Prunoiu Gheorghita
- plaintiff
Romgaz
Ploiesti - defendant
- SISGN
50,000 According to the summons, the plaintiff requests the decommissioning
of pipelines allegedly undercrossing the plaintiff’s land and to compel
the defendant to the payment of the equivalent value for non-use of
land affected by such pipelines. The case is under stay of proceedings
because the plaintiff did not comply with the court’s dispositions.
The case is reinstated.
A topographical and agricultural expertise was order.
February
12, 2018
18
19
20
21
1463/108/2012 –
Arad Court of Law
Insolvency proceedings
Romgaz – SISGN
Ploiesti – creditor
SC Amarad SA –
debtor
42,418.48
Upon the debtor’s request, prepared in accordance with the provision
of Article 27, paragraph 5 of Law 85/2006, insolvency procedures were
initiated.
January 25,
2018
488/251/2008 –
Ludus Court of
Law
2375/85/2016
Sibiu County
Court of Law
2798/85/2016
Alba Iulia Court of
Appeal
Petrea Zachei,
Petrea Cornelia –
plaintiffs
Romgaz - Tg. Mures
Branch– defendant
20,000
challenge
Romgaz – plaintiff
Romanian Court of
Accounts – defendant
Romgaz – plaintiff
Romanian Court of
Accounts – defendant
Suspending the
implementation of
decision 94/August 17,
2017 issued by the
Romanian Court of
Accounts
Subject of
dispute cannot
be evaluated in
money
Subject of
dispute cannot
be evaluated in
money
4
January 21,
2018
January 26,
2018
Finalized
the
file no.
irrevocable decision of
By summons, the plaintiffs requested the court to establish the property
title in connection with an unincorporated parcel of 11,600sq.m.
Case suspended until
487/251/2012*. Reinstated upon plaintiffs’ request.
Challenge of Decision no. 26/2016 issued by the Romanian Court of
Accounts – Sibiu Court of Accounts. Proceedings on the merits. Two
relating expertizes were approved in connection with accounting and
natural gas matters.
Romgaz summoned the Court of Accounts whereby it requested the
suspension of Decision 94/August 17, 2017 issued by the Romanian
Court of Accounts in solving the challenge against decision 26/June
01, 2016 until the settlement of case 2375/85/2016. Sibiu County
Court of Law partially allowed the suspension request in connection
with the irregularities 1 and 2 established by the Court of Accounts.
Recourse. Alba Iulia Court of Accounts by Decision 665/March 15,
2017 allows the recourse filed by the Court of Accounts dismissing
Romgaz request for suspension. Dismisses the recourse filed by
Romgaz. Final ruling.
Case
Plaintiff
Defendant
Amount
(RON)
Description
No.
22
File No./ Court of
Law
17666/320/2010 –
Tg. Mures Court
Of Law
claims
23
7070/320/2012 –
Tg. Mures Court
of Law
claims
Romgaz - Suc. Tg.
Mures – defendant
SC Network Press
Concept SRL
Medias (former
RODIPET) –
defendant
Barsan Romulus -
plaintiff
Romgaz – Suc. Tg.
Mures – defendant
24
963/85//2013 –
Sibiu County
Court of Law
claims
Romgaz – Suc. Tg.
Mures – plaintiff
Borda Alexandru –
defendant
25
26
1434/1371/2007
Mureş
Commercial Court
of Law
2899/62/2015
Brasov County
Court of Law
Insolvency procedure
Romgaz – STTM
Tg.Mureş – Creditor
SC Poliglot
Comimpex SRL -
Debtor
Insolvency procedure
SNGN Romgaz SA
–STTM Tg.Mureş –
creditor
27
580/1371/2010 –
Mures
Commercial Court
claims
Romgaz – Suc.
Medias – creditor
SC Condmag SA
Brasov, debtor,
represented by the
Official Receiver
Rominsolv SPRL
Bucuresti
SC Globe Trotters
SRL – debtor
5
6,851.25 The defendant failed to meet the contractual obligation to deliver the
Romanian Official Journal for Q2 and Q3/2008: 3 subscriptions to Part
I, 3 subscriptions to Part I bis and 1 subscription to Part VI, therefore
the defendant is obliged to refund RON 6,851.25 (out of which RON
565,70 is VAT). Currently the case is suspended based on Article 36 of
Law 85/2006 on Insolvency procedure.
88.000 By summons the plaintiff requested the court to compel the payment of
the following claims: RON 80,000; RON 30,000; RON 3,000/month;
RON 88,000. Tg. Mures local court of law allowed Romgaz request
during the hearing of January 9, 2018, whereby additional clarifications
were requested from expert Dirija Marcel in connection with the
expertise report dated December 22, 2017. The case was postponed
to February 06, 2018
1,307 The case consists of compelling the defendant to refund the plaintiff
RON 1,304 representing the holiday allowance and the holiday
remuneration for the period he didn’t work and received holiday leave,
because after effectuating the holiday leave for the year 2012 (34
days) in March and May 2012, the defendant had a number of 32
(working days) of unjustified absences, which lead to his disciplinary
dismissal. Court allowed the action. The enforcement order was
initiated.
6,783.41 As of November 22, 2007, Mures County Court of Law allowed the
request for initiating the insolvency procedure against the debtor SC
Poliglot Coninpex RL. STTM Tg. Mures is a creditor included in the
body of creditors with the amount RON 6,783.41.
70,467.25 STTM Tg. Mures is creditor, its RON 70,467.25 receivable being
included in the final body of creditors. Hearing is allowed for
confirmation of reorganization plan and for filing the general bankruptcy
procedure filed by AJFP Braşov.
The request is allowed.
9,206.21 Value of claims: RON 9,206.21
Next
procedural
deadline
stay of trial
proceedings
February
06, 2018
enforcement
February
22, 2018
February
13, 2018
January 21,
2018
No.
File No./ Court of
Law
of Law
28
29
30
12236/320/2012 –
Tg. Mures Court
of Law
3128/257/2013 –
Medias Court of
Law
3127/257/2013 –
Medias Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Romgaz – Suc.
Medias – plaintiffs
Claims
Romgaz – plaintiff
claims
Romgaz – plaintiff
SC Torpi SRL; SC
Manadas SRL –
defendands
Asociatia sportiva
“Dacia Atel” –
defendant
Asociatia
transparenta deciziei
administrative Medias
– defendant
11,575.52 Value of claims: RON 11,575.52
6,247.77 By summons, the court is requested to establish the termination of the
Sponsorship Contract no. 178/2011 and, as a consequence, to restore
the parties to their initial state by obligating the defendant ASOCIATIA
SPORTIVA “DACIA ATEL to pay RON 6,247.77,
RON 5,000 as financial support provided under Contract 178/2011.
2,926.64 By summons, the court is requested to establish the termination of the
Sponsorship Contract no. 8/February 25, 2010 and, as a consequence,
to restore the parties to the initial state by obligating the defendant
ASOCIATIA
ADMINISTRATIVE
MEDIAS” to pay the amount RON 2,926.64.
“TRANSPARENTA DECIZIEI
31
1542/102/2017-
Mures County
Court of Law
Challenge against
disciplinary sanction
decision
Stoica Eugen–
plaintiff
SNGN ROMGAZ S.A.
– STTM Tg. Mures –
defendant
993 lei
32
33
1733/102/2017-
Mures County
Court of Law
Challenge against
disciplinary sanction
decision
Popeanu
Sebastian- plaintiff
SNGN ROMGAZ S.A.
– STTM Tg. Mures –
defendant
1,560
3513/320/2016 –
Mures County
Court of Law
Complaint of violation
SNGN ROMGAZ
S.A. – STTM Tg.
Mures – plaintiff
IPJ Mures , Traffic
Office – defendant
4,000
6
STTM issued a disciplinary sanction decision against its employee, the
plaintiff, whereby he was sanctioned with a 10% reduction of the base
salary for 3 months.
Ruling no. 779/10.10.2017 – allows the challenge. Annulment of the
defendant’s Decision 98/April 24, 2017. Compels the defendant to
refund the amount retained from the plaintiff’s salary, amount to be
updated and indexed on its actual payment and to pay court fees of
RON 2,000.
The defendant filed for appeal. Appeal hearing established.
