09/05/2016
Decommissioning the North Sea Drilling Giants and unlocking Romania’s offshore potential
“The energy we use today is the product of work undertaken decades ago, and the energy we use in the future will be the product of decisions that we make today” John. L. Knapp
On 27 and 28 April 2016, BG & Partners attended the SEE upstream 2016 Annual conference and exhibition in Bucharest, together with their colleagues Nigel Margetson and Steven van Dam from Margetson Van ‘t Zelfde and Co.
After attending 2 full days of conference, BG & Partners would like to share with you the most recent developments on the off-shore industry, especially regarding Romania.
Over the last few decades the North Sea has become one of the strongest clusters from all over the world. Despite this success, a growing number of oil and gas resources have reached (or are reaching) their economic lifespan.
Based on the international regulations, these assets will have to be decommissioned and removed.
On the other side of Europe, the prospects for the Black Sea as a new region for offshore exploration seems to be promising.
John. L. Knapp, chairman of the Romanian Black Sea Titleholders Association (RBSTA), believes that the Romanian part of the Black Sea is a promising but challenging area in terms of potential energy resources.
Romania has an ambitious energy agenda and needs large investment projects in order to successfully unlock the energy resources in the Black Sea.
The specific challenges for the Black Sea are that:
- The exploration phase may last for 10 years or more. This phase encompasses the seismic data acquisitions, drillings, evaluations and assessments.
- Infrastructure: there is no existing upstream infrastructure in the Black Sea. If commercial resources are found, investors will have to build the pipelines needed to bring the production onshore Romania.
- The Black Sea environment: increased corrosion risk due to the anoxic nature of deep waters, its seabed topography, and the transit through the Bosporus and Dardanelles Straits for transporting specialized equipment.
As Mr Knapp stated, there is an increase in confidence that there are funds available to make infrastructure investments in Romania.
It is worth mentioning the fact that:
- In 2012 the Deepwater Champion confirmed the 1st deepwater gas discovery in the Black Sea.
- Romanian authorities made significant steps towards a comprehensive implementation of Directive 2013/30/EU on safety of offshore oil and gas operations.
- Currently there is visible increase of the participation in the upstream sector with domestic and foreign companies working together.
- There is a range of offshore projects in Romania, most of them still in the exploration phase (see picture).
The RBSTA emphasized that the stability and predictability of Romania’s legislative and fiscal regime are a pre-requisite for unlocking the country’s energy resources. In this regard, the RBSTA has proposed to the Romanian Government a set of legislative measures designed to make the regulatory framework more suitable for the complex offshore projects.
To conclude, the decommissioning activities from the North Sea and Romania’s natural resources combined with its strategic geographical location, place Romania in an advantageous position to become a regional energy hub, placed in Eastern Europe.
For more information about the Romanian market and investment opportunities follow our company page or feel free to contact us directly at [email protected]
