Oil and Gas Market Overview

An Expert's View about Energy in Romania

Posted on: 24 Oct 2011


Romania’s reliance on foreign energy sources is lower than the European Union average due to its own primary energy resources. The country has the largest oil and natural gas reserves in Central and Eastern Europe. At the end of 2009, Romania’s proven reserves were estimated by Europe’s Energy Portal as follows:

• Oil: 0.5 billions of barrels

• Natural Gas: 0.6 trillion cubic meters

In 2009, the International Court of Justice in The Hague ruled in favor of Romania in a lawsuit with Ukraine regarding the Black Sea continental plateau. The decision granted Romania’s right to exploit an exclusive area of 9,700 km, which represents 79.34% of the disputed area with Ukraine. Experts estimate the potential reserves of this area to be 100 billion cubic meters of natural gas and 10 million tons of oil.

Market Overview

Oil sector
Romania was the first country to officially report oil production in 1857, and now is a mature oil processing country with refining, transportation and retail infrastructure. A notable change in the sector happened in 2004 when the state-owned oil company Petrom was sold by the Government to the Austrian Group, OMV. That move opened the market to international competition.

Petroleum Agreements
The competent authority responsible for petroleum resources is the National Agency for Mineral Resources (NAMR), a special body of the public administration. The legislative framework for this agency is provided by the Petroleum Law no. 238/2004.

Among its responsibilities, NAMR prepares a list of blocks to be awarded under concession to conduct petroleum operations. The list is published in the Official Monitor of Romania, Part I and the Official Journal of the European Union. The initial term of the concession can be of up to 30 years and can be extended by up to 15 years.

Once the list of available blocks is published, NAMR conducts a public tender. Romanian or foreign companies shall submit bids within a certain timeframe set which cannot be shorter than 30 and longer than 270 calendar days. The bids are required to include a proposal of the exploration, development-production or production program, documents proving the technical and financial capability of the bidder and other documents as determined by NAMR.

Petroleum agreements are signed with bid winners and come into effect after Government clearance. Foreign companies that obtain the right to conduct petroleum operations must set up a subsidiary or branch with a headquarters in Romania within 90 days of concession coming into effect and maintain it for the entire duration of the concession.xx The amount of the petroleum royalty owed to the state budget by the title holders of petroleum agreements for development-production and for production is calculated based on the reference prices set by the competent authority.

Companies Conducting Petroleum Operations in Romania

In December 2008, Petrom concluded a partnership with ExxonMobil to cooperate in exploring the hydrocarbon potential of the deepwater offshore portion of the Neptun Block in the Black Sea off Romania’s coast. The Neptun Block covers an area of approximately 9,900 square km in water depths ranging from 50m-1700m.

In 2010, NAMR organized a tender for oil exploration concessions, including offshore sites. Several international oil companies had submitted offers for 30 concessions of oil perimeters in Romania. U.S. Companies such as Chevron and Expert Petroleum were among winners.

Major Players in the Romanian Oil Sector

PETROM is the largest Romanian oil and gas company and also the largest in Southeastern Europe, controlled by OMV, which owns 51 per cent of shares since 2004, when it acquired the majority of stock in the company from the Romanian state in a $ 2 billion transaction.

Petrom is the sole crude oil producer in Romania and accounts for approximately half of Romania’s gas production. Petrom Exploration and Production business explores and extracts oil and natural gas in Romania and other countries in the Caspian region. In 2010, domestic oil and gas production amounted to around 173,900 boe/day while total proved oil and gas reserves were approximated to 832 mn boe (Romania: 805 mn boe) at the end of December 2010. Petrom holds exploration licenses for 15 onshore and 2 offshore blocks, with a total area of 59,100 km2 (of which 13,730 km2 is offshore) and operates 255 commercial oil and gas fields. The company owns two refineries: Petrobrazi (in Prahova County) with an annual capacity of 4.5 million tons per year, and Apechim (located in Pitesti) with an annual capacity of 3.5 million tones. Both refineries are connected to an extensive pipeline infrastructure allowing crude to be transported from Petrom’s fields, as well as imported crude from Constanta Oil Terminal on the Black Sea.

Petrom is the leader of the Romanian retail market, with a network of about 500 filling stations.

ROMPETROL is the second largest player on the Romanian oil sector. It was established in 1974 as a fully stateowned company that was in charge of the foreign trade of the Romanian oil industry. In 1993, the company was privatized, which resulted in the creation of a 100% privately owned company. In 1999, Rompetrol established the holding’s headquarters in the Netherlands. In 2007, the company was bought by the Kazak Company Kazmunaigaz.

The company’s upstream activities are concentrated along the Black Sea and Caspian Sea basins, the Middle East, and Northern Africa.. The Rompetrol Group holds the rights to explore and produce on three Romanian sites (Zegujani, Satu Mare and Golesti) and perform oil-enhanced recovery at 5 existing Romanian oil fields. In 2006, Rompetrol received a license to operate in the Golesti, Arges county region. The license is valid for a period of up to 20 years, with the possibility of renewal every five years. The 4.5 square kilometer sector is in the area of the national natural gas distribution network, about 5 kilometers from the city of Pitesti.

The Rompetrol holding includes Petromidia refinery, Petrochemicals and Vega refinery.

Rompetrol Rafinare (Petromidia) refinery:

The refinery is strategically located on the Black Sea Coast, with direct access to port facilities (Midia and Constanta harbors) and infrastructure (having its own railway company) and a location close to crude oil pipelines.


The polypropylene plant was established in 2002 following the separation of polymer production from the main refining activity within the Petromidia refinery. The plant has a rated capacity of 80,000 tons/year, and its production dominates the Romanian market with 70% of the total polypropylene market. The company also secured a significant position on the Turkish market as well.

In 2006, Petrochemicals signed a 14-year contract with American company Dow Chemical, based on which the Romanian company will produce polymers under the brand name Dow. The contract makes possible turnover of more than $1 billion per year for the petro-chemistry division. Petrochemicals is slated to deliver over 60 thousand tones of polymers in the first year, and to reach 100 thousand tons shortly thereafter.

Vega refinery:

This refinery is located in Ploiesti, 60 kilometers from Bucharest, and has a maximum rated capacity of 10,000 BOD (500,000 mt/yr). It concentrates on specialty products, including solvents, ceresin, pharmaceutical salves, exhaust catalysts for cars as well as the recovery of precious metals, LPG, and intermediate blended stocks. It is the sole producer of bitumens, solvents and ecological solvents in Romania.

Read the full market research report

Posted: 24 October 2011

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