ROPEPCA warns on the increase in hydrocarbon imports: Domestic gas producers are fiscally discriminated

Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) warns on the latest evolutions in the oil and gas market and requests public policies to encourage keeping the domestic production of hydrocarbons. According to data recently published by the National Institute of Statistics (INS), Romania’s gas imports last year increased by 629% compared to 2015, reaching 1.185 million tons of oil equivalent, while the domestic gas production fell in 2016 by 12.5%, totaling 7.487 million tons of oil equivalent. These major changes in the balance of hydrocarbon imports represents a materialization of the risk on which ROPEPCA has repeatedly warned, namely that the domestic gas production is discriminated in relation to imports, as a result of a fiscal policy that does not reflect the realities of the local market (continuing the supplementary charge of revenues from gas market liberalization and the threshold of RON 72/MWh, in conditions in which market prices have fluctuated in 2016 below this level). This policy is still in force, threatening to deepen their effects, given that, once stopped, the wells can be restarted only with significant costs or cannot be restarted at all. Amid a constant demand, the massive increase in hydrocarbon imports has a negative impact on both the energy security and national economy. Romania’s favorable position at European level regarding energy independence is easy to divert by implementing national policies that do not take into account the realities of the industry. We also recall that an investment of EUR 1bn translates into a contribution of the sector of EUR 3.2bn to the GDP, so any decrease in production and investments is proportionally reflected in Romania’s GDP. At the same time, ROPEPCA calls on state authorities for a fair and honest approach of problems faced by the oil and gas market and reminds all stakeholders the need for appropriate documentation and public information, as well as for a consolidated dialogue, in order to ensure a predictable legislative framework and a fiscal package supporting the industry, to the direct benefit of the entire Romanian economy. “Any political and fiscal decision ignoring the realities of the domestic market and the profile of the industry affects the sustainability of production, the attractiveness of investments and actually leads to economic and energy security losses. In conditions in which the new Executive has announced that it would soon complete the new fiscal framework on the oil and gas industry, we believe that it is essential that debate in the public space is based on real figures and qualified analyzes, so that dialogue with the institutional partners results in the best decisions, in order to support the industry and for the development of the entire Romanian economy”, Mark Wagley, Acting President of ROPEPCA, said. The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) has a new Steering Committee, with a mandate of one year, consisting of seven executive members and two non-executive members, and is led by Mark Wagley, as President. Mark V. Wagley is the CEO for Hunt Oil Company Romania and is in charge with the operations of Hunt Oil in the entire area of Eastern Europe. The executive members also include Harald Kraft (Stratum Energy) – future President of the Association, Artur Stratan (Amromco Energy) – former president, Alexandru Maximescu (OMV Petrom), Ede Nagy (Panfora), Saniya Melnicenco (NIS Petrol) and Steve Pearson (Sand Hill Petroleum Romania). From the position of executive authority of the Association, which ensures the application of decisions made by the General Assembly, the Steering Committee will continue dialogue with the public authorities to guarantee the long-term stability of the fiscal framework in Romania. In order to develop the dialogue carried out with the institutional partners, ROPEPCA will continue to present to the Government and all representatives of the society the realities, statistics and forecasts specific for the industry, so that the oil and gas industry receives the treatment it needs, in order to support the economic growth of the industry and for the development of the entire Romanian economy.

ROPEPCA: ROPEPCA was founded in November 2012, aiming to strengthen the image of the onshore upstream sector in Romania, and to enhance its relationship and communication with the state, government, regional and local authorities, national agencies, and general public. ROPEPCA gathers the most active members in the onshore industry and now comprises 18 companies: ADX Energy, Amromco, Aurelian Petroleum, Bankers Petroleum, East West Petroleum, Expert Petroleum, Fora Oil & Gas, Hunt Oil, Moesia Oil & Gas, NIS Petrol, Oilfield Exploration Business Solutions, OMV Petrom, Panfora Oil and Gas (MOL Group), Repsol, Sand Hill, Stratum Energy, Winstar Satu Mare/Serinus Energy, Zeta Petroleum.