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Sterling Resources Ltd. has reached an agreement with the Romanian Government
Sterling Resources Ltd. has reached an agreement with the Romanian Government on a series of issues that would solve the dispute notified to the Romanian state on June 20th 2011. Thus, the two sides have reached an agreement on the transfer of an ownership interests in exploration rights of some perimeters of the continental shelf of the Black Sea to Sterling’s partners, Petro Ventures International Ltd. (20%) and Gas Plus (15%), the company informed. “During a meeting with Minister Ion Ariton (minister of Economy, Trade and Business Environment – Ed.) and with the Chairman of the National Agency for Mineral Resources (NAMR), Alexandru Patruti, it has been reached an agreement regarding the transfer of ownership interests to Sterling’s partners, Petro Ventures International Ltd. (20%) and Gas Plus (15%). Moreover, the Government will confirm the validity until May 2014 of the initial period of all offshore permits owned by Sterling, with two extension periods, each for 3 years. The company and NAMR expect to complete the documentation related to this agreement within 10 days”, is mentioned in Sterling’s communiqué. Mike Azancot, Chairman and CEO of Sterling Resources, stated that “although we are waiting for the final documentation of agreed understandings, we can confirm that the meetings held in Bucharest announce a new age of our future plans in Romania. The recent change of the Romanian law on the construction works authorization, the approval of the transfer of ownership interests and solving the matter of contractual terms will allow the resumption of exploration and development operations in the Black Sea”. Sterling Resources Ltd. is a Canadian oil and gas company based in Calgary, Alberta, listed on the Canada exchange. The company carries out operation in the UK, Romania, France and the Netherlands and its shares are traded on TSX Stock Exchange under the “SLG” symbol. The consortium consisting of Sterling Resources, PetroVentures and Gas Plus will invest in the following period between USD 500mln and USD 1bn in explorations in Ana and Doina areas, part of Pelican and Midia perimeters, concessions from the Romanian state, according to a communiqué of the Ministry of Economy, Trade and Business Environment. The consortium’s officials met on Thursday with the Economy Minister, Ion Ariton, to discuss about the exploration of hydrocarbon reserves in the Black Sea. The meeting was also attended by the Chairman of the National Agency for Mineral Resources, Alexandru Patruti. During the talks, the consortium representatives announced that they had completed all negotiations and procedures required by the Romanian law to resume explorations in the Black Sea blocks. (October 31st 2011)

Natural Gas Consumption Increased by 4% in First Eight Months of 2011
Natural gas consumption in Romania totaled 96,165,000MWh in the first eight months of 2011, being about 4% higher than in the same period last year, which amounted to 92,578,000MWh, according to data centralized by the Romanian Energy Regulatory Authority (ANRE). Domestic production of natural gas that enters the consumption accounted for 76.53% of all sources in August, the first two producers (Romgaz and Petrom) covering 95.2% of the source. Imports that have entered the consumption in the current month, current import and drawn from storage, was the difference, respectively 23.47%. The first two importers – domestic suppliers – with a market share of imports of over 8% each have achieved 77.13% together. The price of imported gas was of USD 474/TCM (RON 132.93/MWh) in August, down compared to the price in the previous month, which was USD 480/TCM (RON 133.97/MWh).(October 25th 2011)

The Senate rejected an Emergency Ordinance on gas price for households
The Senate plenum rejected on Wednesday, as first Chamber notified, an emergency ordinance (GEO) on natural gas, under which the Executive proposed the establishment of measures through which the price of gas for the population not to rise, NewsIn informs. OUG 53/2011 was rejected with 45 votes “against”, 46 “for” and one abstention. The Government’s act, passed in a meeting in June, provided the establishment of protection mechanisms for the household consumers and thermal energy producers for the quantity of natural gas used for the production of heat in cogeneration and thermal plants for the population’s consumption. “Following this measure, in July 2011 – March 2012 the price of natural gas for population’s consumption will not be increased”, the Government claims. The Senate is the first Chamber notified.(October 6th 2011)

Romgaz Shortlisted in Kurdistan
The natural gas producer Romgaz was accepted by the Iraqi government, together with nearly 50 other companies, to participate to an international pre-selection on exploration works in some oil and gas perimeters. In fact, it's about Kurdistan, an autonomous region in northern Iraq. We remind you that the former Minister of Economy, Adriean Videanu, announced early last year that Romgaz had acquired geological data for five oil fields in Iraq and that it would exploit, in the future, gas abroad. A Romgaz delegation will arrive on Sunday in Amman, Jordan, where the Iraqi Oil Ministry will hold a presentation for investors. The company will thus participate to the fourth round of auctions organized by the Iraqi State for seven gas fields and five oil fields. The auction is scheduled for January 25th-26th. The Oil Ministry in Baghdad has recently expanded the list of the pre-selected companies, with six new potential beneficiaries, including Romgaz, their number increasing to 46. ExxonMobil (USA), Gazprom (Russia), CNOOC (China), BP (UK), Eni (Italy), Total (France) are among selected companies. From Central and Eastern Europe, the Croatian company INA also participates at the auction organized by the Iraqi state. Romgaz’ plans to penetrate the gas markets outside Romania go a few years back. Thus, since January 22nd 2009, Romgaz has become co-owner of oil rights and obligations in two perimeters in Poland and three perimeters in Slovakia. In the exploration perimeters in Poland, Romgaz holds a 30% stake, and in the exploration perimeters in Slovakia 25%, the rest being owned by Aurelian Oil & Gas, a British gas producer that also operates in Romania. Moreover, Romgaz is interested to participate in auctions in countries such as Azerbaijan, Turkmenistan and Kazakhstan, for the concession of perimeters in the Caspian Sea area. (September 27th 2011)

