ROMANIA ATTRACTING FOREIGN E&P INVESTMENT

Romania is making progress in efforts to attract foreign investment to bolster its faltering oil and gas sector. Ten western oil and gas companies remain in the bidding for exploration and production concessions in Romania, according to western press reports. They are Amoco Corp., ARCO, Agip SpA, Canadian Occidental Petroleum Ltd., Deminex Enterprise Oil plc, Marathon Oil Co., Petrofina SA, Phillips Petroleum Co., and Royal Dutch/Shell Group.

June 17, 1991

3 min read

Romania is making progress in efforts to attract foreign investment to bolster its faltering oil and gas sector.

Ten western oil and gas companies remain in the bidding for exploration and production concessions in Romania, according to western press reports.

They are Amoco Corp., ARCO, Agip SpA, Canadian Occidental Petroleum Ltd., Deminex Enterprise Oil plc, Marathon Oil Co., Petrofina SA, Phillips Petroleum Co., and Royal Dutch/Shell Group.

Foreign participation is crucial if Romania is to revive its badly flagging oil production. Romania's crude output last year plunged to the lowest level in almost 40 years.

COMPETITIVE BIDDING

First stage of competitive bidding for concessions covering 15 areas in Romania closed late last month.

State owned Rompetrol told western media negotiations are to begin in August with the first contracts signed perhaps by yearend.

Rompetrol last September called for bids for 12 onshore blocks and three blocks in the Black Sea.

Terms are to cover a 5 year exploration period funded by the concessionaire and 20 year period covering a production sharing agreement.

PRODUCTION PLUMMETS

Romanian oil production has plunged to the lowest level since the early 1950s, Bucharest reports.

Crude flow dropped to about 130,000 b/d in February, with no recovery in sight. Romania had hoped to produce at least 130,000 b/d in 1991.

Last year, Romania produced 159,000 b/d of oil, U.S. Central Intelligence Agency data show. That compares with 183,000 b/d in 1989 and a peak flow of 294,000 b/d in 1976.

Romanian oil consumption also has slumped. Last year's consumption of about 310,000 b/d was down from 348,000 b/d in 1989 and far below the 384,000 b/d estimated for 1980.

CIA says severe energy shortages early this year forced many Romanian factories to shut down for weeks at a time to conserve fuel. This caused industrial production declines of more than 20%.

Oil imports last year averaged about 301,000 b/d, down sharply from 436,000 b/d in 1989. Romania expects to increase oil imports in 1991 and has agreed to buy 100,000 b/d of crude from Iran.

GAS PRODUCTION, DEMAND

Romanian gas flow also fell in 1990 and early this year.

Last year's gas production of about 28-29.5 billion cu m compares with about 32 billion cu m in 1989 and an average of almost 37 billion cu m in 1984-85.

Bucharest reports cite discontent over prices being paid for gas imports from the U.S.S.R. Some Romanian authorities believe the nation has enough reserves to enable it to again be self-sufficient in gas.

A Soviet government economist has forecast that if Romania can stabilize its chaotic economy, gas flow can be increased to 32-34.5 billion cu m in 1995.