Ponta: Shale Gas Exploitation will Disadvantage Gazprom
Early this week, Romanian Prime Minister Victor Ponta announced that negotiations with Chevron regarding areas in Constanta County will continue.
The controversial project to explore for shale gas in Romania has made a media comeback as the moratorium over shale gas established in May is about to end at the beginning of next year.
According to the statement, the Romanian Government will continue negotiations with the American major, should the exploitation of shale gas be approved. Gazprom stands to lose the most from such activities as Romania imports natural gas at a price of USD 450 per one thousand cubic meters.
“First of all we are talking about gas discovered by Exxon and OMV (Domino discovery) and in three, four or five years exploitation will start and definitely, in the context in which the European Parliament issued a resolution and Great Britain already approved such exploitations... Because I want to make one thing clear: if we allow tomorrow such exploitations and shale gas is found, in five years time we will produce the first cubic meter, at best. Poland uses shale gas with USD 80 / thousand cubic meters, we import from Gazprom with 450 and I want my Oltchim with USD 450 / thousand cubic meters to compete with the Polish company with 80,” said Ponta at a TV station, cited by Mediafax.
The issue of shale gas is treated differently in Romania and Bulgaria, two neighboring countries where shale gas extraction met the same opposition at the beginning of this year. In September, Bulgarian and Romanian Greens demanded that Ponta follow the lead of its Bulgarian neighbours and oppose shale gas development.
Chevron had a license to exploit shale gas deposits in Bulgaria, but the Bulgarian Government canceled it in January. The Government in Sofia at that time said that it was preparing a law to completely forbid this type of extraction due to environmental concerns.
In Romania, Chevron is one of the companies interested in shale gas and owns an exploration area in Barlad and three in Constanta County.
The former Government approved three petroleum concession agreements in March for exploration, development, and production in Constanta County (Vama Veche and Adamclisi si Costinesti).
After being appointed Prime Minister in May, Victor Ponta had announced that he will establish a moratorium until European environmental impact studies are completed. The governing programme contained a provision stating exploitation of shale gas in Romania will be possible only after the completion of such studies are done by European officials.
According to a company statement issued in the spring: "In Vaslui County, Chevron will only proceed with conventional methods of exploration in 2012. It is important to note that Chevron has not and is not drilling in Constanta County. The only activity that Chevron will proceed with until the end of this year will be a standard earth physics study, similar to other studies conducted in Romania. Only after the completion of this study will we consider drilling a standard exploration bore, similar to those conventional bores already present in Romania. Chevron takes into consideration a possible exploitation project after completion of the exploration activity, which will encompass a five year time frame.”
Should the exploitation of shale gas proceed in Romania, it would follow newly discovered gas deposits, covering three to six times the yearly Romanian consumption if exploited using traditional technology. OMV Petrom announced in February that it discovered a significant amount of gas in the Black Sea, with preliminary estimates putting natural gas deposit anywhere between 42 – 84 bcm, which could be three to six times the yearly consumption of Romania. OMV Petrom explores areas in the Black Sea in partnership with ExxonMobil Exploration and Production Romania. The gas deposits discovery is considered by some economics experts as being enough to cover the necessities of Romania for several decades.
Silviu Molnar