The case consists of a challenge raised against the sanction decision
issued by the defendant, whereby the plaintiff was sanctioned with a
10% reduction of the base salary for 3 months.
The case was deferred. The testimony of one witness is to be taken.
The ruling 988/07.12.2017 – dismisses the civil case.
SNGN ROMGAZ SA -STTM Tg. Mures filed a complaint of violation in
connection with Record of Findings 0074811/2016 whereby IPJ Mures
fined Romgaz with RON 4,000 on grounds that for the special
transportation vehicle (cesspool emptier) license plate MS-86-TTM, the
driver failed to present tachometer records for the past 28 days. The
car is equipped with a digital device, making therefore available to the
Next
procedural
deadline
stay of trial
proceedings
compulsory
enforcement
compulsory
enforcement
January 30,
2018
Ruling not
communicat
ed
Finalized
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
34
30/257/2017-
Medias Court of
Law
Embezzlement Art. 295
Criminal Code
SNGN ROMGAZ
S.A. – STTM Tg.
Mures – civil party
claiming damages
Tarnu Razvan Cornel-
defendant
1,024
police officer the tachometer card. IPJ Mures did not take such into
account because it had no technical devices for reading and
interpreting such data.
Ruling 5685/24.11.2016 allows the complaint and cancels the Record
of Findings. Appeal filed. Appeal dismissed.
Indictment drafted by the Public Prosecutor’s Office of Medias Court of
Law ordered the trial of the defendant Tarnu Razvan charged with
embezzlement as stipulated in Art.295 par.1 Penal Code.
Romgaz, is civil party claiming damages in amount of RON 1,024,
equivalent value of 200 l of fuel stolen by the defendant.
Penal ruling 223/CC/08.06.2017 issued by Medias Court of Law orders
the consideration of case. The ruling was challenged by the defendant.
The challenge was dismissed by Sibiu County Court of Law ruling
72/CCP/2017/26.07.2017. Term established for the defendant to
employ defense and for witness hearings.
35
3104/85/2014 -
Sibiu County
Court of Law
Public procurement
related litigation
Romgaz plaintiff
36
1794/85/2014 -
Sibiu County
Court of Law
Adjustment of Work
Contract no.
233/September 26,
2012
S.C. Dafora S.A
Medias: plaintiff
3.840.149,47
plus TVA
274.900,60 Romgaz requested the court to compel the defendants to the joint
updated payment of RON 274,900.60 representing the prejudice
caused to Romgaz representing the equivalent value of electricity
generation not made during December 16, 2013-January 14, 2014 and
to the payment of court fees. Accounting expertise was performed.
Deadline was set for the expert to reply to challenges made in
connection with the expertise. Postponement for filing an addendum to
the expertise
In the summons, the plaintiff requested the court to establish the
adjustment of work contract no. 233/September 26, 2012 meaning the
increase of contract price by RON 3,840,149.47 plus VAT and to
compel Romgaz to the payment thereof. This amount represents the
equivalent value of additional and unforeseen works and the legal
interest.
Alternately, to compel Romgaz to pay RON 3,840,149.47 plus VAT as
damages for contract default, and the relating court fees.
The case benefitted from a technical and legal expertise in the field of
natural gas, the trial date was September 2, 2015 when the expertise
finding was filed. Appeal was filed. Response to appeal. Recourse
dismissed.
Money refund notification was sent.
S.C. ICPE
Electrocond
Tehnologies S.A.,
Energ Natural Power
Limited, S.C.
Instaservice S.R.L.:
defendants
Romgaz: defendant
7
Next
procedural
deadline
January 22,
2018
January 23,
2018
finalized
No.
37
38
39
40
41
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
4760/102/2013 -
Mures County
Court of Law
Criminal court -
corruption (Law
78/2000)
Romgaz -
Sucursala Medias:
injured party
Giurgea Teodor s.a.:
defendant
2699/251/2014 -
Ludus Court of
Law
2415/284/2015
Racari Court of
Law separated
from case
770/284/2014
2042/320/2015 –
Tg. Mures Court
of Law
3843/121/2014 –
Galati County
Court of Law
Eviction
claims
Romgaz - SPEE
Iernut: plaintiff
SC Marele Alb
Prodimpex SRL:
defendant
Tudor Gheorghita
s.a: plaintiff
Romgaz - SISGN
Ploiesti: defendant
claims - compensation
Chiciudean Vasile -
plaintiff
Romgaz - Suc. Tg.
Mures - defendant
Insolvency procedure
Romgaz - creditor
Electrocentrale Galati
SA - debtor
8
In this case file, Romgaz – Sucursala Medias is injured party as it is
creditor to SC Globe Trotters SRL, a company in insolvency. In fact,
the prejudice to Romgaz – Sucursala Medias is due to an agreement
between the defendants and the directors of SC Globe Trottes SRL for
the creation of an unlawful assignment (by making use of fictional
documents).
The scope of file is the settlement of the eviction request initiated by
the plaintiff due to the fact that the defendant has late rent payments.
On May 7, 2015, the court allowed the request. The compulsory
enforcement procedure was initiated.
The plaintiffs request the payment of an allowance in exchange for
easement rights in order to gain access to wells 116 and 131
Bilciuresti.
On November 08, 2017 the ruling was pending. The case was
dismissed.
5,112 On November 25, 2016, at the first trial of Tg. Mures Court of Law, the
ruling was postponed to December 6, 2016 when according to
Decision 5880/2016 the request of the plaintiff was allowed. The
defendant is compelled to pay RON 5,112 as damages, to pay the
court expenses. The ruling was not communicated.
162,281,861.83 The subject matter of the case file is the settlement of the request filed
by the debtor SC Electrocentrale Galati SA, under Law no.85/2006 on
insolvency procedure. On June 16, 2014, the Court allowed the
application, decided to open the general insolvency procedure against
the debtor.
SNGN ROMGAZ SA
the
filed an application
outstanding debt in amount of RON 162,281,861.83 (equivalent value
of natural gas, penalties and interests). In relation to this amount to be
included
the body of creditors, only RON
139,056,681.91 was allowed by the liquidator of assets of SC
Electrocentrale Galati SA. Romgaz, as creditor, challenged the
preliminary table of receivables. (Currently, the challenges to the
preliminary table are on trial)
For subsequent procedure – trial date:
to acknowledge
for Romgaz
in
Next
procedural
deadline
January 22,
2018
Compulsory
enforcement
January 29,
2018
January 29,
2018
No.
42
File No./ Court of
Law
2190/257/2015-
Medias Court of
Law
1532/1/2015 –
ICCJ
2303/1/2017/ -
ICCJ
2899/62/15 –
Brasov County
Court of Law
4783/121/2011
Galati County
Court of Law
509/1371/2015
Mures County
Court of Law
43
44
45
46
47
48
Case
Plaintiff
Defendant
Amount
(RON)
Description
Complaint of violation
Romgaz -
complainant
Corrupt payment
Romgaz – plaintiff
claiming damages
Autoritatea Nationala
de Reglementare in
Domeniul Energiei
(Romanian National
Regulatory Authority
for Energy)-
respondent
Rudel Obreja s.a. -
defendant
75,000 The scope of the dispute is the settlement of the complaint of violation
filed by SNGN ROMGAZ SA that mainly requested the annulment of
the Finding Report and Sanctioning of Non-Criminal Offences no.
43376/June 11, 2015 prepared by ANRE, and, alternatively,
replacement of
fine sanction by a warning. Complainant’s
application allowed. Appeal possible. Appeal filed. Appeal dismissed.
the
410,000
In the case file, SNGN ROMGAZ SA is plaintiff claiming damages in
amount of RON 410,000. Dismissing the request to be plaintiff claiming
damages. Appeal filed.
January 29,
2018
insolvency
Romgaz
SC Condmag SA
83,225,512.28 Recovery of undue payment found by the Court of Accounts
insolvency
Romgaz- creditor
Elcen Galati-debtor
162,281,861.83 Challenge of the nominal table
insolvency
Romgaz- creditor
Foraj Sonde Ernei-
debtor
1,428.98 Trial date. Insolvency procedure is continued.
2496/102/2015* -
Sibiu County
Court of Law
claims
Romgaz - SA Suc.
