Petroleum Club Romania

On December 1st at the COP28 was launched the Annual International Methane Emissions Observatory (IMEO) report in which it is announced that XP has achieved the Gold Standard Pathway status from the Oil & Gas Methane Partnership (OGMP 2.0). This acknowledgment reflects XP commitment to develop a credible and robust implementation roadmap to achieve the highest level in methane emissions monitoring within the next 3 years. This achievement underscores XP’s unwavering dedication to addressing methane emissions with transparency and responsibility. OGMP 2.0 is the leading initiative from the United Nations Environment Program, Environmental Defense Fund, and the Climate and Clean Air Coalition dedicated to improving methane emissions reporting within the oil and gas sector. “We appreciate OGMP’s recognition and look forward to being part of the global effort to address methane emissions in the oil and gas industry. As such, we remain committed to implementing our roadmap and to continue our efforts to reduce methane emissions across our operations and reach our target of 0,2% methane intensity by 2025,” David Martinon – XP’s CEO said. ‘An eye on methane: The road to radical transparency’ 2023 report takes stock of progress harnessing an imminent data revolution that can accelerate methane reduction on a global scale. Credible data has the potential to deliver the transparency needed for rapid climate action, but only if reconciled, integrated, and put into the hands of those who can act on it. The International Methane Emissions Observatory’s third annual report provides decision makers a framework of action to track and monitor methane emissions to plan targeted and ambitious action for their mitigation. OGMP 2.0: Radical transparency in the Oil and Gas sector OGMP 2.0 was engineered to evolve, ensuring that the programme could move from aspiration to practice, while remaining steadfast in its theory of change and embracing the differing starting points of individual members’ journeys to reduce methane emissions. This transformation embraces the process, resulting in credible and steady progress while adhering to the OGMP 2.0 timeline for incremental progress, rather than the endpoint alone. OGMP 2.0 has a principle-based, rather than a rule-based approach, to accommodate the operational diversity of its members and to allow innovation in measurement and mitigation approaches. While members join in various stages of their emission discovery and the required mitigation, Gold Standard reporting sets out rigorous deadlines against which a member must transition its emissions understanding to greater granularity and higher quality. Members commit to improve the quality of their methane emission data to Levels 4 and 5 by the third year of reporting for all material operated assets and by year five for all material non-operated assets. They document this with a comprehensive implementation plan. Through the rapid transition to higher-quality and more complete understanding of emissions, on an asset-by-asset /basis at the source level, operators develop the critical data necessary to implement meaningful mitigation and for asset managers to prioritize capital towards the largest and most cost-effective reduction opportunities. More than half of the current OGMP 2.0 members submitted their second annual report in May 2023. This means that they will transition to Gold Standard reporting in 2024, with implementation of their Level 4 methods and Level 5 reconciliation well under way. About XP XP, former Expert Petroleum, have more than 18 years of operations on redeveloping mature oil and gas fields to make them safer, greener, and more productive. Based on the strong experience the company rebrands in 2022 as XP continuing the journey and support its partners even further towards sustainable upstream operations. XP share its knowledge and expertise both to production enhancement under its Uplift division and operations decarbonization solutions under the Upgreen division.

