By stimulating capital investment in the O&G industry, Romania will both support the activity in sector, and simultaneously increase its state budget revenues, said Mark Wagley, ROPEPCA president, 2017 Energy Strategy Summit, in Bucharest, last week. “All the government has to do is to get out of the way and create a predictable and stable regime”, said ROPEPCA acting president.

Here it is Mr. Mark Wagley’s full intervention on this issue.

One of the questions posed was ‘How can we increase budget revenues simultaneously with an increase in activity in the O&G industry?’. Well, that is pretty simple: each euro invested in the onshore segment generates an overall contribution to the GDP of 3.2 euro. For every euro invested in the Upstream O&G industry an equal euro flows to the state budget. So, we invest an euro in the industry, we have 3.2 to GDP, and we have an equal euro going to the state budget. And so, the question becomes ‘How do we stimulate capital investment in the industry?’.

I am from Texas, and I want to point to something that we talk about as the ‘Texas miracle’. 4 of 5 fastest growing cities in the US are in Texas. Texas produces more oil than Kuwait, and produces more natural gas than any single OPEC country. How did that happen? That happened by capital investment. What attracted that capital investment? A predictable and stable fiscal regime.

Romania is quite often called, by a lot of our members, the Permian basin (the great reservoir based in West Texas) of Europe. There are a lot of correlations between Texas and Romania. All the government has to do is to get out of the way and create a predictable and stable regime.

I heard a word used today that sounded like a dirty word: it was ‘carbonites’. Our industry supports all of above strategy, and indeed some of our members actually invest in the renewable energy. But O&G is here to stay. Demand for oil goes up every year, it doesn’t go down. Let us not kid ourselves!

I want to point out to another interesting correlation. 100 years ago, coal was king, but everybody knew that oil was coming into big favor. Oil came on, gave us power for a hundred years, and we forgot about coal. 100 years later, oil has been driving the economy and we think about coal. What percent of worldwide electrical generation is generated through coal? We have got this coal, haven’t we? 41%! So, 100 years later this ‘carbonite’ – the dirty word -, is still generating 41% of the world electricity. The future for O&G will be the same, and one of the reasons is oil supports mobility. Every form of renewable energy is stationary – wind farm, solar panels, nuclear.

Oil is not going anywhere, it has a long bright future, demand will continue to grow, although at a slower pace due to renewables. Let us not forget this industry, and Romania has a bright future if they will invest in the Upstream O&G sector.

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Energy Strategy Summit 2017 was organized by Wing Media Energy Consulting, through energynomics.ro, in partnership with reputed industry organizations such as ACUE, AFEER, AIIR-FV, EFdeN, RBSTA, ROPEPCA, RPIA and EPG, with the support of BCR, BMW Auto Cobălcescu, Casa de traduceri, CEC Bank, CIS GAZ, Conpet, Enel, E.ON, Hidroelectrica, KMG International, Lukoil, Nuclearelectrica, Phoenix Contact, Romgaz, RWEA, Schneider Electric România, SAMEDAY, Stratum Enclosures, Transelectrica.