Tg. Mures - plaintiff
Kovacs Ladislau -
defendant
318,881.96 Dismisses the complaint filed by the plaintiff against the defendant.
Compels the defendant to the payment of RON 1,950 as court
expenses. Right
the
to appeal exercisable
communication of ruling. Ruling 1316/2017
in 10 days
from
1560/251/2015
Ludus Court of
Law
claims
Romgaz-plaintiff
Romarcom SRL-
defendant
62,972.85 The civil actions for claiming damages filed by Romgaz-SPEE Iernut
against SC Romarcom SRL is partially allowed and consequently:
-
-
the defendant is obliged to pay the plaintiff RON 16,605.35
as damages;
the defendant is obliged to pay the plaintiff RON 935
9
Next
procedural
deadline
The RON
25,000 fine
is to be
recovered.
February
27, 2018
April 3,
2018
February
14, 2018
Currently
not
established
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
-
representing court fees.
SC Romarcom filed for appeal. Appeal dismissed. Right to
recourse.
49
50
51
52
53
8029/2/2015
Bucharest Court
of Appeal
Challenge of
administrative
document
Romgaz
ANAF Brasov
22,424,030 Bucharest Court of Appeal partially allows Romgaz action. Ruling is
challenged with appeal by both parties.
774/308/2016
Sighisoara Court
of Law
775/308/2016
Sighisoara Court
of Law
Specific performance
Romgaz -
Sucursala Medias
Topliceanu N.:
defendant
Equivalent
value of ordered
expertize
The defendant requests the registration in the Land Register 2500
Nades of the housing Nades canton, which Romgaz has sold by
means of Sale Contract no. 10723/December 9, 1997.
Specific performance
Romgaz -
Sucursala Medias
Moldovan Vasile:
defendant
Equivalent
value of ordered
expertize
The defendant requests the registration in the Land Register 2500
Nades of the housing Nades canton, which Romgaz has sold by
means of Sale Contract no. 10724/December 9, 1997. Case file joint
with case file 774/308/2016.
8237/107/2012
Alba County Court
of Law
Insolvency
Romgaz -
Sucursala Medias-
creditor
SC AgroValea Lunga
SRL: debtor
986.52 Equivalent value of unpaid invoice.
8057/320/2016 -
Targu Mures
Court of Law
claims
SC Ambient SA:
plaintiff
Romgaz - STTM
Targu Mures:
defendant
54
9261/320/2016 -
Targu Mures
Court of Law
unjust enrichment
SC Rocada Serv
SRL: plaintiff
Romgaz - STTM
Targu Mures:
defendant
130,496.59 The plaintiff requests the payment of RON 130,496.59 representing
outstanding payment obligations under the Debt Assumption Contract
no. 121/September 21, 2012 concluded with Romgaz-STTM, to which
the legal interest is added. Ruling no. 847/2017 dismisses the request.
The defendant requests the supplementation of ruling with the order to
compel the plaintiff to payment of court expenses already paid by the
defendant. Plaintiff filed an appeal.
24,045.92 The plaintiff requests to compel the defendant to the payment of RON
24.045,92 representing the equivalent value of transportation services
supplied and not paid and relating late payment penalties applied
against the principal debt until the actual date of payment. Ruling no.
1196/2017 partially allows the claim, dismisses the plaintiff’s claim
10
Next
procedural
deadline
Currently
not
established
Stay of trial
proceedings
due to non-
payment of
expertize
Stay of trial
proceedings
January 16,
2018
Currently
not
established
Appeal not
filed until
the date
hereof
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
55
56
413/257/2017-
Medias Court of
Law
Complaint against
ordinance of non-lieu
(art. 340 New Criminal
Code of Procedure)
Tarnu Razvan
Cornel- defendant
SNGN ROMGAZ S.A.
– STTM Tg. Mures –
civil party
1,024
30/257/2017/a1-
Medias Court of
Law
57
31/257/2017
Medias Court of
Law
Measures and
exceptions ordered by
the preliminary chamber
judge in connection with
in connection with the
trial start.
Confirmation of release
from criminal
prosecution
Tarnu Razvan
Cornel- defendant
SNGN ROMGAZ S.A.
– STTM Tg. Mures –
civil party
1,024
Crisan Mircea -
defendant
SNGN ROMGAZ S.A.
– STTM Tg. Mures –
civil party
101.6
58
5991/303/2016
Bucharest Sector
6 Court of Law
Claims
SC Loreto Exim SRL
Romgaz –
SIRCOSS and
Romgaz – STTM
Tg. Mures
11
against the defendant as unfounded. Compels the defendants to the
joint payment of RON 1,307 as court expenses and dismisses the
plaintiff’s request to compel the defendant to the payment of lawyer
fee, as unfounded. Right of appeal in 30 days from the communication
of the ruling.
Claim filed by the defendant against the Prosecutor’s Office Ordinance
whereby the defendant Tarnu R was ordered to trial on charge of
embezzlement as stipulated in Art.295 par.1 Criminal Code. Final
ruling of disinvestment conjoins this case file with case file
30/257/2017.
Request filed by the defendant for the establishment of nullity of the
evidence examined during the criminal prosecution phase. Romgaz,
through STTM, constituted as civil party claiming damages for the
amount of RON 1.024 representing equivalent value of 200l of fuel
stolen by the defendant. Penal ruling 223/CC/2017 establishes the
legality of filing the indictment and orders the trial.
Indictment of penal case 2507/P/2016 of the Public Prosecutor’s Office
ordering the release from criminal prosecution of defendant Crisan
Mircea in connection with the embezzlement offense on ground of lack
of public interest in pursuing this matter based on Criminal Code of
Procedure provisions. Romgaz, through STTM established as civil
party claiming damages for RON 101.6 representing the equivalent
value of 20 l of fuel stolen by the defendant. Penal ruling
38/CC/27.01.2017 dismisses the confirmation request annulling the
latter. Criminal prosecution to be continued and completed; final ruling
26,099.4 Sector 6 Bucuresti Court of Law – action filed for restitution for the
recovery from SC Loreto Exim SRL of RON 26,099.4 representing
undue payment generating for the defendant an unjust enrichment.
The claim was partially allowed. Right to appeal in 30 days from the
communication date.
Appeal filed by STTM on April 07, 2016 and by the two litigating
parties, Romgaz Sircoss and Loreto Exim SRL, term for appeal set by
Bucharest County Court of Law
for missing proper summons
procedure in relation to the defendant
Next
procedural
deadline
Final ruling
Final ruling
March 22,
2018
No.
59
File No./ Court of
Law
3183/306/2016 –
Sibiu Court of Law
claims
Case
Plaintiff
Defendant
Romgaz - SPEE
Iernut : plaintiff
SC Laromet Metal
Star-D SRL:
defendant
Amount
(RON)
Description
4,000.03 Recovery of receivables. Request is allowed.
847/1285/2014 -
Cluj County
Specialized Court
of Law
Insolvency proceedings Romgaz - SPEE
Iernut - creditor
SC Marele Alb
Prodimpex SRL -
debtor
64,742 Continuation of insolvency procedure
1335/251/2016 –
Ludus Court of
Law
claims
Romgaz - SPEE
Iernut: plaintiff
PFA Cormos Daniela:
defendant
4,184.00 Recovery of receivables. Request allowed. Dismisses the appeal filed
by the defendant.
698/251/2016 –
Ludus Court of
Law
Claims, separated from
File Case no.
1855/251/2013
PFA Cormos
Daniela: plaintiff
Insolvency proceedings Romgaz: creditor
Romgaz - SPEE
Iernut: defendant; SC
Comindal Impex SRL:
defendant
SC Foraj Sonde SA
Ernei: debtor
150,000 Damages. Dismisses the plaintiff’s request. Right to file an appeal.
1,428.98 Request to initiate insolvency proceedings.
Next
procedural
deadline
Compulsory
enforcement
March 14,
2018
Compulsory
enforcement
Ruling not
communicat
ed
February
13, 2018
insolvency
Romgaz
SC Condmag SA
3,291.41 Request to initiate insolvency proceedings. Stay of proceedings
Complaint of violation
Romgaz -
Sucursala Targu
Mures: appellant
Politia Municipiului
Targu Mures:
respondent
2,000 Complaint of violation against the offence report. Complaint of violation
dismissed. Appeal filed by the appellant. Appeal dismissed. Ruling
1452/2017.
