Raiffeisen cuts Petrom target share price to RON 0.24

Raiffeisen's previous recommendation in connection with the Petrom shares was ‘keep'. Raiffeisen estimates that Petrom's profit in the upstream exploration and production segment will no longer cover losses incurred in its refining operations, reads a bank assessment presented yesterday.

Gas demand is also deemed to stay low on the Romanian market because of the recession affecting large natural gas consumers - the chemical industry in particular - and the modernization of refineries is not going to go according to the plan because of persistent adverse conditions, Raiffeisen specialists warn. Moreover, financial gains from international operations and hedging contracts will not be a substantial support for Petrom's financial circumstances. The only positive prospect is the expected contribution to profit by the electricity division and by the new oilfields which will not be registered before 2012, reads the Austrian bank's study.

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