Petrom warns: Royalties increase will halve production period

Petrom, the company that manages Romania's entire crude oil reserves, says that if royalties are preserved at the level agreed on with the Romanian state until 2014 then production will extend beyond 2040. If not, the period could be shortened, because investments in the exploration and production segment are huge, which makes it necessary to keep royalties at the same level. The company believes the extraction of the petroleum left in the ground will entail investments worth billions of euros. "If royalties are maintained at the same level for the duration specified in the privatisation contract, we will be able to invest in order to extend the reserves beyond 2040. The company's detailed evaluation after privatisation revealed that the amount of investments needed is much larger than originally expected. Pet rom has fulfilled its obligations undertaken in the privatisation contract, and we are expecting the Romanian state to act just as responsibly," says Johann Pleininger, a member of Petrom's executive board, in charge of exploration and production.