Finalized
12
60
61
62
63
64
65
509/1371/2015 –
Mures
Commercial Court
of Law
2899/62/15 –
Brasov County
Court of Law
5452/320/2016 -
Targu Mures
Court of Law
No.
66
File No./ Court of
Law
5453/320/2016 -
Targu Mures
Court of Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Complaint of violation
Romgaz -
Sucursala Targu
Mures: appellant
Politia Municipiului
Targu Mures:
respondent
2,000 Complaint of violation against the offence report. Complaint of violation
allowed. Respondent files for appeal. Appeal allowed. The complaint of
violation is entirely dismissed due to lack of substantiation of such
complaint filed against the offence report PMSY no. 000169 dated April
26, 2014. Final ruling: 1309/2017.
Next
procedural
deadline
Finalized
claims
319/1371/2016 –
Mures
Commercial Court
of Law
LEX Guard Security
SRL Reghin:
plaintiff
Romgaz - Sucursala
Targu Mures:
defendant
126,483.91 Claims arising in connection with the abusive termination of Security
Services Contract. Action dismissed. Court issues ruling no. 94/2016.
Appeal may be filed within 30 days. Ruling is not communicated.
Currently
not
established
67
68
69
627/102/2016 –
Mures County
Court of Law
corruption
Romgaz: injured
party and plaintiff
claiming damages
9526/3/2016
Bucharest County
Court of Law
insolvency proceedings Romgaz - creditor
70
681/57/2015
Action for annulment
Romgaz: plaintiff
Avram Pantelimon,
Olaru Ioan Tiberiu,
Mincan Emil Valentin,
Ştefan Ioan:
defendants
SC
Termoelectrica
Bucuresti - debtor
PEET
SA
Consiliul National
pentru Combaterea
Discriminarii si
Sindicatul "Extractie
Gaze si Servicii"
146,637.06 Criminal action against corruption.
Insolvency
42,665,005.29
The scope of
is
the action
to partially allow Decision no.
371/September 2, 2015 issued by Colegiul Director al CNCD, the use
of the wording “signing syndicate” in Romgaz Collective Labor Contract
2015-2016 does not constitute a discrimination based on syndicate
membership and on access to its facilities; consequently the deletion
from Romgaz Collective Labor Contract of the above-indicated wording
is not required, the issuance of a fine to Romgaz is not grounded and
the publishing of the resolution in a nation-wide paper is not required.
Alba Court of Appeal allowed the action. CNCD filed recourse. ICCJ
did not set a trial date.
February 7,
2018
March 27,
2018
Currently
not
established
Stay of
proceedings
71
1284/102/2016
Mures County
Court of Law
Labour related litigation Sturza Ioan: plaintiff Romgaz
158,272 Discrimination. Stay of proceedings until the final settlement of file
249/57/2016.
13
No.
72
File No./ Court of
Law
249/57/2016 Alba
Iulia Court of
Appeal
Case
Plaintiff
Defendant
Amount
(RON)
Description
Labour related litigation Romgaz: plaintiff
CNCD and Sturza
Ioan: defendants
Alba-Iulia Court of Appeal: annulment of Decision no. 603/December
09, 2015.Recourse will be filed with the Higher Court of Cassation and
Justice.
73
1300/102/2016
Labour related litigation Tegla Nicodim
Ciprian: plaintiff
Romgaz: defendant
74
1311/257/2016 –
Medias Court of
Law
claims
Romgaz
Asociatia "Creation
Transylvania"
75
4887/306/2016 –
Sibiu Court of Law
claims
Romgaz
Asociatia "Sf. Patrick"
130,000 Mures County Court of Law: scope of case file is to compel Romgaz to:
- review salary-related rights starting with 2013 until now and
onwards;
- pay salary-related monetary difference starting with June 2013 until
the full payment thereof amounting RON 130,000 at the record date of
the action, for 36 months;
- pay legal interest on salary-related monetary differences starting
with June 2013 until the full payment thereof. Accounting expertize
shall be performed. Term established for filing the expertize.
7,000 Summons, reimbursement of amount. Action allowed. Final ruling.
1,750 According
to
the summons,
the partial unilateral resolution of
Sponsorship Contract no. 8207/2015 and reimbursement of amount is
petitioned. Sibiu Court of Law dismissed the request. Romgaz filed for
appeal in May 19, 2017. Appeal dismissed. Final ruling 1207/2017.
Next
procedural
deadline
Currently
not
established
February
20, 2018
Finalized
Finalized
76
77
3595/279/2016 -
Piatra Neamt
Court of Law
claims
SC Accent Service
SRL
Romgaz
11,395.30 Payment of equivalent value of car repair services for cars in Romgaz
property. Allows the request of Accent Service as per Ruling
1170/2017 (final).
Finalized
5243/257/2016 -
Medias Court of
Law
Complaint of violation
Romgaz
ANRE
14
Complaint of violation
to Offence Report no.
relation
87670/December 14, 2016.Complaint dismissed. Appeal filed. Appeal
dismissed. Ruling 1174/2017.
in
Finalized
No.
78
File No./ Court of
Law
5217/257/2016
Medias Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Complaint of violation
Romgaz
ANRE
Complaint of violation
to Offence Report no.
relation
87105/December 12, 2016. Complaint allowed. Appeal filed. Ruling
postponed. Appeal allowed. Modifies the appeal ruling – the complaint
of violation is dismissed. Final Ruling 1170/2017.
in
Next
procedural
deadline
Finalized
35304/3/2016 -
Bucharest Court
of Law
Insolvency
Romgaz: creditor
SC Electrocentrale
Bucuresti SA: debitor
569,945,968.48
Insolvency – table of receivables was filed. Challenge was filed. Allows
the challenge of debtor DistrigazSud Retele. Appeal may be filed within
7 days from its publication in the Official Journal of Romania.
Term not
established
2625/2017
Bucharest Court
of Appeal
Insolvency
Romgaz: creditor -
appelant
SC Electrocentrale
Bucuresti SA: debtor-
appelant
Challenge of table of receivables
January 30,
2018
6909/2017
Bucharest Court
of Appeal
Insolvency
Romgaz: creditor-
claimant in revision
SC Electrocentrale
Bucuresti SA: debtor-
Motion for revision of appeal Ruling 1239/2017 whereby the court
compels Romgaz not the change, suspend or to temporary decline the
supply of gas to the debtor.
Not
established
79
80
81
82
341/257/2017-
Medias Court of
Law
Complaint of violation
Romgaz -
complainant
83
1582/85/2017 –
Sibiu County
Court of Law
Claims
Ecaterina Popescu,
former member of
Romgaz Board -
defendant
50,000 Complaint of violation. Complaint dismissed. Ruling 1332/2017. Appeal
filed. Appeal dismissed by the complainant is dismissed. Final Ruling
1519/2017
Finalized
81,267.96 The defendant requests the payment of RON 81,267.96 as damages
for the sudden and abusive revocation of her mandate as member of
the board. On October 4, 2017 the cross examining was allowed
(suggested by the defendant). Ruling 790/2017 partly allowed the
defendant’s claim and compelled Romgaz to payment of damages of
RON 72.630 and of RON 2,552 as court expenses. Romgaz to file an
appeal by February 09, 2018 against the aforementioned Ruling.
Autoritatea Nationala
de Reglementare in
Domeniul Energiei
(Romanian National
Regulatory Authority
for Energy)-
respondent
Romgaz - plaintiff
15
Case
Plaintiff
Defendant
Amount
(RON)
Description
No.
84
File No./ Court of
Law
2093/102/2016 –
Alba Iulia Court of
Appeal
85
2806/85/2017-
Sibiu County
Court of Law
Annulment of act
Trade Union
Sindicatul Liber
SNGN ROMGAZ
SA- complainant
Romgaz - respondent
Claims – Labor-related
litigation
Pepene Laurentiu -
plaintiff
Romgaz – Suc.