ANRE to hike by 8% the gas price for industrial consumers
The price of natural gas for industrial consumers will grow as of October 1st by 8%, and that paid by the population and thermal energy producer will remain at the current level, the National Energy Regulatory Authority (ANRE) announced. The decision was taken on Wednesday by ANRE’s Regulatory Committee, a communiqué by the authority reads. ANRE’s Regulatory Committee approved the maintenance at the current level of regulated end-prices for household consumers and heat producers, only for the quantity of natural gas used for the heat production, in cogeneration and thermal plants, for the consumption of the population. The regulated end-prices for non-household consumers will grow, however, on average, by circa 8%, except for thermal energy producers. The change is reasoned by the increase in the price of imported gas from USD 460/TCM, price taken into account when prices were changed in July, to a current level of USD 495/TCM, but also by the increased total natural gas consumption in October-December period compared with the period July-September, which involves to cover the gas consumption from import or from the underground storage facilities. Another factor that contributed to this decision was the change in structures of the gas mixture that is included in the gas unitary cost (CUG) for Q4, compared to what was taken into account in July. Thus, CUG for non-household consumers will be calculated based on a structure of the mixture that will contain 70% gas from the domestic production and 30% gas from imports, compared with 77% domestic gas and 23% imported gas, and the CUG for household consumers will be calculated under a structure of the mixture that will contain 91.5% domestic gas and 8.5% imported gas, compared with 89% gas from the domestic production and 11% gas from imports. Mediafax reported at the end of August that according to government sources the industrial consumers of natural gas would pay as from October prices higher by up to 10%, according to commitments assumed by the Government to the IMF, and by the yearend ANRE could decide another tariff hike. The Government committed to the IMF to increase prices for industrial consumers in two stages, i.e. June-July and Q4 of this year, without specifying the increase percentages in the letter of intent. The price of natural gas for non-household consumers grew in July by almost 10%. International Monetary Fund asked the Executive to present, by September, a phased schedule for the natural gas price liberalization until 2013 for companies and as of 2013 until 2015 for the population. The price liberalization also aims at the electricity sector. The population will not be directly affected by the increase in prices of gas supplied to industrial consumers, because the Government and the ANRE decided in June that for nine months, i.e. between July 1st and March 31st 2012, the household consumers would receive more gas from the domestic production, cheaper by almost 40% against the imported gas, which would allow tariffs not to grow. (September 26th 2011)

Romania Has Oil and Gas Reserves for Another 10-15 Years
Romania's proven oil reserves are of 54.8 million tons, which would be enough for the next 15 years (the level of production in 2010) and natural gas reserves stand at 109.2 billion cubic meters, according to the data presented Tuesday by the Institute for Studies and Power Engineering (ISPE). According to ISPE, the country's geological resources are much greater, but they can not be exploited with the current technology. Thus, the crude oil reserves would amount to two billion tons and the gas reserves to 660.6 billion cubic meters, according to the data presented Tuesday by the institute, during a conference on energy efficiency. In terms of pit coal and lignite resources, respectively the main types of coal that are exploited in Romania, they are much larger and their exploitation could last for 115 years for lignite and 260 years for pit coal, according to ISPE. Thus, Romania's geological resources of pit coal stand at 1.416 billion tons, of which only 602 million tons are exploitable, an amount that would be enough for the next 260 years. The geological lignite resources are of 9.65 billion tons, of which 3.29 billion tons are exploitable, and the estimated period ensured is of 115 years. The two largest natural gas producers in Romania are OMV Petrom and Romgaz. (September 14th 2011)

Romgaz Planned Total Investments of Over RON 5 Billion in the Period July-December 2011
Romgaz planned total investments of over RON 5 billion in the period July to December 2011, an amount of RON 4.43 billion being directed to the geological exploration works meant to discover new gas reserves, according to the list of investment objectives of the companies operating in the energy sector released by the Ministry of Economy, Trade and Business Environment (MECMA). To achieve the geological exploitation works, 21 exploration wells will be completed from drilling. The investments for the exploitation drilling works, technological gas installations, infrastructure and utilities amount to RON 160 million in the period July to December 2011, and those for upgrading and modernization of the facilities and equipments to RON 162 million. To support the underground gas storage capacity, an amount of RON 26.85 million was allocated, and for environmental protection works – over RON 4 million. In 2009, Romgaz made investments of RON 989.6 million and in 2010 they amounted to RON 788 million. In the first quarter of 2011, the company invested RON 259.6 million in its programs. (September 2nd 2011)

Transgaz Links Romania to Bulgaria
In a very short term (the end of June 2012), Transgaz representatives have proposed to complete the works for the interconnection of the natural gas transportation systems of Romania and Bulgaria. The project, valued at EUR 7.2 million, is in the stage of seeking a builder, through an auction, to perform the necessary works, respectively the gas metering stations and the high-pressure transportation pipeline from Giurgiu to Ruse. Among other complementary works, the specialists of the company from Medias say that it is absolutely necessary to also interconnect the communications system between SNTGN Transgaz and the counterpart company in Bulgaria, BulgarTrasgaz EAD through a dense network of optical fibers.
Two pipes of 2 km each
The estimated length of a crossing - including the undercrossing of the Danube - will be of 2,073 meters, the type of the undercrossing drilling being "horizontal directional." Danube will be crossed by a main pipe and a spare. Work valued at 7.2 million, excluding VAT, involving both technical project (three months after signing the contract) and actual execution. This step should be done in 12 months, "but preferably before June 15, 2012," said representatives Transgaz. The company declared the winner of the public procurement procedure will enter into a contract with the Romanian and one with representatives from southern neighbors, considering that 72% of work must be done in Romania and the rest of the estimated length of crossings - including Undercrossing Danube - will be 2073 meters, drilling Undercrossing type as "horizontally directed". The Danube will be crossed by a main pipeline and a spare pipeline. The work, valued at EUR 7.2 million, excluding VAT, involves both the development of the technical project (within three months since the signing of the contract) and the actual execution. This stage should be completed in 12 months, "but preferably before June 15th 2012", Transgaz representatives said. The company declared the winner of the public procurement procedure will sign a contract with the Romanian party and a contract with the representatives of our neighbors in the south, considering that 72% of the work must be done in Romania and the rest on the territory of Bulgaria.
Energy security in conditions of crisis, but implemented with delays
The work to interconnect the two countries is partially supported by European funds and, to date, it should already be in progress. The delays, however, are created by the "lengthy negotiations" between the Romanian and Bulgarian parties "for establishing favorable conditions that will lead to the award of this contract of strategic importance and whose completion within the period imposed (30/06/2012) depends on ensuring the energy security in conditions of crisis for both countries involved", it is said in a note signed by Transgaz management. The delays were mostly owed to the slowness of the decisions coming from Bucharest, Transgaz management pointed out. "We mention that the initiation of the process with a delay is not owed in any way to the inaction of the contracting authority, although some funds are grants that are obtained from the European Union on EEPR program, the difference is paid from own resources and the budget revision for the current year was made with great delay", the management of the company in Medias added. To recover some of the time lost, the deadline for the submission of bids in the auction to employ a builder was reduced to 30 days, the last day being September 14th 2011. (September 1st 2011)

