In 2016, the trend is to reduce investments, signalized Sorin Gal, General Director of the National Agency for Mineral Resources (NAMR), while at Energy Breakfast Club of 17th of February, on sustainability in the oil and gas sector subject. “There will be drilled very few wells, the workover activities are halved, the exploration part slowed its engines to near zero,” explained the official from NAMR.

There are already lawsuits related to companies that did not respect their obligations under the concession contracts, and 2016 could bring early termination of petroleum agreements. A launch of a new round of auctions is now the Government’s decision, also announced Sorin Gal: “We managed to complete 28 packages in October. These are riveted and will not change. And we are ready to launch the round.”

Reorganization of NAMR

Meanwhile, the government initiated the reorganization proceedings of the Agency for Mineral Resources. “Until 15 March, NAMR must come up with a restructuring program of their activity, an organigram and a mindset for the document flows into the agency,” explained Sorin Gal. Currently, only 17 people are in charge of the NAMR 474 deposits, 54 exploration agreements, that emit annually over three thousand assents and summons (3700 in 2015). NAMR is financed from the governmental budget with 0.37% of the amounts that the agency brings to the budget by their activity.

Equitable relationships

Representatives of ROPEPCA attending the Energy Breakfast Club declared the need of the agency to be well funded and well organized in order to become a solid partner for the private sector. Daniel Apostol, General Secretary of ROPEPCA, insisted on introducing principles that need to take part both in the new form of oil law and in daily practice in the relations between public institutions and oil and gas companies. Most important is the principle of fairness: “Deposits from the auctioning should be worked and exploited. The equation must be balanced, for the benefit of the companies that invest, of the state that collects taxes, of the local community, of the final consumer that benefits at the end of this operation.”

For now, under the environment of a strong and steady declining price of crude, the conditions in Romania remain burdensome for industry: pole tax and income overcharge from oil and gas are still in force, transportation costs rise, legislation remains inappropriate and discourages initiatives into sector.

One million barrels from Iran

Price pressures established on the Upstream sector means better opportunities for refinement activity. “It’s a good conjuncture, not encountered on the market for long time,” said Dan Dănulescu, deputy general director of Petrotel LUKOIL. “Ad litteram, all refineries in Romania pass on plus”, continued Petrotel LUKOIL official, who is expecting an increase of the refined volumes in Ploiești in 2016. “In the first half of March, we await a million barrels of crude oil from Iran”. According to Dănulescu, from the production at Ploiești refinery, 45% will head to export, especially in the regional market, and 55% will cover the needs of Romania. “The excess amount process that we estimate for this year targets the foreign markets”, said Dan Dănulescu.

With 18 years of presence in Romania, Lukoil has invested in refining industry 570 millions dollars, whereby around 160 million dollars for environmental protection.

Download Dan Dănulescu presentation.

Environmental costs should not to be a burden

When everything is on the move, it is only costs that remains unchanged, be it fiscal, contractual or environmental obligations. “Environmental costs should not be a burden, especially in this tough economic climate for the O&G industry”, says Traian Ionescu, commercial director of Envisan NV – environmental services provider.
Companies are supposed to ensure complete traceability of waste from the point of generation to the point of treatment, recovery / disposal, focusing on recovery solutions. Of course, that must not add to much of additional costs. When a company opt for higher recovery, Envisan can provide complete solutions.
“Envisan is probably the most innovative company in the field of waste management, mainly for the oil and gas sector, and we provide solutions for the best possible management and compliance, at fair costs,” says Traian Ionescu. “The best way to control costs is having a reliable partner able to provide all services, in a predictable manner whatever the volumes, throughout the year”.

Download Traian Ionescu presentation

PARTICIPATION

This year, energynomics.ro aims to organize at least 6 Energy Breakfast Club meetings. The schedule and the proposed themes are here.