Azernews.Az

By Bloomberg

Romania will probably auction fewer exploration licenses for oil and gas blocks than initially planned as lower oil prices may keep investors at bay, the head of the country’s Mineral Resources Agency said.

The agency plans to auction between 20 and 32 licenses for exploration of oil and gas blocks across Romania, compared with 36 blocks initially announced, Mineral Resources Agency President Gheorghe Dutu said in an interview in Bucharest on Monday.

“We planned to auction concessions for 36 blocks, but considering the oil price drop and the decline in appetite for investment, it’s pointless to auction a block if you get nothing for it,” Dutu said. “We’re doing an assessment on that now.”

Romania, which last auctioned permits for 20 blocks in 2010, is betting that new exploration in the Black Sea’s deep waters may yield new resources even as falling crude prices hurt oil and gas producers’ profits and hamper investment.

The agency for mineral resources will be technically ready to start the proceedings for the auction in about a month, Dutu said. The entire auction procedure will take between six to nine months and the agency will start once Romania’s parliament approves a law on new taxes for extracting mineral resources, Dutu said.

The Finance Ministry will send the draft law on new royalties for the oil and gas industries to parliament to start debates on the planned changes beginning in September, Deputy Finance Minister Dan Manolescu told an energy conference in Bucharest on Monday. The new law should enter into force in January, he said.