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EurOil COMMENTARY EurOil

plea. In September, BSOG CEO Mark Beacon 2018, is trailing by six points.
said in a meeting with Romanian Prime Min- The government will need to back-track
ister Ludovic Orban that the company would on other legislation, including a law passed in
need “fair taxation” before starting production February that enables it to refuse granting new
at Midia. The project is currently due to start up exploration and production licences to non-EU
in mid-2021. companies, and even terminate existing licences.
Romania launched a licensing round for
onshore and offshore blocks last year, a decade Markets
after its previous round. But investor appetite If and when extra Romanian gas production
appears somewhat muted, with low domestic does come online, it will need a market.
gas prices and regulatory uncertainty the likely At home Romania, like many of its neigh-
causes. bours, wants to replace coal in its power gener-
Romanian authorities appear to have recog- ation sector with a mix of gas and renewables.
nised the damage their policies have caused, with Specifically, it has plans to replace some 1.3 GW
a parliamentary committee voting in late August of unprofitable coal-fired capacity with several
to repeal the negative changes in legislation. But gas-powered and solar plants. It also wants to
the revisions are yet to become law. The fact that expand the use of gas in heating, at the expense
Orban’s administration, which supports encour- of biomass use.
aging offshore investment, rules as a minority Overseas markets will also open up after the
government, has not helped matters. commissioning of the first leg of the EU-backed
“We have held discussions with Black Sea Bulgaria-Romania-Hungary-Austria (BRUA)
producers and investors, to whom we promised pipeline, anticipated later this year. The pipeline
that we would improve the offshore legislation will have an initial capacity of 1.75 bcm per year.
immediately after we have another structure in Romania is also near to completing an exten-
Parliament,” Niculae Havrilet, State Secretary at sion of a pipeline running into Moldova, which
the Romanian Energy Ministry, said last month. will enable the country to ship up to 1.5 bcm per
“Thus, the investors will be able to recover their year of gas to the Moldovan capital Chisinau and
investments by working with stable, predict- the surrounding area. And it also has plans for a
able and, most importantly, non-retroactive 1.6 bcm per year interconnector to Serbia.
legislation.” The BRUA pipeline could be expanded
The elections are scheduled for December under a second phase, but not unless new
6, with Orban’s National Liberal Party (PNL) Romanian gas fields are developed. But this
currently on track to win just under a third of is unlikely to happen unless the government
votes. Its main rival, the Social Democratic Party takes the steps necessary for making invest-
(SDP), which pushed for the offshore law in ment attractive. ™

Week 47 26•November•2020 www. NEWSBASE .com P5