Page 4 - EurOil Week 47

EurOil COMMENTARY EurOil

Romania loses another

offshore investor

The move comes amid continued frustration over offshore legislation passed
in 2018, which developers claim has made their projects unfeasible

ROMANIA THE Romanian Black Sea appears to have lost Bucharest’s ambition is to establish gas
another investor, with state-owned Romgaz exports by exploiting a number of Black Sea
WHAT: revealing to local press this month that its Rus- discoveries. But development over the years has
Panel no indent sian partner Lukoil wanted to exit the undevel- been slow, impeded by regulatory uncertainty
Panel indent oped EX-3-Trident block. and a lack of investor confidence. This mainly
Lukoil has an 87.8% stake in the block, centres around the government’s controversial
WHY: while Romgaz holds the remaining interest. offshore law introduced two years ago. Among
Panel no indent Initial exploratory work at the site in 2015 had other things, this law requires operators to sell
Panel indent indicated potential recoverable gas deposits of at least 50% of their future gas output on Roma-
around 30bn cubic metres. nian commodity platforms and imposes caps on
WHAT NEXT: The move comes amid continued frustration prices. They are also charged a windfall tax on
Panel no indent over offshore legislation passed in 2018, which additional revenues.
Panel indent developers claim has made their projects unfea- The impact on investor sentiment has been
sible. The government has promised to address all too clear.
the industry’s concerns after the country’s parlia- ExxonMobil and Austro-Romanian partner
mentary elections in early December. But con- OMV Petrom had initially hoped to take a final
sidering the bearish conditions on European gas investment decision (FID) in 2018 on Neptun
markets at present, this may be too little, too late. Deep, an 85 bcm gas resource. But they have yet
to take this step, citing poor government policies.
Legislatory obstacles Black Sea Oil & Gas (BSOG), a private-equity
Romanian gas production has been fairly stable vehicle backed by US fund Carlyle, did take an
over the past decade, amounting to 9.7 bcm in FID on another 10 bcm project Midia in Febru-
2019, according to BP data. This was enough to ary last year. However, it has repeatedly urged
meet the bulk of its demand, which came in at Roman authorities to repeal the legislation,
10.9 bcm. leaning on the US government for support in its

P4 www. NEWSBASE .com Week 47 26•November•2020