Jan 9, 2019
Nadia Crisan, Daniela Serban, Author Article on Romania’s Offshore Opportunities
In a Jan. 3 article for Hart Energy’s E&P Magazine, McGuireWoods Consulting International Government Relations members, senior vice president Nadia Crisan, and strategic communications and public affairs coordinator, Daniela Serban, explored Romania’s offshore opportunities from a recently passed piece of legislation.
In 2018, a bill was passed by the Romanian parliament that included technical and fiscal provisions for offshore oil exploration activities, including exploration permits, transportation conditions and the availability of data.
“Parliament proposed a revised royalty and additional tax structure for offshore investments, allowing 30% of upstream investments to be deducted for calculation of additional tax purposes. Parliament also proposed that almost half of the offshore production be traded on the Romanian market, allowing Romania to establish a trading hub in Eastern Europe for natural gas,” said Crisan and Serban.
The bill has attracted strong interest from the international community due to existing large investments in the Black Sea. The U.S. has expressed interest as well, with U.S. Secretary of Energy Rick Perry reinforcing the U.S. as a stable, reliable energy partner at a summit in September 2018.
Currently, Romania is working with Bulgaria, Hungary and Austria on the BRUA natural gas pipeline, which will create a new export route for future natural gas in the Black Sea.
Crisan and Serban noted, “According to the European Bank for Reconstruction and Development, Romania’s participation in the BRUA pipeline will allow the country to transform from the country-specific low-pressure system into a high-pressure grid. This would allow access to future major gas infrastructure projects as well as access to Central European gas hubs. It also would help to service current and future Black Sea gas sources.”
Construction on the compressor stations for the pipeline has begun, but analysts are watching Hungary’s position and recent statements to pull out of BRUA. If the pipeline moves forward, it has the potential to make Romania one of the few energy-independent countries in the world, and providing a diversity of supply for Eastern Europe.
“As a member of the EU and NATO, and strategically located at the Black Sea, Romania offers abundant international business prospects—especially related to energy—that continue to grow,” Crisan and Serban said.