Medias - defendant
86
87
3129/85/2017
- Sibiu County
Court of Law
207/102/2017
Mures Court of
Law
Challenge of
termination of
employment
notice/decision
Monetary rights
Iakab Zoltan -
plaintiff
ROMGAZ
Suc.Medias –
defendant
Next
procedural
deadline
Finalized
On January 10, 2017 the court declined its competency in favor of
Sibiu County Court of Law. The ruling is appealed. Final settlement
resulting from dismissal of appeal filed by the complainants
Claims unsettled retirement rights according to the Collective Labour
Agreement.
Allows the claim filed by the plaintiff. Compels the defendant to the
payment of retirement allowance for a gas industry service term of 45
years+. Ruling 1390/2017. Appeal may be filed within 10 days from the
communication.
Trial terminated – plaintiff deceased. Settlement in brief: case
reinstated and establishes the date of August 21, 2017 to assess the
stay of proceedings until the inclusion of the deceased’s legal
successors according to 412, art. 1 Criminal Procedure Code.
Stay of
proceedings
413 employees of
SPEE Iernut -
plaintiff
Romgaz - defendant
Revision of monetary rights from February 1, 2014 until the current
date. Stay of proceedings until de final settlement of case file
249/57/2016
Stay of
proceedings
88
4483/320/2017
impleader
Romgaz – plaintiff
FGA (Fondul de
garantare a
asiguratilor) -
defendant
Impleader request separated from case file no. 11776/320/2016.
Dismisses the impleader request filed by Romgaz against FGA as
inadmissible. Right to file an appeal within 30 days from the
communication. Ruling 5197/2017
89
1301/85/2017 –
Sibiu County
Court of Law
Additional works
Dafora S.A. plaintiff
Romgaz - defendant
1,332,000 Amendment of works contract no. 9468/16.09.2015 having as object
the performance of exploration drilling works at well 1 Pocoleni Nord,
Suceava county reflecting the extension of contract duration by 202.89
hours and the increase of contract price by RON 1,332,000 (plus VAT)
based on art. 14.1 of the Works Contract and on Art. 1270 New Civil
Procedure Code – to compel of the defendant to the above-mentioned
payment representing the equivalent value of additional performed
works due to the extension of contract term.
-subsidiarity, the adjustment of Contract no.9468/16.09.2015 as a
result of occurrence of hardship (art. 1271 par. 2 and 3 of the New Civil
Procedure Code) and in accordance with article 252 letter j) of GEO
16
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
34/2006 in force at the contract signing date;
- to compel the defendant to pay RON 1,332,000 (plus VAT)
representing the equivalent value of additional performed works due to
the extension of contract term.
A specialized expertise in the oil and gas filed is ordered. On January
16, 2018, the court postpones ruling.
90
2158/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
163,164 Romgaz – garnishee
91
2157/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
163,164 Romgaz – garnishee
92
2154/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
163,164 Romgaz – garnishee
93
2156/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
131,305.83 Romgaz – garnishee
94
2153/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
163,164 Romgaz – garnishee
17
Next
procedural
deadline
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
No.
95
File No./ Court of
Law
2152/257/2015
Medias Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
131,305.83 Romgaz – garnishee
96
2018/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
5,012.08 Romgaz – garnishee
97
2155/257/2015
Medias Court of
Law
Validation of
garnishment
Drilling Equipment
SRL – Creditor
Dafora SA – Debtor
163,164 Romgaz – garnishee
98
2097/257/2015
Medias Court of
Law
Validation of
garnishment
SC Macro-Tur –
Creditor
Dafora SA – Debtor
8,437.98 Romgaz – garnishee
99
2095/257/2015
Medias Court of
Law
Validation of
garnishment
SC Macro-Tur –
Creditor
Dafora SA – Debtor
40,000 Romgaz – garnishee
100
461/1371/2016 –
Mures
Commercial Court
of Law
Insolvency
Romgaz: creditor
SC InstaService SRL:
debtor
275,535.60
Insolvency proceeding.
18
Next
procedural
deadline
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
stay of
proceedings
resulting
from the
debtor’s
insolvency
February
28, 2018
File No./ Court of
Law
589/102/2017 –
Mures County
Court of Law
No.
101
102
103
5978/317/2016
Tg. Carbunesti
Court of Law
104
275/257/2017-
competency
declined to Mures
County Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Monetary rights
Romgaz – STTM
Tg. Mures- plaintiff
Negrea Alexandru -
defendant
insolvency
696/1371/2016 –
Tg. Mures
Commercial Court
of Law
Romgaz- Suc. Tg
Mures-creditor
SC Best
InstalGas&Water SRL
- debtor
Claims-damages
Durla Sabina -
plaintiff
Romgaz-Suc. Tg.
Mures - defendant
Not specified Compensation for loss of land usage during 2015-2016 to be set by
judicial expertise. No expertise reports were filed.
Claims
SC Agmus S.A. Iasi
– plaintiff
Romgaz-Suc. Tg.
Mures - defendant
Next
procedural
deadline
Term for
appeal not
established
March 8,
2018
February
14, 2018
-
-
14,048.62 Action in patrimonial liability of the operative employee for the damage
of the company, established at inventory. Ruling 496/2017 dismisses
civil action. Allows the defendant’s counterclaim. (The plaintiff is
compelled to order in favor of the defendant the release of the entire
amount retained as warranty, namely RON 1,500, as court expenses,
dismissing other claims in connection with court expenses.
317,66 The initial receivables amounted RON 1,214,940.44. Subsequently, the
debtor performed also the outstanding works in the contract and the
late payment penalties were recovered from the contract performance
warranty. The remaining difference is RON 317.66.
52,332.77 The claims consist of contract performance warranty and penalties.
Also court fees were requested, which are not specified. The contract
performance was released and the plaintiff withdrew the legal action
before the declination of competency.
Settled in the court of first instance. According to Ruling 666/2017
allowed the defense of lack of passive capacity to stand trial of
Romgaz and dismissed payment ordinance request of Agmus as being
introduced against a party with no passive capacity to stand trial. The
Ruling was communicated on September 20, 2017 and may be
attacked by request for annulment.
17,795 The amount was not paid during March 2015-September 2016. Ruling
4095/2017 dismissed the garnishment validation request filed by the
creditor (insolvent) through B.E.J. Ursulescu Floarea as official receiver
against Cozos Petru – debtor – and Romgaz-Suc. Tg. Mures –
garnishee due to late submission. The ruling was communicated.
Appeal can be filed.
9,181.48 The amount represents compensation for the loss of land usage 2014-
2016 and costs in connection with the enforcement. Settled in the court
of first instance. Request dismissed. Right to file an appeal.
105
1517/320/2017-
Tg. Mures Court
of Law
Validation of
garnishment
106
4009/320/2017 –
Tg. Mures Court
of Law
Challenge on
enforcement
SC Agropetruvlad
Tg. Mures – creditor
and B.E.J.
Ursulescu Floarea,
Tg. Mures
Romgaz-Suc. Tg.
Mures-challenger-
debtor
Romgaz- Suc. Tg.
Mures - garnishee
B.E.J. Daianu
Gheorghe –
respondent and
Daianu Maria
19
Next
procedural
deadline
-
Not
established
No.
107
File No./ Court of
Law
1453/330/2017 –
Urziceni Court of
Law
108 Criminal Case file
3212/257/2017 –
Medias Court of
Law
109
5202/257/2016 /
Medias Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Complaint of violation
Romgaz-Suc.Tg.
Mures - petitioner
Politia Urziceni -
respondent
Defendants (14)
Dan Ioan, Podar
Nicolae, Popa
Nicolae, Serban
Vasile Florin,
Moldovan Sorin,
Manciu Ioan,
Dragomir Vicentiu
Catalin, Chis Ciprian ,
Gyorke Aladar,
Morariu Ovidiu Pavel,
Biro Mihai, Nicola
Lucian, Marinescu
Alexandru Mircea,
Moldovan Claudiu
Liviu
Bordi Adrian -
defendant
Medias Court of
Law Prosecutor’s
Office – Romgaz
SIRCOSS – injured
party
Medias Court of
Law - Prosecutor’s
Office
Romgaz –
SIRCOSS – injured
party
Embezzlement –
continuing form and
accessory to
embezzlement –
continuing form (Art.
295 par. 1 Criminal
Code with the
application of Art. 35
par. 1 Criminal Code
art. 48 par. 1 Criminal
Code in relation to art.
