Romanian Offshore Projects 'Still Doable': Analysis
The development of existing gas finds offshore Romania is still likely despite the new offshore law, according to analysis published by GlobalData November 16.
‘‘Project economics under the new terms set by the offshore law still appear attractive enough to support development of Romania’s major offshore gas finds. Revisions since the parliament originally passed the law in July increase tax rates at high gas prices, but also improve the effect that investment deductions can have in reducing the tax liability," it said.
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‘‘The largest project offshore Romania, the ExxonMobil-operated Domino field, appears competitive within ExxonMobil’s portfolio of potential new development opportunities. It outperforms most other pre-FID offshore gas developments and offers similar rates of return to all but the most attractive potential offshore oil developments.
‘‘The effects of the new law may be more pronounced when it comes to attracting new exploration investment. With neighbouring Bulgaria and Ukraine offering significantly more attractive terms, Romania’s offshore exploration opportunities may appear less competitive. Additional regulatory requirements imposed by the offshore law along with additional uncertainty created by proposals to cap gas prices may further limit investor interest.”
On November 9, Black Sea Oil & Gas signed a transport agreement with grid operator Transgaz for 1bn m³/yr capacity for its own gas production, should it take a positive FID in light of the law that was unexpectedly introduced in the summer.