GGP: Analysis - Massive Black Sea energy investments stumble into slow public decision-making process
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This is an excerpt from an article originally published by Business Review Romania on May 10, 2017.
Although Black Sea gas was touted as the main solution to help Romania reach energy sufficiency, the slow development of legislation to support risky offshore developments and protracted discussions over the new taxation framework for oil and gas deposits could hinder the country’s attractiveness to investors.
American oil major ExxonMobil and Austrian oil and gas producer OMV Petrom have invested more than EUR 1 billion in the Black Sea. The companies are jointly looking for gas off the Romanian coast, and although some gas deposits were discovered in the exploration stage, it is not clear if they will kick off commercial production in the coming years.
However, the minister of energy, Toma Petcu, suggested that the joint venture could start extracting gas from the Black Sea in 2020, by when the country should build the transport infrastructure.
Petcu said that the new BRUA gas pipeline (Bulgaria – Romania – Hungary – Austria) would bring Black Sea gas onshore, adding that this project must become operational by the end of this decade.
Although the authorities have been saying for years that they want new investments in the oil and gas sector, companies are still waiting for the updated taxation framework in this field in order to plan their next moves.
In the second quarter of this year, the Ministry of Economy should finish the new royalties’ law, which would also apply in the energy sector, according to the minister of finance, Viorel Stefan.
“The plan is to have a common regulation when we talk about the mechanism for establishing and collecting royalties, covering all natural resources, from gravel from the bottom of the water and natural spring water to, why not, petroleum, gas and mining exploitation,” Stefan told Mediafax newswire in April.
Ovidiu Posirca
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The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.