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Kraft (ROPEPCA): Romania should encourage investment in the manufacturing industry in order to use its natural gas

18 July 2018

The best solution for the using domestic natural gas at home would be for the Government to motivate the industry to invest in their processing, said Harald Kraft, Chairman of the Romanian Association of Petroleum Exploration and Production Companies – ROPEPCA, during the conference for the launch of the Energy Strategy Summit 2018 report.

The adoption of the Law for the approval of GEO 64/2016 is an important step, said Harald Kraft, who noted, however, that the obligation to sell half the production on centralized markets under standardized contracts does not motivate investment. According to him, the best argument for investing is the existence and the proper functioning of a free market, or “with such obligations one cannot talk about a free market.”

“We are producers, not traders”, insisted the Chairman of ROPEPCA, “and this obligation forces us to set up trading departments dealing with trading on the centralized markets and this only means more bureaucracy”. “If we are forced to sell on the centralized market, we have no certainty as to the volumes and the prices we will sell at”, said Harald Kraft, who also mentioned the risk that the authorities would change the mandatory quota, at any time. “According to the law, the regulator may annually change this mandatory quota, theoretically up to 100%. How can we conclude bilateral contracts as we do not know what next year’s quota will be?”, noted Harald Kraft.

The Chairman of ROPEPCA also commented the argument, mentioned also in connection with the Black Sea project, according to which Romania must benefit from its national natural resources. “We, ROPEPCA, support this idea, but I do not think that the obligation for the producer to sell at least half of its production on the centralized market based on standardized contracts is beneficial to the Romanian economy. In addition, [even under these circumstances] a trader might buy and export gas produced in Romania.” According to the ROPEPCA representative, Romania should not sell natural gas as primary resource, but to process it; for this, the Government should stimulate investments in petrochemicals or gas to power plants.

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