Derrick Digest for September 29, 2017: Security in the spotlight at energy sector conference

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Romania's oil and gas industry faces challenges, opportunities

The Derrick Digest is a snapshot of energy industry activities in areas where Pennine Petroleum Corporation is active.

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Sept. 29, 2017

 

Energy security, not independence, should be the focus of the oil and gas industry in Romania, according to speakers at a recent conference on the challenges and opportunities facing the country.

The Beyond Strategy: Oil and Gas Projects in Place conference, organized by The Diplomat – Bucharest magazine with the support of the Ministry of Energy, took place Sept. 15. Featuring “a debate on the current policy framework, the state of the projects implemented by the oil and gas companies, the plans and the coherent strategies by which Romania can become a regional hub,” the one-day event attracted government officials, industry representatives from organizations such as Romgaz and OMV Petrov and regulatory officials, among others.

"We are in the process of finalizing an energy strategy for 2017-2030," said Robert Tudorache, Secretary of State within the Ministry of Energy. "The strategy follows the directions of development of the Romanian energy sector over the next decades. We have decided to improve this strategy. We want a document that meets all of Romania's energy interests in this European paradigm. We cannot talk about energy security without considering Romania’s strategic position in the Black Sea. The use of major oil reserves in the Black Sea can give this region a central role in strengthening the energy security of Romania and the entire region." 

He also said that developing offshore resources was a priority for the country, as well as attracting investment and collaborating with companies with proven track records and technology. The representative of The European Bank for Reconstruction and Development was on hand at the conference, sharing that the institution was working with Transgaz to fund the BRUA pipeline and with private investors in the exploration stages of Black Sea drilling.

“We are trying to help with a grant to speed up the procedures and policies on which the offshore safety side will be conducted in the future. Our desire is for Romania to become a regional energy hub. We have all the ingredients to develop this idea and move it forward,” said the EBRD’s Mihnea Cracium.

Mark Wagley, of the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA), however, warned that the country will out of onshore gas in a decade if it doesn’t start investing in the process, and creating a stable business environment.

"We need to see how we can incentivize investments to be stable and predictable, with no more laws passed in the middle of the night," Wagley said. "There needs to be transparency, collaboration, dialogue with the industry. There are a lot of opportunities, a lot of work to do, but we need predictability.”

OMV Petrom’s Lucian Petrescu echoed Wagley’s message of the potential of Romania’s natural resources.

"Romania has an opportunity to become a natural gas exporter and an energy security provider in the future," said Petrescu, who is director supply and logistics, OMV Petrom. "We all need to focus on this opportunity. There is important gas stock in the Black Sea and onshore. With the necessary transport infrastructure, we can ensure energy security in the region.”

The event — moderated by Valeriu Binig, partner in the Advisory Services practice with EY — was organized by The Diplomat in partnership with Romgaz and with the support of:

  • Ministry of Energy
  • ANRE (National Energy Regulatory Authority)
  • ARPEE (Romanian Association for Promoting Energy Efficiency)
  • AFEER (Association of Electricity Suppliers in Romania)
  • ROPEPCA
  • The World Energy Council

 

Total starts drilling for second well in Black Sea

Total E&P Bulgaria is starting the second deepwater drilling in its 1-21 Asparuh block in the Black Sea 90 kilometres off the coast of Bulgaria.

The effort is 14 km northeast of Total E&P Bulgaria’s first drilling in the block, which covers 14,220 sq. km in the western part of the Black Sea. It is expected to provide additional information on the hydrocarbon potential of the block. The Noble Globetrotter II, used in the Polshov-1 well operations, is being used for the new well, dubbed Rubin-1.

Drilling should be completed at the start of 2018. This April the Bulgarian government extended the permit held by Total, OMV and Repsol by 135 days.

In October 2016, Total announced it had discovered oil in the 1-21 Han Asparuh block. The company, a unit of France’s oil and gas group Total, had started drilling in the block, along with OMV and Repsol. Total has a 40% interest in the project, with the remaining 60% divided evenly between the other two companies.

The group completed two seismic surveys in 2013 and 2014, but delayed drilling due to the slide in global oil prices. Under the 2012 terms for Total’s permit for prospecting and exploration in the block involved the company committing to investing more than $1.19 billion US, with Bulgaria receiving €40 million in a bonus payment.

 

TAP investing in energy-focused postgrad programs

Ninety students a year enrolled in Master’s programs at the University and the Technological Educational Institute (TEI) of Western Macedonia will have 50% of their tuition paid for, thanks to a new initiative funded by the Trans Adriatic Pipeline (TAP).

The €1-million initiative, which will run for five years, is part of TAP’s €32-million Social and Environmental Investment Programme in the three northern Greek prefectures transversed by the pipeline project.

“With this initiative, we are investing in young people, we are supporting Greek higher education, and we are rendering these energy-focused postgraduate programmes more accessible to students," TAP's country manager for Greece, Katerina Papalexandri, said at Main Hall of the TEI of Western Macedonia in Kastoria.

Students enrolled in the Energy Resources Technologies & Management at the University of Western Macedonia and Petroleum Oil and Gas Management & Transportation at the TEI of Western Macedonia in collaboration with the Azerbaijan State University of Economics can apply for the funding.

Two professors who are directors of the Master’s programs spoke at the event, stressing “the importance of postgraduate studies in energy systems for the country in general, and for Western Macedonia in particular,” according to a report in Azernews.

Originating in the Shah Deniz II field in Azerbaijan, TAP will connect to the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border before crossing through Greece, Albania and the Adriatic Sea to its end point in southern Italy. In addition to large European markets such as Germany and France, the pipeline will bring natural gas to the countries along its route.

Expected to have first gas sales to Georgia and Turkey in 2018 and Europe in 2020, the 878-kilometre long project is “a pipeline of synergies, friendship and knowledge,” said Head of the Western Macedonia Prefecture, Theodore Karypidis, at the close of the event in Kastoria.

 

Albania's power structure to be revitalized

A “detailed plan” for the revitalization of Albania’s energy infrastructure has been drafted, according to the country’s Minister of Infrastructure and Energy Damian Gjiknuri.

He made the announcement earlier this week during an inspection in Tirana’s Lapraka neighbourhood.

“This plan is based on the successful reform implemented in the energy sector during the government’s first mandate,” Gjiknuri said. “Thanks to this reform, we managed to import up to EUR 90 million of energy without shaking the state’s finances. The energy import enabled an (un)interrupted supply to citizens, despite the summer’s aridness.”

The announcement came while the minister was inspecting the work done to date in Lapraska as part of the Tirana network revitalization.

“Some 20 kilometres of cable will be replaced. . . . This area will have a completely new energy distribution system within this year,” he said, and the project will benefit more than 10,000 area residents.