by Eugen Calin Popa, Design Department Coordinator, METAN GRUP Co-author: Ioan Gheorghe Popa, General Director, METAN GRUP Romania is in the process of modernizing its gas distribution infrastructure by adopting new types of smart gas networks. This technological evolution, especially through the POIM 8.2 program promoted in 2020 (estimated budget 235m EUR), brings multiple benefits, expected for quite a long time, in addition to increased safety in operation and the financial resources allocated by the European Union to promote it. There have been two ways of establishing new distributions in Romania since 1990, namely: a) During the period 1990–2000, gas distributions contracts were carried out through public tender with financing from the government. After completion the networks were handed over for exploitation to one of the two regional operators of distribution systems of that period (Distrigaz Nord or Distrigaz Sud). b) Starting in the 2000s, the Romanian government have granted distribution systems by concession agreement to authorized companies that would implement those by their own financing. In the first period, when funds were allocated by the government, the number of new distributions was relatively high. Once the transition to the concession model occurred, the development of natural gas supply systems in our country significantly decreased. In this context, the POIM 8.2 program, along with funding from the Anghel Saligny national investment program, promise an increase in activities related to the establishment of new natural gas distribution systems. • POIM 8.2 program comprises the design and execution of “intelligent and sustainable electricity and natural gas transport systems”. Smart gas distribution networks are a significant evolution in this field, combining traditional gas distribution infrastructure with advanced communication and monitoring technologies. These sensor networks, monitoring devices, and data analysis are used to manage and control the flow of gas in the network. They allow suppliers to obtain real-time information about the network, including gas pressure and quality, facilitating rapid intervention, and reducing gas losses. • Benefits of POIM 8.2 program The main advantage of this program is the access to the financial resources offered by the European Union in order to establish new distributions in Romania. This brings great benefits both to the beneficiaries of these projects and the contractors, recalling the period when this type of system was put out for execution by public tender. • Issues arising in the implementation of this program and build-up of new distribution networks The program runs from September 2020 till December 2023, so the biggest problem may be the time to complete it. The actual program started with the first stage in September 2020 when approximately 24 potential investments were submitted for analysis. The result of the evaluation of these potential investments was published only in mid-2021. The signing of the financing contracts followed in order to move on to the set-up of design and execution tenders for the selected works. It was thus necessary to complete the work in the remaining 18 months to avoid losing the funds. The second stage of the program allowed to file the documents in December 2020, with the results (the winning bids for qualified works) published only in February 2022. There are thus investments where the design and execution must be completed in less than a year. Under those conditions, we consider there is little chance the selected investments can be completed by the end of this year, and as a result the allocated funds for this program might not be accessed in full. • Identified issues during first stage, bidding One issue has been the lack of experts to create a proper framework for conducting auctions. In the specifications, one may notice many requirements that have nothing to do with the specifics of the works to be performed, more precisely with natural gas supply systems. These requirements have allowed access to this kind of tender to companies involved in water supply works, although Law 123 clearly stipulates that in the field of natural gas only ANRE authorized companies may function. At the same time, these requirements have allowed access to companies with numerous similar contracts yet having significantly less technological complexity. Another issue consists of feasibility studies drawn up incompletely or filed partially or truncated so that it may be impossible to establish the exact way of realizing the natural gas supply system. A feasibility study should be a ‘project’ without a construction permit. During those procedures, many studies without the necessary certificates requested by urban planning were approved, and those can change to a great extent the way to build a natural gas network. • Issues identified during the execution stage Duration of project stages can be mis-estimated. The authorization process and getting necessary approvals for such a project can be complex and delay its implementation. Regulations and technical standards must be closely followed to ensure the safety and reliability of the distribution system. In most cases, 90 days are suggested for the design project. Good collaboration between the beneficiary and the designer, as well as a proper feasibility study to serve as a starting point for the design are necessary to avoid problems. For example, the minimum period required to obtain an approval for a water course sub-crossing is 45–60 days, while getting a discharge from the INMH requires 30 days, and an approval from CFR 2 to 3 months. Having got those, it is necessary to get the execution authorization, for which another 30–60 days are needed. That may not be obtained without the above-mentioned approvals. Thus, one may have only 90 days to work out an effective solution for implementing the system, while delays are possible because of long waiting times for necessary approvals. A better collaboration between the public and private sectors may be one answer to those issues. Public authorities and the companies that are going to execute the projects need to work together to simplify and speed up the authorization process. Clear and coherent regulations reduce administrative delays and are needed to stimulate these fixed-time investments. The establishment of

Standards affect every area of our lives. The food we eat, cars we drive, clothes we wear, toys children play with, and technology we use all conform to particular standards, often agreed internationally.