Gas prices for companies to grow by up to 10%, probably in October
Industrial consumers of natural gas will pay higher prices by up to 10%, most likely as of October, according to commitments assumed by the Government to the IMF, and by the end of the year ANRE could decide another tariff hike, government sources declared for Mediafax. Government committed to the IMF to increase prices for industrial consumers in two stages, i.e. June-July and the fourth quarter of this year, without specifying the percentages of increases in the letter of intent. “After in July the price of natural gas for non-household consumers grew by almost 10%, most likely in October there will be another increase, by up to 10%”, sources stated. The International Monetary Fund (IMF) asked the Executive to present, by September, a staged timetable for natural gas prices liberalization until 2013 for companies and from 2013 to 2015 for the population. Price liberalization also targets the electricity sector. (August 30th 2011)

Nabucco Has Appointed a Consultant to Assess the Risks of Unexploded Munitions
Nabucco Gas Pipeline International GmbH has appointed the British company RPS Energy as consultant to assess the risks of unexploded munitions. The consultant will determine the possible existence of landmines and unexploded ordnance, along the entire route of the pipeline, Nabucco Company informs in a press release. "In order for Nabucco and its contractors to operate safely in all five countries, an overall assessment of the existence of possible risks associated with landmines and unexploded ordnance must be conducted. Before starting a complete study or reclamation operations, the initial risk assessment will help Nabucco determine the size and the level of the problem. It also will determine which areas require special attention. For these areas, a full study and a limited sanitation will be carried out", the statement said. The assessment will identify the plausible risks related to unexploded ordnance and it will make recommendations to mitigate. Nabucco represents a new way to transport Asian gas to Europe. Nabucco will connect directly the richest regions of the world in natural gas resources in the Caspian region and Middle East to the markets in Europe. The pipeline will connect the eastern border of Turkey to Baumgarten, Austria – one of the most important natural gas terminals in Central Europe – via Bulgaria, Romania and Hungary. Nabucco Gas Pipeline International GmbH (NIC) was established on June 24th, 2004 to develop, build and operate the Nabucco pipeline. Based in Vienna, the company operates on the midstream segment, it is organized according to the principles of unbundling and it is subject to the EU legislation. NIC is owned by Nabucco's shareholders and it is responsible for the development, the construction, the operation, the negotiation and the allocation of the capacity of the Nabucco pipeline. NIC will be the only company in direct contact with transporters; it will provide a one-stop-shop type solution and it will operate as an independent commercial entity on the market, acting independently of the parent companies. The pipeline system will be built by Nabucco national companies (NNCs), which are subsidiaries of NIC in each transit country. RPS Energy is a global consulting company that provides integrated technical support, commercial and project management in earth sciences, engineering and HSE for the energy sector. (August 29th 2011)

NAMR Extended by 3 Years Some Exploration Licenses of OMV Petrom (SNP)
The National Agency for Mineral Resources (NAMR) has approved a three-year extension of the exploration period for certain perimeters within the petroleum agreements signed with OMV Petrom (SNP), until September 2014, the President of the institution, Alexandru Patruti, said, according to Mediafax. Petroleum agreements are concluded over a period of 30 years and they include phases of exploration, development and exploitation and the extension of the first stage will not result in exceeding the duration of the agreement, Patruti said. He added that OMV Petrom has given up on about 25% of the total surface of the perimeters, and their number dropped to 10 from 14 originally. The Austrian group OMV said in May that OMV business may be affected if OMV Petrom exploration licenses that expire in September aren’t renewed by NAMR. "The activity of Petrom could be adversely affected if exploration licenses aren’t renewed. Most of the exploration licenses will expire in September. Their renewal is imperative for Petrom", it is shown in the prospectus made by OMV for a capital increase of up to EUR 900mln. The net profit of Petrom group rose by 14% to RON 1.744bn (EUR 417mln) in H1 and sales rose 23% to RON 10.271bn (EUR 2.457bn), due to favorable oil prices and the recovery of fuel and natural gas demand. OMV Petrom is listed on the BSE and it is controlled by Austrian oil and gas group OMV, which holds 51.01% stake. Among other shareholders include the Ministry of Economy, with 20.63% of the shares, and the Property Fund (FP) - 20.11%. (August 26th 2011)

Price of imported gas increased 16.7% in H1 2011
The price of imported gas in H1 2011 had an average of USD 405/TCM, up 16.7% against the similar period of the last year, when it stood at USD 347/TCM, according to the National Energy Regulatory Authority (ANRE). As for the second quarter, the average price of gas from Russia was USD 415/TCM, higher by 15.5% against the same interval of 2010. According to an ANRE report on the gas market, in April the import price was USD 431/TCM, in May – USD 424/TCM and in June – USD 391/TCM. In comparison, in April 2010 the import price was USD 364/TCM, in May – USD 361/TCM, while in June it decreased to USD 354/TCM. The share of imported gas was 19.91% in June 2011, compared with 9.2% in the same month last year. In the second quarter this year, the country’s gas consumption increased by 9%, to 2.55bn cu m, compared with 2.34bn cu m in the similar period of 2010. National consumption of gas grew in June this year by 14.2%, to 720mln cu m. (August 22nd 2011)

