Romania needs clear strategies and regulations, Saniya Melnicenco, president of ROPEPCA, told at the 2019 Energy Strategy Summit, an event organized by energynomics.ro.
The 13 companies that make up ROPEPCA have provided 14,000 jobs in recent years, have invested more than 5 billion euros over the past five years, with a multiplier of 3.2 in national GDP. State budget contributions of 11 billion euro may translate into 600 km of motorway, 40 county hospitals or 2,000 medium-sized schools.
“We are glad to hear the news of the next Round of perimeter bids, a necessity we have often talked about, which has not happened over the last 10 years. We can support, through our capabilities (the authorities), to make this Round more efficient.
But we must also look at the success of previous rounds. For example, Round 10 of 2009 ended with a pretty interesting result. 20 perimeters have been allocated, but exploration and production activities take place on 7 active perimeters. That means a 30% success rate. An own estimate shows that for some reason, around 500 million euros have not been invested. What can we do to ensure the success of the current Round?”, asked Melnicenco.
What does an investor look for when considering a new investment destination
First, we look for available, technical and geological data. ”Here we have a very large area where we can make improvements in Romania.”
Then, the regulatory framework must be stable and predictable, at least coherent. And, obviously, an investor is looking for a well-trained workforce – and here Romania responds to this demand. ”We have well-qualified specialists.”
The upcoming Round 11 must be a success to ensure a more liquid and balanced market.
”We have two big players – a duopol, six or seven small gas producers and an import component. What would be the answer to increase this market? Let us bring new investors and increase the existing market, have a surplus of gas and ensure a good price for the final consumer.
I think the first solution would be to work on a declassified, more democratized, better-established data regime. Then we should very clearly address the issue of land access, which is notorious. Because of this problem, there have been a lot of failures in exploration since 2014 and at least nine companies have been retired so far, that have failed to meet their minimum programs.
So, returning to the results of Round 10, we have three bankrupt companies, three perimeters that have been handed back over to the Agency (The National Agency for Mineral Resources – NAMR), with prospects for international arbitration. This certainly does not confirm a good result of Romania as a destination for investments.”
A third issue – stabilizing the regulatory and legislative framework.
“Let’s not forget that Romania is not the only bride in the village. Countries with a much lower geological potential have managed to attract mass investors over the past five years. We are talking about Hungary, Slovakia, Croatia, and now there are opportunities in Ukraine and Turkey – despite a lower geological potential. We are open in supporting and contributing, including in terms of development strategies.”
We have three overlapping strategies: the European one that reduces carbon footprint and increases production. A national strategy that for the time being declares the need to attract onshore and offshore investments. “Unfortunately, we should also see concrete measures to achieve this goal.”
Finally, there are corporate investment strategies, which seek a return on investment. “It is time to ensure good conditions for a new financial influx that brings a triple gain – for the economy, the investors and for the employees in the industry,” concluded Melnicenco.