295 par. 1 Criminal
Code
Medias Court of Law -
Prosecutor’s Office
concluded an
agreement of admission
of guilt with the
defendant Bordi Adrian,
investigated for the
criminal offence of
complicity to
embezzlement in
continuing form. The
prosecutor refers the
case to the competent
court of first instance,
Medias Court of Law.
20
2,000 Complaint of violation against the Record of Findings. Settled in the
court of first instance. The case was scheduled for trial on August 16,
2017 the ruling being postponed to August 23, 2017 when Ruling
1143/2017 allowed the complaint of violation and annulled the Record
of Findings PILY 06179 of March 28, 2017. Consequently, the
petitioner was relieved from paying the RON 2,000 fine. The ruling was
not communicated and appeal can be filed.
The criminal prosecution represented the scope of case file no.
1278/P/2015 filed with Medias Court of Law Prosecutor’s Office –
embezzlement.
The case was pending before the preliminary chamber. On October 27,
2017 the commencement of trial was ordered.
the defendant, and appeal allowed
Medias Court of Law dismissed the agreement of admission of guilt by
Ruling 10/2017. Ruling appealed by the Medias Court of Law -
in
Prosecutor’s Office and
20.04.2017, thus admitting the agreement of admission. Alba-Iulia
Court of Appeal allowed the appeal and the agreement of admission,
respectively. The injured party has not concluded with the defendant a
the civil action.
mediation or
Depending on the investigations made by the Medias Court of Law -
Prosecutor’s Office regarding the reintroduction in the main file
1278/P/2015 or concluding of a new agreement, corresponding actions
shall be taken. After the appeal ruling will be communicated, it is
necessary to file a civil action to recovery the damage suffered by the
company because the injured party and the defendant have not
concluded any mediation or transaction agreement regarding the civil
action. Awaited is taking of evidence under File 3212/257/2017 to be
transaction agreement regarding
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Next
procedural
deadline
used in this case as proof of damage cause by the defendant.
Romgaz –
SIRCOSS – injured
party
Lorincz Levente -
defendant
Romgaz –
SIRCOSS – injured
party
Dragomir Vicentiu -
defendant
110
5203/257/2016 /
Medias Court of
Law
111
5240/257/2016
Medias Court of
Law
Medias Court of Law -
Prosecutor’s Office
concluded an
agreement of admission
of guilt with the
defendant Bordi Adrian,
investigated for the
criminal offence of
complicity to
embezzlement in
continuing form
Medias Court of Law -
Prosecutor’s Office
concluded an
agreement of admission
of guilt with the
defendant Dragomir
Vicentiu, investigated
for the criminal offence
of complicity to
embezzlement in
continuing form
transaction agreement regarding
the defendant, and appeal allowed
Medias Court of Law dismissed the agreement of admission of guilt by
Ruling 10/2017. Ruling appealed by the Medias Court of Law -
in
Prosecutor’s Office and
20.04.2017, thus admitting the agreement of admission. Alba-Iulia
Court of Appeal allowed the appeal and the agreement of admission,
respectively. The injured party has not concluded with the defendant a
mediation or
the civil action.
Depending on the investigations made by the Medias Court of Law -
Prosecutor’s Office regarding the reintroduction in the main file
1278/P/2015 or concluding of a new agreement, corresponding actions
shall be taken. After the appeal ruling will be communicated, it is
necessary to file a civil action to recovery the damage suffered by the
company because the injured party and the defendant have not
concluded any mediation or transaction agreement regarding the civil
action. Awaited is taking of evidence under File 3212/257/2017 to be
used in this case as proof of damage cause by the defendant.
Medias Court of Law - Prosecutor’s Office has concluded an
agreement of admission of guilt with the defendant Dragomir Vicentiu,
investigated for the criminal offence of complicity to embezzlement in a
continued form. The prosecutor referred the case to the competent
court of first instance for trial, i.e. the Medias Court of Law, and that
action is included in Case File 5240/257/2016. Medias Court of Law
dismissed the agreement of admission by Ruling 10/2017. Ruling
appealed by the Medias Court of Law - Prosecutor’s Office and the
defendant, and appeal dismissed in 12.04.2017, thus dismissing the
agreement of admission. Communication of ruling is awaited.
The injured party has not concluded with the defendant a mediation or
transaction agreement regarding the civil action, and depending on the
investigations made by the Medias Court of Law - Prosecutor’s Office
regarding the reintroduction in the main file 1278/P/2015 or concluding
a new agreement, corresponding actions shall be taken.
21
No.
112
File No./ Court of
Law
5223/257/2016
Medias Court of
Law
113
928/85/2016
County Court of
Sibiu
Case
Plaintiff
Defendant
Amount
(RON)
Description
Next
procedural
deadline
Medias Court of Law -
Prosecutor’s Office
concluded an
agreement of admission
of guilt with the
defendant Morariu
Ovidiu Pavel,
investigated for the
criminal offence of
complicity to
embezzlement in
continuing form
Labor related litigation
Challenge of dismissal
decision
Romgaz –
SIRCOSS – injured
party
Morariu Ovidiu Pavel
defendant
for
investigated
the criminal offence of complicity
The Medias Court of Law - Prosecutor’s Office has concluded an
agreement of admission of guilt with the defendant Morariu Ovidiu
Pavel,
to
embezzlement in continuing form. The prosecutor referred the case to
the competent court of first instance for trial, i.e. the Medias Court of
Law, and that action is included in Case File 5223/257/2016. Medias
Court of Law dismissed the agreement of admission by Ruling 2/2017.
The injured party has not concluded with the defendant a mediation or
transaction agreement regarding the civil action, and depending on the
investigations made by the Medias Court of Law - Prosecutor’s Office
regarding the reintroduction in the main file 1278/P/2015 or concluding
a new agreement, corresponding actions shall be taken.
Dan Ioan -
Challenger
Romgaz – SIRCOSS
- Respondent
On the hearing of September 05, 2016, the Court ordered the stay of
proceedings until the final settlement of the file, the ruling of which shall
be decisive in the settlement of this case.
Stay of
proceedings
114
927/85/2016
County Court of
Sibiu
Labor related litigation
Challenge of dismissal
decision
Podar Nicolae -
Challenger
Romgaz – SIRCOSS
- Respondent
On the hearing of October 13, 2016, the Court ordered the stay of
proceedings until the final settlement of the file, the ruling of which shall
be decisive in the settlement of this case.
Stay of
proceedings
115
944/85/2016
County Court of
Sibiu
Labor related litigation
Challenge of dismissal
decision
Lorincz Levente -
Challenger
Romgaz – SIRCOSS
- Respondent
On the hearing of September 6, 2016, the Court ordered the stay of
proceedings until the final settlement of the file, the ruling of which shall
be decisive in the settlement of this case.
Stay of
proceedings
116
9741/320/2016
Tg. Mures Court
of Law. In appeal
Mures County
Court of Law
Complaint of violation
Annulment of record of
findings fining the
company for lack of
tachograph
ROMGAZ-
SIRCOSS –
Challenger
IPJ Mures -
Respondent
4,000
The Court of First Instance dismissed as unfounded the complaint of
violation filed by the complainant ROMGAZ, in contradiction with the
respondent IPJ Mures, and as a consequence it allows the Record of
Findings series PMSX no. 0123915/26.07.2016 as legally and duly
prepared. Right to appeal within 30 days of communication. Request
for appeal filed with Tg Mures Court of Law. Ruling made in
accordance with Art. 396 paragraph 2 Civil Procedure Code as of
27.01.2017. Ruling 468/ 2017. Appeal recorded on March 24, 2017.
Appeal to be settled at Mures County Court of Law. On the hearing of
December 15, 2017 the Court requested the provision of evidence of
22
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
documents belonging to IPJ Mures.
Next
procedural
deadline
117
2206/85/2009/ a1
2 Sibiu County
Court of Law
Challenging the
insolvency procedure.
Claims: performance
guarantee
SC GRANIT SRL by
liquidator CITR
S.P.R.L. -
Challenger
Romgaz – SIRCOSS /
Respondent
SC GRANIT SRL, being in the winding up process (bankruptcy) claims
the release of the remaining amount (30%) of the performance
guarantee issued in favor of SIRCOSS (valid guarantee) by Patria
Bank, the former NEXTEBANK S.A.
