Romania, one of the EU’s poorest members, could emerge as an unlikely challenger to Russia’s iron grip on eastern Europe’s energy supply, thanks to vast oil and gas reserves waiting to be tapped, experts say.
Its hydrocarbon riches already give Romania a high degree of energy self-sufficiency, but there are many more untapped reserves under the Black Sea, attracting the attention of the world’s oil and gas majors.
Some, including US giant ExxonMobil and Austria’s OMV Petrom, have started drilling in the Black Sea.
“Romania’s position as a potentially significant gas producer in this region is unique and the resources here may pose a threat to what has been mostly a Russian monopoly,” said Mark Beacom, CEO of Black Sea Oil & Gas, a company owned jointly by the Carlyle Group and the European Bank for Reconstruction and Development.
But the energy majors have put their ambitions on hold after Bucharest passed legislation that will tax revenues from offshore drilling and stipulate that half of output must be reserved for the domestic market — even though the country still lacks much of the infrastructure needed to distribute and consume it.
Romania currently produces 10.5 billion cubic metres of gas each year, largely onshore, and consumes 11-12 billion cubic metres, making it almost completely independent from Russian gas unlike its eastern European neighbours.
According to estimates, further untapped reserves of between 170 and 200 billion cubic metres lie deep in the Black Sea that could be extracted by 2040.
That represents the equivalent of Romania’s total annual consumption for 15 years, and four years’ consumption of a country such as France.
It was the former communist leader Nicolae Ceausescu who first launched an offshore drilling project in the Black Sea 50 years ago.
And now Romania could “become a regional hub and contribute to Europe’s energy security,” the energy ministry said.
Russia is one of the biggest suppliers of oil and gas to Europe, a stranglehold that the West has long tried to break.
“The volume of (offshore) reserves can turn Romania into the main EU gas producer, after the UK leaves the bloc,” Razvan Nicolescu, a consultant with Deloitte, said. Authorities have already started work on Romanian stretch of the BRUA pipeline, a 479-km artery, partly financed by the European Commission. — AFP