Romania to extract gas from the Black Sea
Romania to embark on ambitious project to extract natural gas from its Black Sea deep waters.
Roxana Vasile, 19.04.2022, 14:00
Asked when Romania will begin producing natural gas from the Black Sea, prime minister Nicolae Ciucă told Radio Romania: “soon”. This has become a matter of urgency given the war in Ukraine and the economic and commercial conflict between Russia and the European Union. Because of their dependency on imports of Russian gas, some EU member states are reluctant to toughen sanctions against the Kremlin. On the other hand, reducing dependence on Russian gas cannot be achieved from one day to the next, with the European Commission saying this may be possible by 2030, by which time alternative solutions must be found.
Romania is in the fortunate situation of being the least dependent on Russian gas among EU member states and of sitting on as yet untapped reserves of natural gas in the Black Sea. For years, economic analysts criticised the lack of a strategic vision and the legal uncertainty that prevented these deep water reserves from being exploited despite the fact that they would allow Romania to become completely independent and even export to other countries. It is against this backdrop that the Senate is this week beginning to debate a bill to amend the offshore law.
Cătălin Niţă, the executive director of the Oil and Gas Employers Association:
“At first sight, this is an improved version. We will most likely come up with our own amendments, but in principle we are happy that this bill has been unblocked, an important project for Romanias energy security and the future cost of gas for the Romanian people.”
The new bill provides for legislative stability throughout the exploitation process, which is estimated to last 20 years. 60% of the revenues will go to the Romanian state and 40% to investors. Also, Romania has pre-emption rights on the gas extracted, with only the surplus to be exported. The natural gas reserves in the Romanian deep water sector are estimated at 200 billion cubic metres, with the Neptune Deep field hosting the largest reserves. This development is owned by OMV Petrom and ExxonMobil, with Romgaz about to take over Exxons shares.
Exploitation works are in an advanced stage in the Midia sector, so Black Sea Oil & Gas will begin production this year. Prime minister Nicolae Ciucă explains:
“Theres a possibility we may begin to receive gas mid this year. There is already an investment made by Black Sea Oil & Gas, they already signed the documents, and theres a possibility we may provide one billion cubic metres of natural gas annually through this investment. Were expecting to begin producing gas in the Neptune Deep sector at the end of 2026 or the beginning of 2027.”
Romania thus hopes to become a provider of regional energy security.