Obsolete
Ruling
549/18.09.2
017
118
3421/85/2017
Sibiu County
Court of Law
Labor related litigation
Recovery of undue
amounts
ROMGAZ-
SIRCOSS –
plaintiff
Deac Horatiu Teodor
(former employee) -
defendant
119
2307/257/2016
Medias Court of
Law
Complaint of violation
against a fine penalty
for lack of ROvignette
ROMGAZ-
SIRCOSS –
petitioner
CNADNR – CESTRIN
- Respondent
120
4253/257/2016
Medias Court of
Law
Complaint of violation
against a fine penalty
for lack of ROvignette
ROMGAZ-
SIRCOSS –
petitioner
CNAIR former
CNADNR – CESTRIN
- Respondent
121
122
1571/257/2017
Medias Court of
Law
under appeal
Sibiu County
Court of Law
3339/257/2017
Medias Court of
Law
Complaint of violation
against a fine penalty
for lack of ROvignette
ROMGAZ-
SIRCOSS –
petitioner
CNAIR former
CNADNR – CESTRIN
- Respondent
Complaint of violation
against a fine penalty
for lack of RO vignette
ROMGAZ-
SIRCOSS –
petitioner
CNAIR former
CNADNR – CESTRIN
- Respondent
Recovery of undue amount. Status of litigation: filed in June 06,2017.
Settled as of November 16, 2017 by allowing the action and compelling
Mr. Deac Horatiu to pay the amount of 2,746 RON. Ruling under
appeal.
Not
established
3,000 Claims: Record of Findings No R16 0294469/07.06.2016, mainly
annulment of fine or, alternatively, replacement of fine with warning.
Complaint dismissed by
Instance, Ruling
1374/10.10.2016.
Status of litigation: Appeal dismissed 29.06.2017 Ruling 855/2017
(Sibiu County Court of Law). Ruling communicated to the Economic
Department. Amounts are being recovered.
the Court of First
2,750 Claims: converting the fine penalty into warning, Record of Findings
R16 0416380/30.08.2016. Complaint dismissed by the Court of First
Instance, Ruling 2036/15.12.2016.
Status of litigation: Appeal dismissed on 21.09.2017. Ruling to be
communicated
250 Claims: converting the fine penalty into warning, Record of Findings
R17 0148052/21.02.2017.
Status of litigation: Complaint dismissed on 19.06.2017. Ruling
1434/2017 to be communicated. Appeal filed on 11.09.2017
Finalized;
amount of
RON 1,415
to be
recovered
January 26,
2018
2,750 Claims: converting the fine penalty into warning, Record of Findings
R17/0346605/13.06.2017. Complaint dismissed by the Court of First
Instance as of 04.10.2017, Ruling 1950/04.10.2017.
Ruling to be communicated. Right to appeal within 30 days of
communication. Appeal filed
Not
established
23
No.
123
File No./ Court of
Law
10073/63/2015*
Dolj County Court
of Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Claims
Paunescu Dan S.A.
- plaintiff
Transgaz, Romgaz
Ploiesti - defendant
EUR60,000
compensation payment for loss of land usage due to the undercrossing
by the ND 300 Clapeta-SDE pipeline
Next
procedural
deadline
January 16,
2018
124
31572/215/2015
Craiova Court of
Law
Claims
Dica Viorel -
plaintiff
Romgaz Ploiesti -
defendant
16,500 Compensation payment for loss of easement right due to the Ghercesti
Cluster 7. A topographic and agricultural expertise was ordered.
February
14, 2018
125
900/105/2016
Prahova
Claims
Romgaz Ploiesti -
plaintiff
Filip Gheorghe -
defendant
673 Labor related litigation to recover the amount of 673 RON; equivalent
value of undue days of leave. Action allowed
Enforcement
request filed
126
11305/215/2017-
Craiova Court of
Law
Establishment of
easement right+claims
Irimescu Simona-
plaintiff
Romgaz Suc. Ploiesti-
defendant
6,000 The plaintiff requests a right of access to the land where well 211
Ghercesti is located. She also claims that she cannot construct on this
privately-owned land because of existing pipelines.
February
12, 2018
127
53/1285/2017-
Cluj County
Specialized Court
of Law
Insolvency
Romgaz – Suc
Ploiesti - creditor
SC Energon
Power&Gas SRL -
debtor
318,135.78 Request for admission of RON 318,135.78 debt. The request filed by
the interim official receiver Societate Redresare Lichidare SPRL was
allowed and the simplified insolvency of SCE.P.&G. SRL as well as its
winding up was ordered.
March 13,
2018
128
28104/281/2016-
Ploiesti Court of
Law
Specific performance,
damages
Fundatia Semper
Fidelis Domus
Bucuresti - plaintiff
Romgaz – Suc.
Ploiesti - defendant
2,000/annum/pa
st 3 years
Request to deviate the gathering pipeline PN 150 Butimanu-Bilciuresti
and to demolish constructions erected without construction permit.
January 12,
2018
129
774/105/2016-
Prahova Court of
Law
Establishment of
occupational category
Stan Gheorghe -
plaintiff
Romgaz Suc. Ploiesti
SC Rompetrol S.A. -
defendant
Labor-related litigation for establishment of occupational category I.
Action was partially allowed. Action in relation to Romgaz was
dismissed. Ruling 2073/2017. Right to file an appeal.
24
No.
130
File No./ Court of
Law
3246/317/2017 Tg
Carbunesti Court
of Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Complaint of violation
Romgaz-Suc. Tg.
Mures – petitioner
I.T.M. Gorj -
respondent
3,500 Complaint of violation against the Record of Findings. Allows the
complaint. Right to file an appeal.
131
4199/85/2017 –
Sibiu County
Court of Law
claims
SC Develtor SRL-
plaintiff
Romgaz- defendant
132
1885/93/2015-
Ilfov County Court
of Law
Administrative court –
annulment of
administrative
document
Romgaz – Suc.
Ploiesti
SC Rompetrol S.A.
plaintiff
Ilfov Prefect’s Office
Cernica Commune
City Hall - defendants
2,920,371.34 The plaintiff requests the court to compel the defendant to the payment
of RON 2,920,371.34 (plus VAT) representing the equivalent value of
additional works performed by the plaintiff in phases II, III and IV and of
the pieces of equipment used additionally for the performance of works
at well Radeni 1, in accordance with the work contract no. 11197/2016
The plaintiff requested the partial annulment of the Prefect’s Oder no.
for a
the usage category
545/2009 whereby
10,730sq.m. land was established. The land relates to some of its
investment. This action was filed because due to the change from
“arable” usage category, proceedings relating to the certification of title
for the above-specified land could not be continued.
“pasture-land”
Next
procedural
deadline
Not
established
February
13, 2018
February
07, 2018
133
2279/327/2017
Tulcea County
Court of Law
134
4720/2/2017
Bucharest Court
of Appeal
claims
Romgaz - plaintiff
Crisan Commune City
Hall - defendant
10,000 The court was requested to establish the unilateral termination of
sponsorship contract no. 34667/2015 and the refund of RON 10,000.
January 29,
2018
Annulment of decision
Romgaz Petitioner
FGA - respondent
Romgaz filed a reexamination request given Minute no. 34667/2015
whereby the annulment of the challenge was ordered on grounds of
missing stamp duty.
February
20, 2018
135
7034/303/2014
Bucharest County
Court of Law
Garnishment validation
- appeal
Romgaz creditor
100,615,007.42
according to
Civil ruling
no.3279/2011 –
enforceable
According to Civil Ruling1492/2016, the courts of first instance allowed
the garnishment validation request filed by Romgaz against the
garnishee. Interagro and the garnishees filed an appeal. The Minute
dated November 2, 2016 ordered the stay of appeals on grounds of
non-compliance with all obligations established for the respondents.
The stay of proceedings is valid at present.
