Page 6 - Euroil Week 32 2019

EurOil COMMENTARY EurOil
Romania launches first
oil and gas licensing
round in decade
Unattractive taxation and regulation, as well as resulting delays at Neptun Deep, could sap interest in Romania’s upstream
ROMANIA
WHAT:
Romania has launched its 11th oil and gas licensing round.
WHY:
Authorities are looking to award 22 onshore and 6 offshore blocks.
WHAT NEXT:
Investors could be deterred by recent policy changes.
ROMANIA has kickstarted its long-awaited 11th oil and gas licensing round, as it looks to trigger a next wave of investment in exploration and reverse decades of production decline. But recent changes in regulation and taxation risk undermining the tender’s success.
e National Agency for Mineral Resources of Romania (NAMR) has invited bids for 22 onshore and six o shore blocks ranging from 700 and 1,100 square km in size – its rst o ering since the 10th licensing round in 2009-2010. e deadline for bids is late November, with awards likely to be announced the following month. Authorities will then have 15 days to initiate con- tract talks, which will run on for no more than nine months.
Romania is one of Europe’s oldest hydro- carbon producers, drilling its first oil wells northeast of Bucharest in 1857. Its oil pro- duction peaked at 500,000 barrels per day in 1976, while gas extraction reached an all-time high of 36bn cubic metres per year in 1983.
Today, the country produces only a fraction of this amount at mostly mature onshore elds, including 80,000 bpd of oil and 10.3 bcm per year of gas.
However, the industry has undergone some- thing of a revival over the past decade, following the discovery of several large o shore gas elds. e largest of these Black Sea projects is Neptun Deep, where ExxonMobil and the Romanian arm of Austria’s OMV, OMV Petrom, plan to exploit 84bcm of resources. Romania has hopes of selling this gas overseas.
Pros & cons
Romania’s upstream sector has many attrac- tive aspects. e country has proven reserves – estimated by BP at just over 100bcm of gas and 600mn barrels of oil. And as an established producer with a proli c history, it has well-de- veloped infrastructure to transport oil and gas from elds to markets, as well as a capable ser- vice sector.
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w w w . N E W S B A S E . c o m Week 32 15•August•2019