Radio România Internațional

Tag: gas exploitation

  • Offshore law comes into effect

    Offshore law comes into effect

    Romania can start exploiting gas from the Black Sea after the offshore law, which regulates such operations, has been promulgated by the president Iohannis. Under the law, Romania will have priority in extracting the gas deposit, and the profit will be divided between the Romanian state, which will receive 60% and the investors that will get 40%. The first gas is to be extracted in June, under the project carried out in Midia by the company Black Sea Oil & Gas. Estimates show that one billion cubic meters will be delivered annually through this exploitation, thus covering 10% of Romanias needs. Since its adoption in the Chamber of Deputies, the Liberal energy minister Virgil Popescu said that the new regulation ensured stability, predictability and a friendly fiscal environment for investors, as well as a lower gas price for household consumers.



    The law provides for a set of measures on the stability of the tax and oil royalties regime, as well as for the elimination of additional taxation of incomes for sale prices at which investors do not make excess profits. Throughout the duration of the oil agreements regarding the deep offshore and onshore oil perimeters, the holders of the agreements shall have the right to freely market the hydrocarbons produced from the respective oil perimeters, at the prices and quantities established by them, under the national and European legislation in force.



    By way of exception, the Government, upon the proposal of the Energy Ministry, can introduce temporary price and sale restrictions for the amounts necessary for household consumption and for the producers of thermal energy destined for the population. One of the managers of Romgaz, a company with majority state-owned capital, told Bloomberg that Romania could accelerate its first deep-sea drilling project in the Black Sea, in the context of the natural gas crisis in Europe. Romgaz is a partner involved in the Neptun Deep project. The company, which has recently taken over from ExxonMobil its 50% stake in the Neptun Deep project, claims that it is possible that the project operator, the oil group OMV Petrom, may reassess the development of the project, with the increase in energy prices and construction costs.



    Even if Petrom has the last word, as an operator for the Neptun Deep project, the partners are considering the possibility of relying more on the existing infrastructure in the Black Sea and of dividing the project into two and even three phases, in order to bring the gas to the market earlier, said the Romgaz manager. “Production as part of the Neptun Deep project should not start later than 2026. That is the initial estimate in Exxons plans, but maybe we find a way to speed things up because we are aware of the need for European gas, he added. After the adoption of the Offshore Law, Romgaz and Petrom are to make a final investment decision regarding the Neptun Deep project by the end of 2022. (LS)

  • Senate passes Offshore Law

    Senate passes Offshore Law

    The plenum of the Romanian Senate has adopted amendments to the offshore law. Delayed for a long time, the law regulates the operations regarding the development and exploitation of oil deposits in the offshore perimeters, off the Romanian Black Sea Coast in the Black Sea, as well as of deep oil deposits in onshore perimeters. The bill amending the offshore law establishes the distribution of 40% of the profit obtained to the investors and 60% to the Romanian state, which has the right of pre-emption to gas acquisition. During the meeting, the Energy Minister, Virgil Popescu, highlighted that this law would ensure Romania’s gas security in case of an energy crisis, pointing out that Romania could also become a provider of regional energy security, after it will produce more than it will consume.



    He added that the first gas from the Black Sea could be extracted starting with the second half of this year. At the same time, the new law increases the investment deduction allowance from 30% to 40% of the total additional income tax. The senators of the Social Democratic Party (PSD), the National Liberal Party (PNL), the Democratic Union of Ethnic Hungarians in Romania (UDMR) and Save Romania Union (USR) voted in favor of the document. During the plenary debates, the leader of the Social Democrats, Radu Oprea, said that the law was good and necessary for all Romanian citizens, and the money coming from the gas exploitation will reach the local communities.



    Radu Oprea: “We have a war near Romania’s borders, we need gas, we need Black Sea Oil & Gas (USA) to be able to supply gas to the citizens of Romania starting next month. It means 10% of the gas that others in this room want to import from other countries. This is not possible and desirable for the Romanian economy, for the Romanian industry, and for the citizens of Romania.”



    The Alliance for the Union of Romanians (AUR) is the only party that has voted against this law, which they label as anti-national, and they have demanded that the exploitation of natural gas be done exclusively by Romanian companies.



    Senator Rodica Boancă: “AUR has voted against this national betrayal and against this plundering, which will lead to the exploitation and sale of resources of national and strategic importance, especially in an economic war that we are currently going through, and it is very clear that the price of gas will not decrease, we will not have a free energy market. “



    Romanias gas production has dropped in recent years, and 2021 brought high energy prices across Europe. The Romanian economic area of the Black Sea has reserves of over 200 billion cubic meters, an amount that could cover national consumption for the next 20 years. In 2019, in Romania, 79% of the total amount of natural gas was from domestic production, 8% imported from Russia and the remaining 13% from other countries. This in the context in which, in Finland and Macedonia, the gas is imported entirely from Russia, Latvia imports 93% Russian gas and Estonia 79%. Germany, Europes strongest economy, imports almost half of its natural gas from Russia and the other half from other countries. (LS)