Stay of
proceedings
SC Interagro SA –
debtor
SC Energy
Cogeneration; Bio
Fuel Energy,
Fish&Fish Prodcom
Inter-Sport Assets,
Cotidianul Curentul,
Inter Tourism
Management, Power
Plant Fagaras,
25
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
Next
procedural
deadline
136
6838/303/2014
Bucharest County
Court of Law
Garnishment validation
- appeal
Romgaz creditor
Scorpions Construct,
Giurgiu
BiomassHet&Power,
Interagro Exploration -
garnishee
SC Interagro SA –
debtor
SC TM Power SA,
Asirom Leasing IFN,
Cotidianul Curentul,
IFN INT, Intercereal –
garnishee
137
34079/303/2015
Sector 6
Bucharest Court
of Law
Challenge on
enforcement
138
36095/3/2015
Bucharest County
Court of Law
insolvency
Interagro - petitioner Romgaz, Agricolferm
SRL, BEJ Cristian
Milos – respondent
Interagro - debtor
Romgaz – creditor
Creditors included
in the preliminary
table of receivables
139
8453/2/2016
Bucharest Court
of Appeal
Challenge of
administrative
document
Romgaz - claimant
ANAF Brasov -
respondent
26
100,615,007.42
according to
Civil ruling
no.3279/2011 –
enforceable
According to Civil Ruling 8486/2015, the court of first instance allowed
the garnishment validation request filed by Romgaz against the
garnishee. Interagro and the garnishees filed an appeal. The Minute
dated September 02, 2016 ordered the stay of file because against the
debtor insolvency proceedings were initiated according to case file
36095/3/2015. The stay of proceedings is valid at present.
Stay of
proceedings
100,615,007.42
according to
Civil ruling
no.3279/2011 –
enforceable
Challenge on enforcement against the tendering minutes relating to the
construction located in Bucharest, sector 6, Apusului Str., no.50
belonging to the debtor concluded in the enforcement file no. 28/2014
of BEJ Cristian Milos. The request is found obsolete. Right to file a
recourse.
284,208,986.85 The receivable to be included in the body of creditors is of RON
284,208,986.85 and is included in the table of receivables. The
insolvency procedure is in observation phase. At the end of the fist
Creditors’ Assembly held on May 16, 2016, the Creditors’ Committee
was appointed formed by Pireus Bank, Romgaz, Banca Transilvania,
Intercereal and EON Energie.
CITR Ilfov subsidiary was conformed as Official Receiver.
Following the settlement of challenges to the preliminary table, the final
table is to be drafted and to make a decision regarding the debtor’s
reorganization or performance of bankruptcy procedures.
2,980,868 The Court of Appeal dismissed the summons on inadmissibility
grounds because of the unlawful statute of limitations to establish fiscal
obligations and because of lack of grounds for the remaining part.
(Ruling 1836/May 19, 2017). Against this decision, a recourse was filed
on May 25, 2017. At present the decision of the court of first instance is
not communicated. The memorandum containing the reasons for
recourse is to be drafted after the communication of the decision.
February
19, 2018
Not
established
Next
procedural
deadline
Stay of
proceedings
February
22, 2018
No.
140
141
File No./ Court of
Law
4271/85/2017
Bucharest Court
of Appeal
1692/1/2017/a1
High Court of
Cassation and
Justice
142
143
1692/1/2017/A1/a
1 High Court of
Cassation and
Justice
1980/1/2017
High Court of
Cassation and
Justice
144
1692/1/2017/a1.2
High Court of
Cassation and
Justice
Case
Plaintiff
Defendant
Amount
(RON)
Description
Tort liability
proceedings
Romgaz plaintiff
Piteiu Maria Iuliana,
Piteiu Vladimir –
defendants
282,630,330.49
(rough
estimation)
Tort liability proceedings initiated against the legal successors for
maintaining precautionary measures established
the criminal
prosecution file no. 146/D/P/2010 in relation to the property of the
deceased Marcel Adrian Piteiu
in
282,630,330.49
(rough
estimation)
Directions hearings. Ruling is postponed
Directions hearings
Romgaz-civil party
NICULAE IOAN
VIDEANU ADRIEAN -
MIREA MARIN -
ALESANDRU DAN-
VICTOR -
PALASCA VIOREL -
APAN IOANA -
KRAMER ALPAR -
TOTH FRANCISC -
STANCU LUCIAN
ADRIAN -
VEZA MARIUS
LEONTE -
IONASCU LUCIA -
SC INTERAGRO SA -
Maintaining
precautionary measures
Romgaz – civil party Piteiu Maria Iuliana,
Piteiu Vladimir –
defendants
Lifting precautionary
measures
Piteiu Maria Iuliana,
Piteiu Vladimir –
petitioners
Romgaz – civil party
282,630,330.49
(rough
estimation)
282,630,330.49
(rough
estimation)
Lifting precautionary
measures
Romgaz – civil party Barbu Florin Andrei
– petitioner
Interagro -defendant
282,630,330.49
(rough
estimation)
27
On the trial date of September 15, 2017, the file was enclosed in case
file no. 1980/2017.
On the trial date of September 15, 2017, the court dismissed as
unfounded the petitioner’s claim to lift precautionary measures (distrain
upon property) established by Ordinance 146/D/P/2010 of June 8,
2012 of the High Court of Cassation and Justice Prosecutor’s Office
and the request filed by Romgaz – civil party – for the establishment of
the same measures, due to loss of scope. The petitioner and the civil
party are each compelled to pay RON 100 as court fees. Final ruling.
Lifting precautionary measures. Dismisses the challenge filed by the
petitioner against the lifting of precautionary measures (distrain upon
property) established by Ordinance 146/D/P/2010 of September 2,
2016 of the High Court of Cassation and Justice – Criminal Offence
Investigation Department (…) regarding the construction of 32,500
No.
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
sq.m. located in Nanov, Teleorman County (…). Compels the petitioner
to the payment of RON 200 representing legal expenses. The RON
130 honorary for the appointed defense of Interagro is paid from the
Ministry of Justice funds. Ruling given in October 19, 2017. Final.
145
3098/2518/2017
Ludus Court of
Law
Complaint of violation
Romgaz-SPEE
Iernut - petitioner
ANRE - defendant
4,000 (half of
minimum range
of value)
Complaint of violation against Record of Findings 84958/2017, fine 50
000 art. 93 par (2) point 2, letter a) of Law 123/2012, for “non-
transmittal of data requested correctly and completely”
146
4270/102/2017
Mures County
Court of Law
Damages
Negrea Alexandru
Stelian - plaintiff
Romgaz STTM -
defendant
147
32542/3/2017
Bucharest County
Court of Law
claims
Romgaz - plaintiff
SC C-Gaz &Energy
Distributie SRL
Bucuresti –defendant
30,000 The plaintiff filed a civil action to compel Romgaz STTM to the payment
of RON 30,000 as civil damages for the moral prejudice and to relating
legal interest from the date of filing the action until the actual payment
thereof. The court set the first trial date.
1,109,398.89 Romgaz requests that the defendant is compelled to:
-
-
-
taken, as outlined
Payment of RON 1,089,351.21 as unpaid price for gas
contracted and not
invoices
40401160/09.05.2017, no. 40401161/10.04.2017
Payment of RON 20,047.68 as legal interest relating to the
debit calculated until July 31, 2017 and further on the
payment of legal interest until the full restitution of the main
debit.
Payment of legal expenses.
in
Next
procedural
deadline
File
recorded on
December
28/2017
February
20, 2018
March 01,
2018
148
30568/325/2017
Timisoara Court
of Law
Claims
Romgaz-SIRCOSS
plaintiff
SC ETA
AUTOMATIZARI
INDUSTRIALE SRL
defendant
74,524.7 To compel the defendant to the payment of RON 74,524.7 plus late
payment penalties
Not
established
149
13745/63/2017
Dolj County Court
of Law
Reimbursement of
undue payment
Romgaz - plaintiff
SC Foraj Sonde SA
Craiova - defendant
10,972 (judicial
stamp duty)
Action filed for the reimbursement of undue payments Declines
competency in favor of Sibiu Court of Law.
No right to recourse/appeal. Ruling 35/2018
Not
established
28
No.
150
File No./ Court of
Law
Case
Plaintiff
Defendant
Amount
(RON)
Description
5362/317/2017
Tg Carbunesti
Court of Law
Action for recovery of
possession of real
property
Jianu Dumitru -
plaintiff
Romgaz Suc. Tg.
Mures - defendant
The summons was received on January 18, 2018. Within the legal 25
days term a statement of defense is to be filed.
Next
procedural
deadline
Not
established
29