Romania has about fifteen years’ worth of gas left if drilling keeps going at the current pace, according to available information. Unless significant investment is made in tapping new resources, Russian imports stand every change of becoming the main source used to cover consumption needs in the long run.
Whereas Romgaz, one of the most valuable state-run companies that accounts for about half of the local production of natural gas, registered an output 6.18 billion cubic meters in 2006, this year’s output could reach 5.65 billion cubic meters, data provided by the company reveal. Romgaz’s output has been dwindling since 2006.
Rival Petrom (SNP.RO), the second largest natural gas producer in Romania, is faced with the same problem. It saw its output decline from 5.9 billion cubic meters in 2006 to 5.16 billion cubic meters last year.
Faced with such prospects, Romgaz Medias says it is considering several plans, both local and international, to offset production decline. The Black Sea, non-conventional gas or Kurdistan operations are some of the options Romgaz is currently exploring.
“Romgaz is in advanced talks for a stake in the exploration blocks in the Black Sea with companies holding rights and obligations for the respective blocks,” said Lucian Stancu, deputy general manager of the company. He added he could not reveal the names of the companies Romgaz was in talks with.
The company is also considering non-conventional gas.
“Romgaz is currently conducting a series of surveys, as well as research into the potential of this type of gas in the blocks it operates.”
Shale gas is the most often talked about type of non-conventional gas lately. It is just regular natural gas trapped in shale rock, which makes it harder to drill than conventional gas.
The third plan Romgaz is considering is the international market.
“We currently have foreign markets such as Poland and Slovakia – we have a subsidiary in Bratislava – where we leased reserves and are now conducting geological surveys. We are also in very advanced talks with the Ministry of Natural Resources of Kurdistan over a potential lease of blocks,” Romgaz’s deputy general manager added.
Romgaz, the most profitable state-run company, doubled its net profit in the first half. It is currently operating at an over 24% margin, which is very high compared with the other state-run companies.
The financial data the company provided show it to have made 488 million lei (EUR114.26 million) net profit in the first half, more than double the profit in the first half of 2010, RON225.7 million. Revenue rose almost 7% to RON1.9 billion. (EUR1=RON4.2710)
(English version by Loredana Fratila-Cristescu)