Former President Viktor Yushchenko: the Gas Agreement Signed in 2009 between Russia and Ukraine was a "Political Affair"
The former Ukrainian President Viktor Yushchenko filed a testimony today against Iulia Timosenko, BBC transmitted. Yushchenko told the judges that the agreement signed in 2009 gas was a "business affair", which caused significant economic damages to Ukraine. In the presence of Iulia Timoshenko in the courtroom, the former Ukrainian president said that the basis of the agreement signed after the discussions between Timosenko and the Russian Prime Minister Vladimir Putin was "a political scenario" rather than an economic calculation. He added that "Russia needed an authoritarian leader". The evidence of Viktor Yushchenko shows that Timosenko forced the state-owned gas company to sign a contract under which Ukraine would pay a very high price for the Russian gas. On the other hand, Iulia Timosenko denied the statements of the former Ukrainian leader, preferring not to argue with him in court.
Sources: the testimony of Viktor Yushchenko is false
The former Ukrainian president would have given false statements in the court in Kiev, saying that he was not involved in the agreement on the gas supply from Russia, a senior source from Kremlin declared, quoted by RIA Novosti. "Yushchenko has lied to the judges ... During his presidential mandate, he wanted to personally obtain political dividends and proposed the Russian President Dmitri Medvedev to sign a personal agreement to resolve the gas issues ... But he said that the problem is the responsibility of the heads of governments", the source said. The same source claims that during the telephone conversations he had with Dmitri Medvedev, Yushchenko said that he had full confidence in Iulia Tymoshenko, that the former Ukrainian Prime Minister is a very competent woman and that he will support all the agreements signed with Russia. Iulia Tymoshenko was arrested on August 5th after a motion filed by prosecutors. Timoshenko is accused of abuse of power in relation to the signing of "unfair" contracts for the Russian gas supply in 2009, and she risks up to ten years in prison. (August 18th 2011)

Transgaz Medias (TGN) Started Building the Gas Pipeline between Romania and Bulgaria
The national gas transporter Transgaz SA from Medias has started the construction of Giurgiu-Ruse pipeline, which interconnects the gas networks of Romania and Bulgaria, according to the data transmitted by the company at the request of NewsIn agency. "Transgaz completed the acquisition formalities of the works for the project in Romania (namely the gas metering stations Giurgiu and the onshore segment of the pipeline between SMG Giurgiu and the Danube undercrossing point on the Romanian shore). The contract was signed with the winner of the auction, respectively Inspet SA from Ploiesti, on June 8th 2011, and works are in progress", reads the data transmitted to NewsIn. Also, the documents for the joint procurement Transgaz-Bulgartransgaz, of the design and execution services (turnkey contract) for undercrossing the Danube have been completed. "We estimate that the tender for the design and execution of the Danube undercrossing works will be held in September 2011", Transgaz officials said. This would be the second project on the interconnection of the natural gas networks between Romania and neighboring countries, after last year in October Arad-Szeged pipeline, with Hungary, was inaugurated. (August 16th 2011)

Twice lower losses at Rompetrol Rafinare Constanta (RRC)
Higher crude prices helped Rompetrol Rafinare in the first half of the year, the company posting net losses of USD 63.7mln, at a consolidated turnover of USD 2.42bn. Losses are 47% lower than last year, but the turnover climbed by 37%, according to the report submitted to BSE. Oil prices higher by 44% and more expensive petroleum products (35% for gasoline, 44% for diesel) improved the situation of Rompetrol Rafinare. The operating result (EBITDA) grew from a negative level of USD 24.7mln in H1 2010 to a positive level of USD 49mln. “The results were supported by the program for the increase of Petromidia refinery’s capacity, by the increase by 7% of utilization degree of the refining capacity (82.3% in H1, 87% in Q2) and of quantities of raw materials processed, the increase of fuel deliveries and lower technologic consumptions”, the company’s report shows. (August 12th 2011)

Basescu Discussed with Roiss about Creating a Strategy to Develop OMV Petrom in Romania
President Traian Basescu discussed Wednesday with the CEO of OMV, Gerhard Roiss, about the possibility of a partnership with the Romanian authorities for a 10-years development strategy for OMV Petrom, a release of the Presidency informs. The Romanian President said that OMV Petrom is a company of great importance for Romania, with a strategic role in the energy field. In this context, they discussed the possibility of a partnership with the Romanian authorities for a 10-years development strategy for OMV Petrom. During the meeting, they also discussed issues such as the company's investment plans in Romania, extending explorations at high depths in the Black Sea continental shelf, the perspectives of fuel and gas prices and environmental protection, it is said in the communiqué. (August 11th 2011)

Higher crude price drove Petrom’s operating profit up 86% in Q2
OMV Petrom’s operating profit, excluding the special elements at group level, climbed by 86%, to RON 1.26bn in Q2, due to favorable oil price, while the net profit without the special items grew by 38%, to RON 935mln, compared with the same period of 2010, the company announced on Wednesday. “The second quarter indicates a good operating performance. In the context of favorable oil price, we benefited from the production level growth and the recovery of fuel and natural gas demand, both in the industrial and commercial sectors, especially in Romania”, Mariana Gheorghe, CEO of OMV Petrom, declared. She added that for the first time since the privatization, the company managed to slightly increase, for the fourth quarter in a row, the group’s average daily production flows. “In the exploration activity we recently recorded progresses, with a potentially significant gas discovery (Totea) and with the decision to enter a new phase of exploration in the deep waters of the Black Sea, in partnership with ExxonMobil”, Mariana Gheorghe added. She stated that the high crude price had put pressure on refining and marketing margins, due to higher costs with own oil consumption and the demand still low of retail activity. OMV Petrom official added that the company would continue to focus on completing the commissioning of the two power generation units in the second half of 2011. (August 10th 2011)

Conpet to modernize an oil pipeline for Rafo Onesti
The company Conpet Ploiesti is participating in an auction to replace 13km of pipeline that feeds Rafo Onesti with crude oil from the port of Constanta. The investment, which amounts to over RON 9mln, comes in favor of the Modernization Program of Onesti-based refinery. The Chairman of the Board of Directors of the company Rafo Onesti, Miroslav Dermendjiev, company’s general manager, declared some times ago, that he was determined to start and complete the modernization project and to restart the refinery, in the two previously announced stages. The repeated postponement of the Modernization program and the restart of installation gave the possibility of occurrence of negative scenarios, but against which the leader of Rafinorul Union, Ion Marian, wanted to fight. “There were searched – Ion Marian said – solutions of partnership and financing, which have resulted in signing agreements and striking a deal with a financing unit for the first working stage”. The pipeline Constanta – Onesti is the main route of oil supply for Rafo, used dozens of years for this purpose. The refinery was located so far from the Port of Constanta because they wanted the follow a strategic plan of fuel supply of country’s north-eastern side, but also the north and the west of Transilvania. Rafo is one of the largest five refineries of Romania, of which only three are now operating. According to the legislation in force (Oil law) and the National Oil Transmission System, which is part of the public domain of national interest, is of strategic importance. (August 9th 2011)

