The Romanian Association of Petroleum Exploration and Production Companies (ROPEPCA) welcomes the opinion of Competition Council President Bogdan Chiriţoiu, according to which the obligation to trade on the stock exchange, imposed on private operators, is not economically rational.
In a press release, ROPEPCA mentions a recent statement from the President of the Competition Council, who said: “the problem that we have in Romania is that the big electricity producers we have are state-owned, and the big state-owned companies are suspected of corruption. Hence, the prohibition that these companies can make long-term bilateral contracts, because we are afraid of what they would do, what would happen to these contracts if we let the big state producers complete them. […] We also impose this obligation to trade on the stock exchange on private operators. We cannot separate the issue of the big state producers from the rest of the industry and, so, we punish everybody with something that is not necessarily economically rational.”
ROPEPCA supports the Competition Council’s proposal to make an exception for private operators in the petroleum sector, but insists that such an exception should be applied to both offshore and onshore operators in order to avoid the creation of distortions of a competitive nature.
Bogdan Chiriţoiu also said that he agrees „with offshore gas exemptions, if we are told that the investments in offshore are of a different nature than those in onshore. I have nothing against creating a special rule for offshore. Wherever we do not have big state-owned companies, we need to show flexibility.”
ROPEPCA considers that offshore investments are not of a different nature than those in onshore, both of which being of very large sizes, with very long recovery period.
ROPEPCA’s acting president, Mark Wagley, states in the press release that “such an exception must be made in relation to trading of exactly the same product: natural gas. The manner in which it are produced must not be discriminated against, and an exception for private producers must cover both offshore and onshore operators.”
ROPEPCA brings together 17 of the most important holders of oil concession agreements concluded with the Romanian state. The members of the association hold most of the oil concession agreements for Romania’s onshore exploration, development and production blocks, representing cumulated investments of 650 million euros in 2016, a turnover of almost 2.9 billion euros, contributions to the state budget of 300 million, and are responsible for creating and maintaining 14,800 jobs.