BSOG confirms Q2 launch for Romanian gas project
Black Sea Oil & Gas (BSOG) expects to achieve first gas at its Midia gas development offshore Romania in the second quarter of this year, Reuters reported March 30.
Midia is one of a number of offshore gas discoveries in the Romanian Black Sea made in the last decade and a half. The zone is estimated to hold 200bn m3 in gas resources, but developers have delayed projects because of a new offshore law introduced by Bucharest in 2018, which increased taxation among other things. The country already produces around 10bn m3/yr from onshore gas concessions.
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Romania is an EU member and its gas could therefore pass across borders within Europe's 447.7mn-person common market without trade restrictions. But BSOG CEO told Reuters that upstream investment had been hampered by Romania's offshore oil and gas regulations.
"Our view is that continuously undermining domestic produce by constantly introducing yet again new detrimental measures is the reason that Romania has significantly failed to reach its significant production capacity and will only prolong this issue," said BSOG CEO Mark Beacom.
Protective measures introduced by Bucharest include price caps on a share of upstream gas output, in return for tax discounts and exemptions. Romania's effective offshore gas tax rate of 23% is more than four times higher than the European average, according to a study by consultancy PwC Romania.
A legislative attempt to reduce the burden floundered last year, and PwC Romania believes "time is running out" to capture the Black Sea opportunity given the EU's long-term objective is to reduce natural gas consumption.
Contractors lifted and installed the last section of BSOG's 3,000-ton Ana production platform that will handle Midia's gas in September 2021. The unmanned unit will extract gas from the Ana and Doina reservoirs via five offshore production wells, dispatching gas to a 1bn m3/yr capacity treatment plant on the Romanian coast. The Ana and Doina reservoirs comprise around 300bn ft3 in P50 gas reserves.