An industry dies because of gas prices for the population
For two months, the plants are paying a higher gas price for the population to be able to pay the same price as before. This can lead them to bankruptcy, causing unemployment and even threatening the economic growth, already fragile. Until June this year, the regulated gas price was the same for household consumers and plants, being calculated as a weighted average between the domestically produced gas and the Russian gas. After repeated demands from large gas suppliers, GDF Suez and E.ON, the Government decided to increase the gas price. But only for factories, the population following to pay the same price as before, at least until after the winter of 2011-2012. There were created two gas baskets: in that for the population was included, mostly, domestic gas, while the plants remained with about 40% of Russian gas. Currently, the Romanian cubic meter of gas cost USD 165, while the Russian gas – USD 500. The Energy Regulatory Authority said in May that the gas price hike for plants will be around 10%. Market players say, however, that in reality the increase was much higher. “We closed two factories and we are left with only two. The biggest economic stupidity possible. To destroy an industry that brings jobs and money to the budget and to keep unchanged the price for the population, not even to lower it. Because from spring the population will pay much more. Plants are broken down and people pay more”, declared for Money.ro Ioan Niculae, owner of InterAgro, the biggest gas consumer in the country, after the population. According to him, the only ones to benefit would be the two large gas suppliers, E.ON and GDF Suez, which would gain an additional amount of USD 200mln per year. “It’s quite easy. They take most of the gas with USD 160, I take almost half of the needs with USD 500. About USD 12mln per month return to these multinational companies. They take at very cheap price and they sell it at the regulated price, I’m forced to buy expensive gas and I become uncompetitive”, Niculae added. About the same problem speaks an official of the Ministry of Economy, but less vehemently. He showed that the ANRE decision to create two gas baskets has led to greater problems in the market, because the shock of higher prices for imported gas has been absorbed only by the industry. “I don’t know if it’s the best solution. We work on other versions. One would be the gas prices liberalization as of this autumn, so the market to make the price. And keeping at the same time the regulated price for the population with low incomes. It’s a very serious problem what happens now in the industry and we will have to have serious discussions with ANRE, to see how we can solve it. One can not bury someone to protect someone else. It’s possible to affect the slight economic growth we have”, the MEC official stated, who wanted to remain anonymous. Prior to June 2011, gas prices were unchanged for two years. Gas distributors were saying that they were recording losses of dozens of millions of dollars from setting this price, in conditions in which the imported gas price climbed, in this period, by 50%. E.ON and GDF Suez welcomed ANRE decision to increase by 10% the gas price for industry, but their representatives said more increases were required. The gas price for the population is frozen until April 1st 2012. The Romanian chemical sector is the largest consumer of gas in Romania, with about 3bn cu m per year. (August 5th 2011)

Unions Demand 10% of Transgaz’ Profit for Company's Employees
The Trade Unions Federation Gaz Romania has sued Transgaz Medias (TGN), requiring the company to pay 10% of profit to the employees, as provided in a series of laws and collective labor contracts. The action filed by the trade union was registered in Sibiu Court and the first hearing was set for September 14th, a statement sent by Transgaz to BSE (BSE) mentions, Mediafax reports. The company said that it would distribute dividends representing 90% of the profit of over RON 376mln (the equivalent of EUR 89mln). Dividends will be paid by Transgaz starting October 17th through BRD. Transgaz is controlled by the state through the Ministry of Economy, which owns 73.5% of the shares. The Property Fund has a 14.98% stake in Transgaz capital, while several shareholders accumulate 11.5% of the equity. (August 3rd 2011)

Gazprom has made an offer for Rompetrol’s filling stations in Romania
Serbian oil company NIS, controlled by Russian group Gazprom, submitted two months ago a letter of intent to acquire the Romanian filling stations network owned by Rompetrol group, which declined the offer. “NIS Group has made an offer to take over the filling station network in Romania”, declared the President of Rompetrol group, Saduokhas Meraliyev, adding that the group had declined NIS’ offer. He did not disclose the value of the offer. In turn, the vice-president of the fuel distribution activity within the Rompetrol group, Titov Buzescu, showed that the Rompetrol group valued its filling stations network in Romania at EUR 500-600mln. According to Buzescu, Gazprom group is already present on the fuel distribution market in Romania through Sun Petrol units. In the opinion of Rompetrol representatives, the offer received from NIS is an indication of Gazprom’s intention to extend on the profile market in the region. The Rompetrol group, owned by the company KazMunaiGaz in Kazakhstan, is the second player in terms of size on the fuel distribution market in Romania, with a network of 800 fuel distribution points, of which 450 are filling stations, after Petrom. Rompetrol plans to open in two months a subsidiary in Instanbul and to extend its fuel distribution activity in Turkey and Ukraine. The group also owns filling stations in France, Bulgaria, Moldova and Georgia. (July 20th 2011)

Condmag Brasov (COMI) Has Signed an EUR 3mln Contract with OMV Petrom (SNP)
The company that builds oil and gas pipelines Condmag Brasov began the pipeline installation works for OMV Petrom, for which it will receive RON 12.5 million in November. Recently, the company Dafora Medias, the majority shareholder of Condmag, has announced the signing of a contract worth 23 million euros with OMV Petrom. The contract with OMV Petrom occurred in an appropriate moment, because the company's turnover decreased more than fourfold to RON 11.6 million in the first quarter compared to the same period last year. However, the profit of Condmag (COMI) had increased by 50%, but only up to RON 1.5 million. The company depends on clients such as Transgaz Medias, which manages the natural gas transportation monopoly and the natural gas producer Romgaz Medias and has, to a lesser extent, relationships with gas distributors and OMV Petrom. The price of COMI shares committed at Bucharest Stock Exchange (BSE) fell by 38% this year, to RON 0.2828 / share, a price at which the market capitalization (the market value of the company) stands at RON 108 million. (July 19th 2011)

