Romania's oil refining system is producing hundreds of thousands of barrels more than it needs, and officials are trying to figure out what to do with all the excess.

One possibility under study would involve barter or processing deals with foreign companies.Romania's refining capacity is around 600,000 barrels a day. Domestic demand, however, is running at only about 154,000 b/d.

Actual throughput levels at most refineries are said to run at from 45 percent to 60 percent of installed capacity, and some were idled for several months last year.

Whether foreign interests could absorb some of the overproduction is still questionable. Foreign operators, approached with offers of barter or processing deals, have been less than enthusiastic because of high operating costs and uncertain profitability.

The excess capacity is the result government policy in the 1970s under which a series of refineries were built. The aim was to cut Romania's hard currency outlays by refining crude from Iran and Iraq in exchange for a percentage of the resulting products.

Although the plan succeeded for a time, the loss of cheap crude from the former Soviet Union and the exit of Iraqi crude from the world market eventually spelled its failure.

A holding company, Rafirom, is responsible for overseeing refining operations and for signing deals involving foreign investment. But the company is notoriously disorganized and the refineries nominally under its control in fact operate independently. The result is that most foreign companies deal directly with these.

The status of some deals with foreign firms remains uncertain. Government officials last year agreed with the National Iranian Oil Co. to process 340,000 b/d, which would have absorbed most of Romania's excess capacity. But that arrangement is stalled because of financing problems and questions about profitability.

Cornel Florae, deputy general director of the Romania's Ministry of Industry, said Iran is not expected to account for more than 16,000 b/d of Romanian refining this year.

The French company Total and London-based trader Mark Rich are among the most active foreign players in Romanian refining. They have jointly invested more than US$21 million in upgrading one distillation and vacuum unit.

Chevron has signed a deal to refine 30,000 b/d at the 140,000-b/d Pitesti refinery and Gotco has a deal for 40,000 b/d at the same facility, described by government officials as the most sophisticated facility in the country.

Most of these deals are viewed as chances to get a foothold in Romania rather than as major business ventures.

One uncertainty is whether the limited technology at the facilities will

allow a profitable operation. While most of the refineries were built within the last 10 to 15 years, their technology is relatively basic. Product quality is considered adequate, but there is little deep conversion capacity and yields in some cases are not competitive.

A more fundamental difficulty is a lack of significant markets in the region. Demand in Western Europe is currently satisfied under existing arrangements, and neighboring Eastern European countries offer no outlet for Romanian products.

As a consequence, many observers expect a number of refineries to close within the next few years.

''They simply do not need that much capacity, and I doubt if they will be able to find foreign companies that are interested in acquiring all of it

because (the refineries) are not terribly advanced or competitive," said one foreign oil executive in Bucharest.

Although reports have circulated that Saudi, Kuwaiti, Korean and Japanese investors have shown interest in buying into Romania's refining system, talks have been limited to the preliminary stage up to now.