Romania-based Black Sea Oil & Gas (BSOG) will begin extracting natural gas from its $600 million offshore Romanian project in November, its CEO said on Feb. 23, but added further progress hinged on scrapping a disputed tax.
The additional tax on offshore projects is the last remnant of a series of price caps, taxes and export restrictions introduced two years ago by a previous center-left government.
The changes, most of which have since been reversed, blindsided gas producers, which have spend over a decade and billions of dollars preparing to tap Romania’s Black Sea gas.
Critics warn Romania’s window to tap its offshore reserves—which could diversify gas supplies in the region and help Romania phase out coal in line with EU targets—is narrowing.
BSOG, controlled by private equity firm Carlyle Group LP, has pressed ahead with its project to extract an estimated 10 Bcm of gas, believing the new center-right government will scrap the tax before November.
“We’ve got this perfect project, very well behaved as far as the EU is concerned,” CEO Mark Beacom told an energy seminar, adding BSOG’s project had a 10-15 year lifespan and that renewable projects could be developed around its infrastructure.
Meanwhile, OMV Petrom, majority-controlled by Austria’s OMV, has delayed a final investment decision on its much larger Neptun Deep offshore project.
Energy Minister Virgil Popescu said on Tuesday he was confident parliament would amend the offshore law and remove the additional tax before the summer recess. He also said OMV Petrom could start extracting gas from Neptun Deep by 2025.
OMV Petrom CEO Christina Verchere agreed it would take around four years after a final investment decision.
“So I think it is really important that we get going,” she told the seminar.
Speaking at the same event, European Commission Executive Vice President Frans Timmermans urged Romania to use its part of the EU’s 750 billion euro economic recovery fund to invest heavily in renewable energy.
“It’s important to advance to that and really see natural gas as a transition energy carrier and not as the end situation,” he said.
Recommended Reading
Entergy Picks Cresent Midstream to Develop $1B CCS for Gas-fired Power Plant
2024-09-20 - Crescent will work with SAMSUNG E&A and Honeywell on the project.
FERC Chair: DC Court ‘Erred’ by Vacating LNG Permits
2024-09-20 - Throwing out the permit for Williams’ operational REA project in the mid-Atlantic region was a mistake that could cost people “desperately” reliant on it, Chairman Willie Phillips said.
Golar LNG Enters $1.6B EPC Agreement for FLNG Project
2024-09-18 - Golar said the floating LNG vessel has a liquefaction capacity of 3.5 million tons of LNG per annum and is expected to be delivered in fourth-quarter 2027.
Bayou Midstream Secures New Equity Commitment from EIV Capital
2024-09-18 - Bayou Midstream II’s commitment from EIV Capital follows Bayou’s predecessor company's successful exit of Bakken infrastructure in 2024 to Bridger Pipeline.
Energy Transfer Says La Porte Pipeline Fire is Burning Itself Out
2024-09-18 - Analysts said they suspect that the pipeline is Energy Transfer’s Justice pipeline, and that news of the blaze has sent prices of propane and butane up since markets closed on Sept. 13.