Future gas storage facilities and the modernization of the transmission network involve investments of EUR 750mln
The increase of the natural gas storage capacity in underground deposits and the rehabilitation of the national gas transmission system require investments of over EUR 750mln, according to the estimates of the state-owned company Transgaz Medias (TGN), operator of the transmission network. “New deposits are scheduled to be arranged in the semi depleted deposits, optimally located to deficient areas and in salt caverns for the areas with daily and hourly fluctuations of consumptions”, shows a study of the company, quoting information from an energy strategy project of the Government. The amounts needed to supplement the gas storage facilities amount to EUR 500mln. The existing gas deposits have a total annual capacity of three billion cubic meters of natural gas. Investments to increase by 50% the extraction flows from deposits amount to EUR 180mln, until 2012. The gas producer Romgaz Medias is the largest operator of storage facilities in Romania. The French-Belgian group GDF SUEZ, present on the Romanian energy market since 2005, has two small deposits. Transgaz needs by 2013 investments estimated at EUR 256mln to rehabilitate the networks. The document does not specify the finance sources for the projects. Romgaz and Transgaz are owned by the state, through the Ministry of Economy. (July 11th 2011)

Foraj Sonde Ploiesti Wants to Buy Equipment of EUR 4 Million in Leasing
Foraj Sonde Ploiesti shareholders approved the borrowing of three million euros necessary for carrying out the activity for the years 2011 - 2015, but also a four million euros lease for drilling equipment. The loans will be guaranteed with the future claims according to the contract that will be signed with OMV Petrom, movable and immovable property of the company (own equipment, buildings and land located in Baicoi, Prahova County, and the dormitory for singles). The company recorded last year a net loss of RON 3.096 million, in the context in which its earnings were of RON 23.812 million, while expenditures stood at RON 27.728 million. The company headquartered in Baicoi is controlled by Bayliner Overseas Limited, which holds an 88.242% stake. Bayliner Overseas Limited is owned by the investment fund Quadrant Sierra Investments. (July 6th 2011)

An important day for Nabucco: the transit countries signed the Project Support Agreement
The legal framework of Nabucco project has been completed and the Project Support Agreement was signed by each transit country, Nabucco Pipeline International GmbH informs. The legal framework for Nabucco Gas Pipeline was completed today, through the signing, in Kayseri, Turkey, of the Project Support Agreements between Nabucco Gas Pipeline International GmbH and the ministries involved of the five transit countries (Austria, Bulgaria, Hungary, Romania and Turkey). Those are bilateral agreements, with statutory nature, specific, between the Nabucco companies and the government of each transit country. They are an important step in the advanced stage of development of Nabucco Gas Pipeline. The main elements of the Project Support Agreements are: the announcement of a regulated regime of advantageous transit, which falls under the EU and Turkish energy laws; the protection of the Nabucco Gas Pipeline against possible discriminatory legal changes; support for legal and administrative actions needed to implement the project. They are also the commitment of each government in supporting the project. Together with the Intergovernmental Agreement, these agreements are requirements needed for the project’s successful financing. They establish a stable and long-term regulatory regime, necessary for the international financing group to provide the funds for one of the largest natural gas transmission projects worldwide. “The signing of the Project Support Agreements is another important stage for our project and it consolidates the partnership with the government of transit countries. Today’s event also marks the first meeting of Nabucco Political Committee. It will ensure an efficient coordination between the transit countries. We are pleased with the solid and unique ground of the project and we welcome the support that it enjoys politically and financially. Nabucco symbolizes the future of global cooperation in the energy field. It connects companies, consumers, countries and cultures, providing at the same time diversification and security in supply for many decades ahead”, said Reinhard Mitschek, Managing Director, Nabucco Gas Pipeline International GmbH. In turn, Werner Auli, Chairman of Nabucco’s Steering Committee and head of the Gas&Power division with OMV, said that the “shareholders are stating their firm commitment for Nabucco Gas Pipeline and we are confident in the encouraging progress of the project so far. The natural gas demand in Europe will grow considerably in the next decade and Nabucco Gas Pipeline will be the preferred way of transportation for gas suppliers in the Caspian Region. Negotiations with suppliers are going well and the interest towards Nabucco grows each day”. (June 8th 2011)

Moldova could use Romania’s underground storage facilities to keep strategic reserves of natural gas
The Republic of Moldova explores the possibility to use Romania’s underground storage facilities to keep the strategic reserves of natural gas. The declaration belongs to the Deputy Prime Minister, Economy minister of the Republic of Moldova, Valeriu Lazar, during the Moldovan – Romanian Investment Forum, which was held in Bucharest, at the end of the last week. According to Valeriu Lazar, the feasibility study is under preparation. After completing this document it will be decided the most convenient thing for Moldova: the construction of deposits to keep the strategic reserves of natural gas on country’s territory or using the deposits on other states’ territories, Romania in particular. Valeriu Lazar mentioned that, according to preliminary estimates, for Moldova it was more convenient to use the Romanian deposits, because their construction would involve huge financial resources. In particular, it’s examined the possibility to use underground storage facilities in Margineni, Romania. The problem of creating underground natural gas storages occurred in 2009, after the conflict between Ukraine and Russia, which affected most states that could not receive Russian natural gas because Ukraine blocked the transit. The representatives of the Ministry of Economy of the Republic of Moldova believe that reserves of natural gas in underground deposits will consolidate country’s energy strategy and will offer the possibility to cover, in case of need, the deficit of Russian natural gas supplied in the Balkan states during the winter. The European Bank for Reconstruction and Development has previously promised to finance the feasibility study for the construction in Moldova of underground natural gas storage facilities and to examine the possibility to finance the construction itself. The sides agreed to undertake a study on the need to build in Moldova underground deposits, their location, volume and estimative cost of investments required. (June 7th 2011)

