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Romania: The Black Sea gas projects will require large investments

According to Director of the National Agency for Mineral Resources (ANRM) Sorin Gal, the investments made so far in the Black Sea are of about 3.5 billion dollars, only in exploration. To exploit these resources and reach a peak of over 10 billion cubic meters per year it would mean investing at least 6-7 million dollars, he said.

Gal said that the Black Sea may become a small North Sea, as there are more than 200 billion cubic meters of gas fields here, but the extraction requires investments worth between 6 and 7 billion dollars.

In his opinion, the discoveries made in the Romanian Black Sea could rival those recently announced by Turkey. There are two big players in the Black Sea, the Lukoil – Romgaz and ExxonMobil – OMV Petrom consortia, both consortia have reached some discoveries that could rival the discovery announced by Turkey. So, the Black Sea seems to be a small North Sea, however, serious investments must be made.

Gal stressed that investors must have a double-digit profit, because no one will invest without such assurances. It is also very important how these investors will be taxed. If they are overtaxed, Romania will have expensive gas, which will not be competitive, and the price of gas will increase in the Romanian market, as the vast majority of existing deposits are depleted, with decreased production in the pandemic context more than the natural annual decline.

According to him, this reduction in upstream investments, where the number of drilled wells has dropped by 75 %, will lead to a further decline in production in the coming years, with an impact on the gas market.

 

 

 

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