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Black Sea Oil & Gas to begin Romania offshore gas extraction in November

BLACK SEA
OIL & GAS

Black Sea Oil & Gas to begin Romania offshore gas extraction in November

Romania-based Black Sea Oil & Gas (BSOG) will begin extracting natural gas from its $600 million offshore Romanian project in November, its chief executive said but added further progress hinged on scrapping a disputed tax. Source: HellenicShippingNews

The additional tax on offshore projects is the last remnant of a series of price caps, taxes and export restrictions introduced two years ago by a previous centre-left government.

The changes, most of which have since been reversed, blindsided gas producers, which have spend over a decade and billions of dollars preparing to tap Romania’s Black Sea gas.

Critics warn Romania’s window to tap its offshore reserves – which could diversify gas supplies in the region and help Romania phase out coal in line with EU targets – is narrowing.

“We’ve got this perfect project, very well behaved as far as the EU is concerned,” CEO Mark Beacom told an energy seminar, adding BSOG’s project had a 10-15 year lifespan and that renewable projects could be developed around its infrastructure.

Meanwhile, OMV Petrom, majority-controlled by Austria’s OMV, has delayed a final investment decision on its much larger Neptun Deep offshore project.

Energy Minister Virgil Popescu said he was confident parliament would amend the offshore law and remove the additional tax before the summer recess. He also said OMV Petrom could start extracting gas from Neptun Deep by 2025.

OMV Petrom chief executive Christina Verchere agreed it would take around four years after a final investment decision.

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