Romanian Prime Minister Nicolae Ciuca and Energy Minister Virgil Popescu are among the officials who attended the yesterday's signing of a deal between state owned oil and gas producer Romgaz and US major ExxonMobil, underlining the strategic distancing from Russia that the project represents.
The deal, which was announced last year, has given Romgaz full control of ExxonMobil’s local subsidiary ExxonMobil Exploration & Production Romania for a consideration of more than $1 billion.
The subsidiary holds a 50% shareholding in the country’s largest offshore project in the Black Sea.
Neptun Deep, as the project is known, is expected to become a major alternative supplier of natural gas for domestic and export markets as early as 2026.
"The transaction is the expression of the government's commitment to support vital investments in energy and capitalization of gas in the Black Sea for the benefit of Romanians and the country’s economy”, Ciuca said at the ceremony.
“Romania has taken a huge step towards ensuring energy security and independence. In the current geopolitical context, we have no time to waste. We will make the necessary efforts to speed up the start of operation,” Popescu said after the Prime Minister.
Despite boasting strong domestic gas production, Romania remains dependent on Russian gas supplies flowing to the country via the TurkStream subsea pipeline, which crosses the Black Sea and across Turkey and Bulgaria.
According to a partner in CMS Cameron McKenna SCA Law firm in Bucharest, Loredana Mihailescu, the country continues to import over 15% of its gas needs from Russia.
The continuation of these supplies is understood to be at risk following Gazprom's decision to halt sales to Bulgaria.
The Russian gas giant took this measure after Bulgarian authorities refused to accede to demands that payments be made in rubles, via an intermediary bank.
“Romania will have a surplus of gas [after the start-up of Neptun Deep], doubling its gas production far beyond the current domestic consumption and become a provider of regional energy security,” Popescu said.
Neptun Deep has been on hold for years following adverse legislative changes that the project’s operator and other 50% shareholder, Austria’s OMV, expects to see addressed now.
“A new offshore law being debated in the Romania’s parliament is accelerating vital investments to secure [access] to natural gas resources,” Ciuca said.
“The government’s vision for developing the energy sector will reposition Romania as an important regional player that is able to provide necessary [energy] for the consumption of citizens and the economy and become a secure provider of energy.”
Speaking last week in Vienna, OMV chief executive Alfred Stern said Neptun Deep is expected to require investments of about €2 billion ($2.1 billion).
Provided that the Romanian parliament removes tax hurdles on the country’s offshore developments later this year, Stern expects that OMV and Romgaz will be able to agree upon the final investment decision on the project within a year.
The development is expected to enter into commercial production four years after the final investment decision.
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