OMV discovered oil in the Kurdistan region of Iraq
OMV, the leading energy group in Central and South-Eastern Europe, say an exploration success at block Bina Bawi, in Kurdistan region of Iraq, the company informed. Currently, OMV drills an exploration well (Bina Bawi 3) and discovered hydrocarbons in one of the main investigated areas. The well continues the drilling and the company will investigate the discovery during its exploitation, including through the depth evaluation. “We are delighted to announce the discovery of crude. At the first analysts, it’s a good quality oil, which surfaced after an extraction test. We will continue the drilling and I’m confident that the final results will be promising”, declared Jaap Huijskes, board member of OMV Exploration & Production Division. With group’s sales of EUR 23.32bn and a labor force of 31,398 employees in 2010, OMV Aktiengesellschaft is one of the largest Austrian industrial companies listed on the stock exchange. In E&P OMV activates in two main countries, Romania and Austria, and owns an equilibrated international portfolio. At the end of 2010 OMV owned proven reserves of oil and natural gas of approximately 318,000 boe/day. In Natural Gas & Energy, OMV sold approximately 18bn cu m of natural gas in 2010. In Refining and Marketing (R&M), OMV had at the end of 2010 an annual refining capacity of 22.3mln tons and approximately 4,800 fuel distribution stations in 13 countries, including Turkey. (June 6th 2011)

22% share for gas imports in June
ANRE (the energy market regulator) has set for June a share of gas imports of 22% to cover consumption needs. The gas demand for June is estimated at 8.78mln MWh, of which the captive market represents 1.7mln MWh. Household consumers are allocated with 745,000MWh. The demand from eligible consumers is of 6.2mln MWh and the technological consumption reaches approximately 793,000 MWh. (May 30th 2011)

Burgas Alexandroupolis Oil Pipeline Has Money Only for Another Month
The project of the oil pipeline Burgas Alexandroupolis has heavy financial problems caused by Bulgaria, the Russian Energy Minister Serghei Smatko revealed yesterday. The interstate commission led consultations without any result, the Russian official said. The intergovernmental agreement for the construction of the 300 kilometers long oil pipeline was signed by Moscow, Sofia and Athens in 2007, and in 2008 the Trans Balkan Pipeline consortium was founded, with Russian majority shareholding (51 percent, owned by the companies Transneft, Rosneft and Gazprom Neft) and the remaining titles owned in equal shares by Greece and Bulgaria. Works on the project have faced chronic difficulties, Transneft complaining several times of the lack of funding from the Bulgarian party, which has accumulated total debts of EUR 7.3 million. In February 2011 an agreement was signed, according to which the Bulgarian party was supposed to pay its arrears until March 20th, but no money was paid, not even until today, and in this circumstances Transneft announced that the current funding will cover the expenses with the works only until June. Yesterday, the Russian Energy Minister admitted that, due to financial problems, the construction costs of the oil pipeline will be minimized. Meanwhile, information about the suspension of the Balkan project occurs more often in the media. Burgas-Alexandroupolis oil pipeline, with a capacity of 35 million tons of crude per year, is designed to provide oil transportation by bypassing Bosphorous and Dardanelles straits, but the project already has a competitor, Samsun Ceyhan oil pipeline, RIA Novosti noted. (May 19th 2011)

Russia: If You Sold Distrigaz to Gazprom, You Would Have Received Cheaper Gas
Romania could have direct commercial relationships with the Russian group Gazprom if it would offer something in return, to be able to import gas directly from the Russian Federation at a lower price, Igor Sidorov, economic adviser at the Russian Embassy in Bucharest, declared Tuesday. "Romania would not necessarily get a better price for gas, if it would eliminate the intermediaries, but if it would offer something to Gazprom group, if it would make a step towards Gazprom, it might", Sidorov said at the meeting of the Ministers Economy from the Member States of the Black Sea Economic Cooperation Organization, held in Bucharest. He added that if Romania would have sold Distrigaz Sud to Gazprom, who wanted to buy it, the state would have had a better price for gas today. Distrigaz Sud was taken in 2005 by the French group Gaz de France. Sidorov added that, when Romania was importing gas directly from Russia, it was a bad payer, but once in the relationship between Romania and Russia intermediaries approved by Gazprom have occurred, the Romanian authorities have honored their payment obligations. The economic Adviser of the Russian Embassy in Bucharest also said that Gazprom could supply to Romania the entire amount of gas needed at national level, but such a proposal should come from the Romanian Government. Romania imports from Gazprom through the companies WIEE and Imex Oil, with whom it has agreements until 2012. According to an analysis published by Hotnews.ro, the price paid by Romania, namely $ 400 for 1,000 cubic meters, is higher than the price required by Gazprom for the gas sold in Bulgaria, Hungary, Italy, Germany, Austria and France. WIEE is owned by WIEE Zug Switzerland, a joint venture founded in 1993 by Wintershall (from the German group BASF) and the Russian group Gazprom, with the purpose to supply Russian gas to south-eastern European countries. According to company data, WIEE has supplied more than 48 billion cubic meters of natural gas to Romania. Imex Oil is owned by the company Conef, which is controlled by Vimetco, the majority shareholder of the aluminum producer Alro Slatina. (May 18th 2011)

Basescu: Nabucco Is a Viable Project, As Long As the Partners Are Azerbaijan and Turkmenistan
President Traian Basescu said on Thursday that the Nabucco Project was viable as long as Azerbaijan and Turkmenistan are partners, considering the request of the Turkmen side to have guarantees that the gas would be needed and purchased “absolutely correct”. “I have to say publicly that I am very happy about Turkmenistan’s willingness to participate in the EU energy policy by developing the Southern Corridor. At the same time, however, we consider absolutely correct Turkmenistan’s direct request to participate in these projects based on two fundamental elements: a political agreement between the EU and Turkemenistan and the establishment of a consortium which will carry out the pipeline under the Caspian Sea between Turkmenistan and Azerbaijan”, President Basescu said. He made a statement, so that there are “no doubts”. “Romania supports Turkmenistan’s position to have a legally binding agreement signed at the highest level, before embarking on the quest to set the consortium which will make possible the transport of gas between Turkmenistan and Azerbaijan in order to have guarantees that the gas will be needed and purchased”, Basescu added. He said that “the Nabucco project is a viable project, as long as the partners in these projects are Azerbaijan and Turkmenistan”. The Head of the Romanian State made these statements after he had met with the Turkmen counterpart, Gurbanguli Berdimuhamedov, on an official visit to Romania. The Nabucco project aims at increasing the European energy security by diversifying the resources of natural gas, which largely depend on the imports from Russia. The pipeline will bring gas from Central Asia on the route Turkey-Bulgaria-Romania-Hungary-Austria. The shareholders of the project are OMV (Austria), Transgaz Medias, Bulgargaz (Bulgaria), MOL (Hungary), BOTAS (Turkey) and RWE (Germany). The capacity of the pipeline is estimated to be of 31bn cu m per year, and the costs of the investment are estimated at EUR 7.9bn. (May 13th 2011)

