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
US EPA Expected to Drop Hydrogen from Power Plant Rule, Sources Say
2024-04-22 - The move reflects skepticism within the U.S. government that the technology will develop quickly enough to become a significant tool to decarbonize the electricity industry.
BWX Technologies Awarded $45B Contract to Manage Radioactive Cleanup
2024-03-05 - The U.S. Department of Energy’s Office of Environmental Management awarded nuclear technologies company BWX Technologies Inc. a contract worth up to $45 billion for environmental management at the Hanford Site.
Belcher: Our Leaders Should Embrace, Not Vilify, Certified Natural Gas
2024-03-18 - Recognition gained through gas certification verified by third-party auditors has led natural gas producers and midstream companies to voluntarily comply and often exceed compliance with regulatory requirements, including the EPA methane rule.
CERAWeek: Energy Secretary Defends LNG Pause Amid Industry Outcry
2024-03-18 - U.S. Energy Secretary Jennifer Granholm said she expects the review of LNG exports to be in the “rearview mirror” by next year.
Laredo Oil Settles Lawsuit with A&S Minerals, Erehwon
2024-03-12 - Laredo Oil said a confidential settlement agreement resolves a title dispute with Erehwon Oil & Gas LLC and A&S Minerals Development Co. LLC regarding mineral rights in Valley County, Montana.