In 2008, OMV Petrom entered a joint venture with ExxonMobil for the exploration of the Neptun Block in the deep-water sector of the Black Sea. The block covers an area of approximately 7,500 square kilometres in water depths ranging from 100-1,700 meters. According to OMV Petrom, over 1.5 billion USD were invested between 2008 and 2016 in exploration and appraisal activities in the Neptun Deep block. The exploration included two 3D acquisition campaigns and two exploration drilling campaigns, with eight exploration and appraisal wells drilled, the company website says. In 2012, Domino-1, the first deep-water exploration well in Romania, confirmed the existence of a natural gas reservoir. In January 2016, the second exploration drilling campaign in the Romanian deep-water sector of the Black Sea was successfully completed, with seven wells drilled, the majority of them having found gas. In 2017, extensive engineering activities took place in preparation for the potential final investment decision, the company said. Since then, OMV Petrom’s position is that it continues to evaluate the technical and commercial viability of the project. The energy crisis prompted by the war in Ukraine has led to a reappraisal of the energy transition, with natural gas now included under the EU taxonomy rules. However, in the absence of economic carbon capture solutions, gas is expected to be virtually phased out by 2050. It looks like the final investment decision on the Neptun Deep project could not be delayed any more. Key challenges of the Neptun Deep projectThe Black Sea offshore gas resources offer a huge opportunity for Romania to decrease its energy dependency, to bring additional budget revenues, and to create jobs. There are challenges, mainly of technical nature given Neptun status as practically the first deep-water project in the Romanian Black Sea. There are also external political challenges, with the conflict in Ukraine looking nowhere near its end, and the peril of ongoing instability and tensions in the Ukrainian waters dragging on for years. Key challenges of the Neptun Deep project There were also internal political obstacles that Romania finally managed to overcome in 2022. The significant amendments to the current Offshore Law were passed in May 2022. They show Romania as an attractive country to investors, ready to offer long-awaited predictability and stability to holders of deep offshore and onshore petroleum agreements, regarding the royalty regime and the specific tax regime. Now the Offshore Law encourages the purchase of goods and services from the European area and from countries which have concluded bilateral/ multilateral trade agreements with the European Union. It also offers the possibility to sell freely the hydrocarbons extracted, as a general rule and under normal conditions. At the same time, domestic consumers will be protected under exceptional terms. The changes to law were made in view of a fair sharing of possible windfall gains between the investor and the Romanian state, while allowing the full recovery of the investment in the upstream segment from the value of the additional tax. Speaking in Vienna in April 2022 Alfred Stern, the OMV CEO and Chairman of the Supervisory Board of OMV Petrom, said Neptun Deep was expected to require investments of about €2 billion, and OMV and Romgaz would be able to agree upon the final investment decision on the project within a year. The development is expected to enter into commercial production four years after that. In August 2022, Romanian gas producer Romgaz announced it completed the acquisition of Exxon Mobil’s 50% stake in the Black Sea offshore project Neptun Deep for 1 billion EUR. Another Romanian company, TRANSGAZ, the technical operator of the National Gas Transmission System, plans to invest approximately 350 million EUR in the Tuzla – Podisor gas pipeline. Its total length will amount to 308.32 km, from the Black Sea shore to Podișor, in Giurgiu County, with construction works expected to start after OMV Petrom FID (Final Investment Decision). This significant project will greatly benefit local contractors, suppliers, and constructors. On November 21, 2022, a delegation of OMV Petrom, led by Mr. Stern, paid a rather surprising visit to President Klaus Iohannis in Bucharest. On that occasion the Romanian president requested the OMV management made the final investment decision and started the offshore exploitation within the perimeter as soon as possible, “considering that the Offshore Law in force at this moment is favourable.” The statement could be interpreted in the sense that OMV should expect no more amendments to the Offshore Law or relevant paragraphs of the Romanian Fiscal Code. In its turn, the OMV management presented the status of the project and the key steps taken and promised to adopt the final investment decision in mid-2023, so that the exploitation of natural gas from the Neptun Deep perimeter may start “as soon as possible.” Natural gas reserves in the Black Sea are estimated at more than 200 billion cubic metres, and a Deloitte study shows that exploitation will bring in about $26 billion by 2040 from corporate taxes, royalties, social contributions, and other taxes. In addition, it would generate more than $71 billion to Romania’s GDP and create or maintain more than 30,000 jobs. If that is not enough and now not the moment, then when?! It is high time we said game on for Neptun Deep! arksoccer.netclick over here now