The potential for new gas discoveries in the Romanian part of the Black Sea is huge, but the government needs to improve regulation to speed up its development, the country’s top producers said on Thursday.
Producers like OMV (VIE: OMVV ) Petrom, majority-controlled by Austria’s OMV, have spent 15 years and billions of dollars preparing to exploit the estimated 200 billion cubic meters of gas in the Romanian Black Sea, but they have been held back by sudden fiscal and regulatory changes.
After years of stalemate, Romanian lawmakers earlier this year approved a series of legislative changes in hopes of unlocking investment.
“The potential for gas discovery in the Romanian Black Sea is huge, it has already been shown,” Black Sea Oil & Gas (BSOG) CEO Mark Beacom told an energy conference. “But if your goal is just to have discoveries and leave them there for 30 years, it doesn’t make sense.”
BSOG, controlled by US venture capital firm Carlyle Group (NASDAQ: CG ) LP, launched the first deepwater development project in the Romanian part of the Black Sea in three decades earlier this year and plans to extract 1,000 million cubic meters per year, which is approximately 10% of Romania’s consumption.
Beacom said the company is also looking at developing offshore renewables.
“Development time has to be much shorter,” said Petrom CEO Christina Verchere. “You have to have the appropriate regulatory and fiscal framework and this is what we have found a challenge, it has not always been there.”
OMV Petrom has not yet made a final investment decision on its Neptun Deep Black Sea project, in which it has discovered between 1.5 and 3 trillion cubic feet of gas.