Granting of Exploration Licenses Spurs Romanian Protests

Recent weeks have seen Romanians take to the streets in opposition to shale gas exploration.

Much of the attention has been focused on the activities of Chevron Corp. at the onshore EV2 Barlad concession, which covers an area of 1.6 million acres (6,350 sq km) in the northeast of the country, near Moldova. The multinational intends to start the process for drilling for shale gas in the area of Barlad by the second half of this year.

However, less focus has been placed on the activity and of the granting of requests from the various players interested in shale gas exploration following the end of the moratorium imposed by the Romanian Government, which was in place until December 2012.

In this context, the beginning of the New Year was marked from the Romanian government of five new license agreements for exploration, development, and exploitation by the National Agency for Mineral Resources. The five approved agreements are:

• Agreement in the perimeter EX-2 TRIA, closed between National Agency for Mineral Resources and East West Petroleum Corp;
• Agreement in the perimeter EX-11 Buzias, closed between National Agency for Mineral Resources and Universal Premium SA;
• Agreement in the perimeter EX-6 Curtici, closed between National Agency for Mineral Resources and Mol Hungarian Oil and Gas Public Limited Company together with SC Expert Petroleum SRL;
• Agreement in the perimeter EX-4 Tulca, closed between National Agency for Mineral Resources and Clara Petroleum LTD;
• Agreement in the perimeter EX-9 Paulis, closed between National Agency for Mineral Resources and Universal Premium SA.

The agreements, under Oil Law no. 238/ 2004, do not distinguish between conventional or unconventional resources. Interestingly, it appears that the aforementioned licenses were granted on December 4th, and published in the Official Gazette on December 12th ("Monitorul Oficial no 838 din 12 Decembrie 2012"), while shale gas exploration was still under moratorium, according to the public commitment of Prime Minister Victor Ponta.

One of these agreements,  between the National Agency for Mineral Resources and Canadian East West Petroleum Corp, has given rise to a series of protests by nearby residents, when company officials announced that they are considering drilling mid-2013 on the EX-Tria Concession, located in Bihor County.

The EX-Tria Concession was one of four Romanian concessions awarded to the East West, for which it subsequently entered into a farmout agreement with Naftna Industrija Srbije a. d. Novi Sad (“NIS”), the Serbian subsidiary Russia’s GazpromNeft.

According to a statement by company officials “East West Petroleum is pleased to announce that it has received the final approval from the Government in Romania to begin operations on the 1,000 square km EX-2 Tria Concession in western Romania.”

The statement also mentions that according to field studies made by the company, “there is information that a large amount of shale gas might exist in the areas controlled by East West Petroleum.”

The announcement raised concerns amongst the residents of Santmartin, who fear the prospects of hydraulic fracturing activities near the village.

Village officials denounced the lack of communication with East West and with senior governmen. According to County officials, they learned of the license grants by the National Agency for Mineral Resources when the local media inquired the subject of shale gas interest in the area. Officals said that East West provided no official notice.

The Sanmartin community, under the signature of the local mayor, sent a memorandum to the Romanian Government and Prime Minister Ponta expressing concerns on the potential danger of shale gas exploitations to the area. The memorandum was also signed and supported by neighboring villages such as Felix and 1 Mai.

Representatives of the local communities underlined that shale gas exploration was certainly not compatible with the tourism in the Baile Felix and Baile 1 Mai resort areas, and undermines the thermal potential in the area perimeter.  The Mayor of Santmartin, Lucian Popus and the Deputy Mayor of Felix, Nicolae Leuce, warned of the potential dangers posed by the shale gas exploitation to the hydropathic tourism in the Oradia area, known for its thermal baths unique to the North-West region of Romania.

Citizen representatives expressed that a clear decision was required for the future of area: oil and gas fields or hydropathic tourism?

“Either we want tourism or we want oil and gas. The two do not go together,” said curator of the Tarii Crisurilor Museum, Radu Huza,  custodian of the Natural Reservation Paraul Petea from Baile 1 Mai area.

The issue of shale gas is mentioned in the measure plan proposed by the Museum for the rescue of the Ochiul Mare Lake with water lilies existing in the Baile 1 Mai region. Among the 15 measures proposed by the Museum to save the thermal lake and filed at the Bihor Prefecture, is: “the interdiction of exploration/exploitation works by drilling for useful mineral substances (oil, shale gas, etc) in the perimeter of the underground thermal waters 1 Mai – Felix.”

In a letter to the prefect, Claudiu Pop, the curators explained their demand to forbid drilling works:

“The National Agency for Mineral Resources plans to lease prospecting/exploration/exploitation perimeters in the region Baile Felix – Baile 1 Mai for oil and shale gas, by high depth drilling. Besides the high risk of damage to the thermal deposit, the drilling fields that will emerge in the area will change the local landscape and scenery. The people from Sanmartin together with the local administration and the Romanian Government must decide on the future development of the village.”

The Tria Concession debate exemplifies the disconnent between explorers and communities as well as local and central authorities, which in this case are both represented by politicians from USL, the current national governing coalition.

In a public debate , the president of the Bihor County Council, Cornel Popa, seemed disconcerted by the USL government attitude. Popa said that senior government had not discussed the issue with him, prior to approving both the Tria and Tulca concessions.

Recently hundreds of people gathered at the Bihor Prefecture to protest against the government decision to allow foreign companies to exploit shale gas in Bihor County, responding to the appeal of the Mayor Popus,to come and "protest against the intention of the authorities in Bucharest to destroy Baile Felix and Baile 1 Mai resorts."

“We will not give up our protests. If we must we will go to Bucharest and only until then we ask all Romanians to sign the online petition against shale gas exploitation in Bihor County and in Romania. We cannot disregard this country by knowingly allowing the destruction of our environment. All those who love Baile Felix, and not only, I ask to join our protest,” said Deputy Mayor Leuce.

Anger was evident amongst the villagers.

Mariana Cret, a nurse in Baile Felix, commented “we are capable to go to extremes with our protest. We will not give up! I was born and I live in Baile Felix. I have worked for 35 years as a nurse and I have worked with the thermal water. Who are they to come over us?”

Text: Silviu Molnar