THE CENTURY OF PETROL - Petroleum.cz

of Conoco, and Francesco Zofrea, Vice-
President of AgipPetroli.
In the spring of 1995, in parallel with the
negotiation process, Chemopetrol Litvínov
and Kauãuk Kralupy established âESKÁ
RAFINÉRSKÁ, a.s. with its head office in
Litvínov and with a share capital of CZK
3 million. Ivan Ottis became Chairman of
its three-member Board of Directors.
Negotiations on the six major specific issues
of the future activities of âeská rafinérská
were opened that same summer,
soon after the signing of the MFA. The negotiations
were conducted, on the one
side, by the future âeská rafinérská, i.e.
by officers of the Litvínov and Kralupy
refineries in collaboration with IOC
experts, and, on the other side, by the
remaining Czech entities, including Unipetrol,
Chemopetrol, Kauãuk, MERO and
âEPRO, and consultants and advisors for
the Czech side.
The following documents were prepared
and then, on 15th November 1995 signed,
in Prague’s Hrzánsk˘ Palace:
– Shareholders’ Agreement on the
Exercise of Shareholder Rights in
âeská rafinérská
– Shareholders’ Agreement on the
Purchase and Sale of âeská rafinérská’s
shares
– Memorandum of the Shareholders
and the Czech Government on the
Procedure for Selling the Shares of
âeská rafinérská.
These documents codified the major aspects
of the new company’s activities so
as to ensure that it would start working by
the end of 1995. The date of the transfer
of fixed assets to âeská rafinérská was set
at 31st December 1995. The new company
started its business as such on 1 January
1996, having acquired fixed assets
from the parent companies and bought
the operating capital of the stocks of petroleum,
intermediates, and finished products,
for which the company had opened
a bridge loan of CZK 200 million. All employees
of both refinery operations were
transferred to the new company.
At the General Meeting of âeská rafinérská’s
shareholders, held in February
1996, the Shareholders approved, within
the meaning of the relevant agreements,
the subscription to the new share issue
with a nominal value of USD 168 million
(CZK 4.5 billion) by AgipPetroli International
B.V., Conoco Energy Inc., and Shell
Overseas Investment B.V.
At that same General Meeting, Shareholders
approved an increase of the share
capital by the parent companies by CZK
4.6 billion and subscription to shares
worth CZK 4.5 billion. The subscription
was then effected on 25th March 1996.
The Board of Directors was expanded to
include seven members: Unipetrol nominated
4 members, including the Chairman,
and 3 members were nominated by
the foreign shareholders. A new Supervisory
Board was elected, consisting of
4 representatives of Unipetrol, 3 representatives
of the IOC and 3 representatives
of employees. The Unipetrol representative
was elected Chairman of the Supervisory
Board. The organisation structure
of the company consisted of 6 Divisions.
Members of the Board of Directors shared
responsibility for the following Divisions:
Financial, Commercial, Technical, General
Affairs, Planning and Development,
and Investment divisions.
ČESKÁ RAFINÉRSKÁ
During the first year of its existence as a
independent business entity, âeská rafinérská
focused its activities on building a
new organisation structure, strengthening
the company’s market position, developing
specific policies, and optimising petroleum
purchasing from diversified sources
depending on the development of
demand. The company introduced a pricing
policy based on the principle that
selling prices be determined according to
the changes in the inland premium in
Central Europe. Price modifications, first
made on monthly intervals, later on a
weekly basis, became a primary interest
of public attention.
In establishing the company, the Shareholders
defined three main areas for implementing
its five-year capital expenditure
programme, worth 480 million USD.
These were: stay-in-business, environmental
projects and development projects.
The projects planned by the company included
the following key objectives: increase
the production of motor fuels and
other types of fuel at the quality level
required after 2000; achieve the required
operational integrity of the production
plants and facilities; and meet the environmental
and labour safety standards.
If the new company were to operate at an
optimum, it would be necessary to estab-
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