Positive developments in the legislation rise hopes for the offshore sector


This October, Bucharest hosted the 5th edition of the Black Sea Oil & Gas conference, organize by GBC. There were two days of unrivaled networking, and updated information on existing and pending offshore and onshore activities in the region. As a media partner, energynomics.ro had the chance of some insightful dialogues with some of the top experts and decision-makers participating.

We will be the first to get gas out of the Black Sea!

Mark Beacom, Managing Director with Black Sea Oil and Gas, mainly talked about the numerous regulatory issues that they had to get through for advancing their project at the Black Sea. „For the regulatory environment to be put in place, we have been working with the Government and a new offshore law has recently come out of the Cabinet, and has been put to Parliament. This is the combination of over a year and a half of work between RBSTA – Romanian Black Sea Titleholders Association – and the Government, directed by the PM’s cabinet office, to go through and find all the little bits and pieces that are stopping a project from getting through the regulatory process. Once this law project gets through the Parliament, we will have a line of sight to being able to permit our project, for the first time ever”, said Mark Beacom.

Black Sea Oil and Gas teamed up with the EBRD, as the bank takes a very specific angle – which is to support new promising developments. “We have been discussing for some time of them taking an equity interest in the company in order from them to assist us and getting through the blockages and the marketing issues that exists in Romania. This is not finished, yet, but their board has approved the deal, and this gives an indication of how far down the track we have reached”, explained Beacom.

EBRD has also involved in order to support another piece of legislation being implemented in Romania, the OSD – Offshore Safety Directive. “This is also a huge development, because in order to have an offshore development we have to have OSD consent, under the UE directives”, said Mark Beacom. “The fact that there is a president [of the newly-established Competent Authority for Regulation of Offshore Oil Operations in the Black Sea], that he has started to staff up, with the financial support from the EBRD, is another positive development”.

The third positive legislative project is the royalty law, under public debate at the moment, which stabilizes the royalties regime for contracts already in place.

There are still some concerns related to the final form of the law for approving the GEO 64/2016, especially in regards to the idea of introducing a monopoly trading platform and of a mandatory percent of gas to be traded on that platform. „In order for us to get this project developed, we need to be able to have a single long term gas buyer”, said Mark Beacom. “This is just the normal way of developing an offshore gas field. We need predictability that for every day we are going to produce our gas we have a gas buyer arranged at certain commercial terms.”

DNV GL – a source of unbiased perspective on risks assessment

Nils Andreas Masvie, Vice President Eurasia with Oil and Gas DNV GL, elaborated on the perspectives of the Black Sea offshore operations. „The current production of O&G in the Black Sea is not very big, but we see that the Black Sea is an area where you have hydrocarbon resources and, at the same time, it is an important travel route for hydrocarbons, so we have a great focus and interest in that”.

As an independent foundation headquartered in Norway, with no external shareholders, neither governmental, nor private, DNV GL has been active for more than 150 years offering services related to risks associated with the maritime and later also with the O&G industry. “The O&G industry in general, and the offshore O&G industry in particular, is a very international industry, with a lot of technological innovation and new developments allowing for operation in deeper and deeper waters. Horizontal drilling and developments where you do not need a platform, but you can have subsea completion, are just some examples of how technology developed someplace else can be very easily used and adapted in new O&G provinces. That is why experiences and lessons from the North Sea can be used and applied at the Black Sea”, added Nils Andreas Masvie.

International operators have an important role in engaging and communicating directly with the authorities in the countries where they operate, but certainly independent organizations can contribute to this dialogue, with an unbiased perspective on what are the safest and best ways to address issues. „The common theme of what we do is that we use technological competence and our experience from all around the world to analyze the risks. Together with the operator, but always as an independent body, we develop a program where the risks can be controlled, mitigated or minimized. So that if the operator would like to use the results from our work to show to other parties – such as government, insurance companies, or project financing companies – they will know that somebody completely independent of the operator has also been looking on the business”, explained the DNL GV representative.

Safety is part of the business

Georgios Panopoulos, CEO of Management Force Group, talked about their expertise in getting the gas and oil from offshore onshore. “Our company is specialized on health and safety, but safety approached in a holistic way. It is safety for business, safety for environment and safety for people”, he said. The company has started in Greece, and now it has subsidiaries based in Romania, Bulgaria and Albania. “We approach safety from conception design, down to decommissioning and demolishing and handing-over the land.”

Management Force Group had already had some big projects in Romania, one of the power plant in Brazi, which puts Georgios Panopoulos in a good position to evaluate the specific differences in how people understand HSE issues in Romania, when compared to people in other areas in Europe. ”In regards of health and safety, there is a line somewhere that separates the North and West of Europe, and the rest of Europe. In the rest of Europe, for various reasons, different in Ukraine, Romania or Greece, safety has not reached the same level it is in the N-W Europe. Safety is not an issue yet, and it has not entered into the business equation as it had in the N-W Europe”, he said.

„Nowadays, there is a lot of talking about quality management systems, or safety management systems and procedures. They have been developed 20-30 years ago by O&G companies, because they thought they had to optimize their performance and looked for excellency. For if you leave a gap and an accident is happening in this industry, then the loss is devastating”. That is why O&G industry is leading the pace in health and safety, considers Georgios Panopoulos – with maybe only the army and aerospace placed higher than the O&G industry.


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