Halliburton Consortium Upset at Exclusion from Petrom Sale

A consortium led by Halliburton said it was upset at the Romanian Government's decision to exclude it from the privatization sale of SNP Petrom.

Romania's Economy Ministry said last week only 11 of 15 investors who expressed interest in a 51 percent stake in Petrom, estimated by analysts to be worth around $1.0 billion, qualified to the next stage of the bidding.

The ministry selected U.S. firms Occidental Oil and Gas, ConocoPhilips and Alon Inc, Italy's ENI, Austria's OMV, Hungary's MOL, and Poland's PKN Orlen. Russia's TNK-BP and Gazprom, Greece's Hellenic Petroleum and Switzerland's Glencore were also allowed to remain in the race.

The ministry said however that Halliburton's consortium, which includes Britain's Regal Petroleum PLC and Romania's Tender SA, was disqualified as it did not meet its criteria. It did not elaborate.

"We received a letter from the ministry informing us that we were not on the shortlist, but no explanation," Tender SA President Ovidiu Tender said. He said the consortium sent a letter to the ministry demanding an explanation for the decision.

To qualify for the next stage, a consortium must have an annual turnover of over $1.3 billion, experience in the oil and gas sector for at least one member company and a bank guarantee letter for the leader of the consortium. The Halliburton consortium has a turnover of around $14 billion.

"The consortium met all the requirements," Tender said. "We considered fighting the decision in court, but Halliburton doesn't want to," he added. Tender said his company received offers from some of the qualified bidders to join forces, but was not likely to accept. "If Halliburton doesn't come, we don't want to associate with anyone else," Tender said.