Romania-based Black Sea Oil & Gas will begin extracting natural gas from its 600 million-dollar offshore project in November, although progress depends on the scrapping of a disputed tax, the company’s top executive said Tuesday, according to news reports.
BSOG, which us controlled by private equity firm Carlyle Group LP, has continued its project to extract an estimated 10 billion cubic meters of gas, believing the current government will abolish the tax before November.
The additional tax on offshore projects were introduced two years ago by the previous left-leaning government.
The changes rattled gas producers which have spent years and billions of dollars preparing to drill Romania’s Black Sea gas, Reuters reported.
Energy Minister Virgil Popescu said late Monday that Parliament would change the offshore law and remove additional taxes, and when “the most gas” is being extracted, Romania authorities will build infrastructure to do their own drilling.
Romania will extract more gas that its domestic needs and will become “ an important supplier of gas,” the minister said before the seminar which he also attended.
BSOG chief executive Mark Beacom told an energy seminar on Tuesday that the company’s project had a 10-15 year lifespan and that renewable projects could be developed around its infrastructure.
He said the company was building a “huge’ infrastructure to carry the gas to the shore. “It has immense advantages for green energy without emissions,” he said.
“If we can use solar energy, we can connect it directly to our installation… without worrying about electric lines, networks or other things,” Ziarul Financiar reported.
“We can use solar energy to feed the network…. We can also use wind to feed the energy platform. When the wind is too strong, we can store the energy and transform it into hydrogen.
Romania is the second-largest producer of natural gas in the European Union with important gas reserves in the Black Sea.
Romania main asset is Midia Gas Development Project which comprises the Ana and Doina gas fields and is 120 kilometers offshore. In September, 2020 Black Sea Oil &Gas began to lay pipelines that will carry gas to shore and cover 10% of domestic needs.
The former U.S. Ambassador Adrian Zuckerman told universul.net in November that he was hopeful ‘the adverse effects of the law (that was) passed previously; would be changed to incentivize drilling in the Black Sea which is “very, very lucrative and it would address a lot of the needs of not just Eastern Europe, but by doing so could alleviate the demands of Western Europe as well.”
European Commission Executive Vice President Frans Timmermans who spoke at the event called on Romania to use its part of the EU’s 750 billion euro economic recovery fund to invest heavily in renewable energy, Reuters reported.