Petrom's Gas Production Increased by 2% in Q1 to 1.3bn cu m
Petrom, the largest oil and gas producer in south-eastern Europe, had a production of 1.3bn cu m of natural gas in Q1 2010, 2% higher compared to the same period last year, of 1.28bn cu m. Also, the production of oil, gas and condensate at Group level was of 16.78mln boe in Q1 2011, 1% higher compared to the same period in 2010 due to increase of gas production in Romania and oil and gas production in Kazakhstan, according to a report submitted on Wednesday to Bucharest Stock Exchange (BSE). The volume of sales increased by 1% in the first three months of this year compared to Q1 2010, reflecting the evolution of production. In Romania, the total production of oil, gas and condensate was of 15.75mln boe, 1% lower than in Q1 2010. Also, the production costs in Romania increased from RON 47.48 (boe in Q1 2010, to 50.28mln boe in Q1 2011). The average gas price for producers in Romania stood at USD 160/TCM, up compared to USD 166/TCM in Q1 2010. The domestic oil production was of 7.33 million barrels, 3% below the level recorded in Q1 2010, mainly due to the natural decline in production, entirely uncompensated by the new drilled wells and overhaul programs. "The domestic gas production obtained in Q1 2011 was of 8.41mln boe, 1% higher than in Q1 2010, due to the start of production from new wells, including an off-shore well at Lebada Vest deposit, and because of good results obtained after major repair works onshore", the report said. The oil and gas production in Kazakhstan has increased by 27% in Q1 2011, to 1.03mln boe due to the gradual implementation of the Komsomolskoe deposit into production. In Q1 2011, the total natural gas consumption of Romania increased by 1% compared to the corresponding period last year, despite the expiration date at the end of October 2010, of the facility granted to interruptible customers, providing supply of cheap gas only from domestic production (facility granted in mid 2009). (May 12th 2011)

Franks, IMF: The Energy Price for the Population, Fully Liberalized in 2015
The head of the IMF mission, Jeffrey Franks, confirmed this morning what President Traian Basescu suggested Saturday, namely that the energy price for the population will be fully liberalized only in 2015, while for the economy the process will end in 2013. Franks said this morning during a press conference at the NBR that gas prices will be liberalized in stages, until 2013 for companies and from 2013 until 2015 for the population. "For companies, the decision was that the adjustment would occur gradually, until 2013, and for households, later, until 2015. But the government will have to define in the next period, namely to align to European rules that define households and the categories of population entitled to receive subsidies. President Traian Basescu said Saturday that a full liberalization of gas and electricity prices for the population should be postponed until 2015, with the entry into the euro zone, noting that the revenues of Romanians are much lower than those of other Europeans. (May 10th 2011)

Gas Suppliers Complained before the IMF That They Have Lost RON 800mln Due to Regulated Prices
Representatives of the IMF delegation in Romania and the Association of Energy Utilities Companies (ACUE) have had a working meeting in which they talked, among other things, about the subject on the liberalization of energy price. "Justified increases of the prices have not been applied since Q4 2009 and gas suppliers have accumulated losses of over RON 800mln. Companies are continually forced to sell gas below acquisition costs on the regulated market and act as "social protection financing organizations", ACUE stated. Among the members of ACUE are E. ON Romania, ENEL Romania, CEZ Romania, GDF Suez Energy Romania, RWE and Electrica. The situation will worsen in the coming period due to increases of the prices for imported gas and the delay will lead to serious liquidity problems for gas suppliers, ACUE representatives say. They claim that the regulations in force are constantly violated by ANRE due to the lack of independence and strong political influence upon the authority. "While the regulations should be respected, gas prices should be increased in a first stage to avoid at least current losses of the gas suppliers", ACUE members said. According to ACUE representatives, so far, the Romanian authorities have only delayed and obstructed the liberalization schedule. (May 6th 2011)

A Social-Democrat Deputy Wants to Temporarily Ban the Export of Gas
Romania must block, by law, OMV's intention to transform Romania in the third exporter of natural gas, deputy Iulian Iancu (the Social Democrat Party), Chairman of the Industries and Services Committee, considers, quoted by NewsIn. The Social Democrat Party will present before the Parliament a draft law which stipulates that Romania's natural gas export to be banned until gas import sources are diversified. "OMV's announcement to transform Romania in the third exporter of natural gas in Europe will create a dramatic effect on the population, a number of chain reactions of unforeseeable risks on Romania as a whole", Iancu said on Tuesday in a press conference. (May 4th 2011)

Sterling Resources: NAMR has not approved the transfer of shares to Petro Ventures and Gas Plus
“Sterling Resources Ltd. has submitted to the National Agency for Mineral Resources (NAMR) a notice of default following the disapproval by NAMR of the transfer from Sterling to its farm-in partners Petro Ventures Europe BV and Gas Plus International BV of an interest of 20% and, respectively, 15% in the concession regarding perimeters Midia and Pelican in the Black Sea”, the Canadian company announced on Monday in a communiqué. On January 24th 2011, Sterling and its partners have submitted, at NAMR’s request, new applications, supported by the documentation necessary, requiring the transfer to its partners of interests in the concession, according to the representatives of Sterling. “These applications followed and prevail to previous attempts started by Sterling in April 2009 (when they submitted for the first time the transfer requests) to obtain the transfer in question to its partners”, the release also shows. According to the Concession Agreement, NAMR has the exclusive authority to approve these transfer requests and has the obligation not to retain or delay unreasonably the approval of such requests and to solve them within 90 days. (May 3rd 2011)