Hellenic Petroleum Group will implement an investment plan worth up to 1.0 billion euros in the next five years, Efstathios Tsotsoros, chairman of the group said addressing an IENE conference.
Tsotsoros said he expected the group’s significant profitability to continue in 2016, with EBITDA estimated at 700 million euros, from 758 million in 2015, despite low international margins and adverse conditions prevailing in the domestic market. He added that Hellenic Petroleum has already made a necessary financial restructuring to safeguard funding of this investment program. The group repaid and refinanced all of its debt for the period 2016-2018, worth around 1.5 billion euros, while an improvement in terms and conditions of previous bonds and loans it is expected to offer financial savings worth 30 million euros annually. Hellenic Petroleum returned to international capital markets recently, despite a prohibitive country risk, as a new bond issue was oversubscribed and the issue drained 375 million euros from the market at an interest rate of 4.875 pct from 8.0 pct of the previous bond loan.
Tsotsoros referred to a negative economic environment and rapid changes currently underway on an international level, to a geopolitical instability particularly in Southeastern Europe and noted that an economic crisis was evolving into a social and political crisis with visible risks of destabilizing the European structure.
Commenting on the fact that Greece lagged behind in all competitiveness and corruption indices among EU member-states and other Balkan countries, Tsotsoros said that the country needed a widespread consensus over a systematic reform and modernization of state bureaucracy and of regulatory framework.
He said that lower demand and increasing competition led to the closing down of more than 20 European refineries in the last decade and noted that Hellenic Petroleum Group implemented a wide investment plan to upgrade its refineries in Elefsis, Thessaloniki and Aspropyrgos, worth 2.5 billion euros, a plan which safeguarded its competitive presence.
He said the group’s strategic plan for the period 2016-2021 envisaged spending 400 million euros to improve energy efficiency and integrating new technologies to keep its refineries at the 25 pct of top competition units, revising commercial policy with the aim to expand the group’s presence in the domestic and international markets, implementing an integrated program to transform operations of sales units as by 2030 profits beyong oil products will cover 50 pct of total profits of fuel stations, according to estimates. The group will also plan investment actions and set medium-term targets for increased participation in renewable energy sources, electricity power and natural gas, along with implementing an investment plan on research and production of hydrocarbons.
Tsotsoros said early results from 3D research at the Patraikos Gulf confirmed the existence of primary geological targets which could have oil reserves up to 100 million barrels. He said the data processing continued and final decisions on executing a drilling in the region were expected by July 2017.