Romanian Offshore Gas Field Starts Up Despite War Risk

Despite war risk and lack of insurance, energy company Black Sea Oil & Gas SA has started up production at a new gas field off the coast of Romania, the firm's CEO told multiple news outlets on Tuesday. 

BSOG's Midia project has been a long time coming. It draws on two fields discovered in 1995 and 2007, and it achieved FID in 2018. It incorporates one unmanned production platform and five subsea wells at a position about 65 nm offshore.

The site is in relatively close proximity to the Ukrainian border and the hotly-contested outpost on Snake Island. Russian forces seized the strategic site in the opening days of the war, and Ukrainian forces have repeatedly attacked Russian positions and the supply vessels that travel to and from.

“We’re not in a war zone in Romania, but this clearly has an impact . . . We’ve had mines detected close to our platform, we have warships close and airplanes circling our platform," Black Sea Oil & Gas CEO Mark Beacom told Reuters and Bloomberg. "You can’t get insurance after the war started. We’re taking that risk."

Romania has recently changed its offshore oil and gas laws to encourage more investment, eliminating existing requirements for a 40 perecnt domestic-supply set-aside and a high offshore production tax rate - until recently the highest in Europe. The nation has total estimated offshore gas reserves of about 200 bcm, and these resources are badly needed now that the European market is struggling to decouple from Russian energy suppliers. The next big project in planning, OMV's Neptun Deep, is up for final investment decision next year.

On the other side of the Black Sea, Turkey is pushing rapidly towards the development of the Sakarya gas field, a large 540 bcm discovery that should be online before the end of 2023. The find will help Turkey reduce its longstanding dependence on imported Russian gas.