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Romania Oil and Gas
With the largest petroleum reserves in Eastern Europe,
Romania
was a major oil producer and exporter throughout much of
the
twentieth century. The oil extraction industry, developed
primarily
by German, United States, British, and Dutch companies,
was the
forerunner of the country's belated industrialization. In
1950 oil
satisfied nearly half of total energy needs. Peak
production was
reached in 1976, gradually declining in subsequent years,
as many
of the country's 200 oil fields began nearing depletion
and
discovery of new reserves waned. Increasingly large
quantities of
crude had to be imported, and in 1979 imports surpassed
domestic
production for the first time. Despite an accelerated
exploration
program, with average drilling depths increasing to 8,000
to 10,000
meters, oil output declined from 308 barrels per day in
1976 to 227
in 1986.
Beginning in the late 1970s, Romania became one of only
ten
countries producing offshore oil-drilling rigs. In 1988
seven such
platforms were operating in the Black Sea under the
supervision of
the Constanta-based Petromar enterprise to develop
hydrocarbon
reserves in the continental shelf.
During the 1970s, Romania invested heavily in
developing an
outsized oil-refining industry just as domestic petroleum
production was beginning to decline and the world market
price for
crude was skyrocketing. Some observers estimated that by
1980 the
country was losing as much as US$900,000 per day by
exporting oil
products derived from imported crude. But because these
products
found a ready market in the West--they accounted for 40
percent of
exports to the West in the late 1980s--Romania continued
largescale processing of imported crude to earn hard currency.
By 1988
domestic crude output had fallen to 9.4 million tons,
while
refining capacity stood at some 30 to 33 million tons
annually. To
keep the refineries running, ever larger volumes of crude
had to be
imported--first from members of the Organization of
Petroleum
Exporting Countries (OPEC), but after the outbreak of the
Iran-Iraq
War, from the Soviet Union. Soviet crude deliveries
reached about
6 million tons in 1986. Under the terms of a barter
arrangement,
Romania was to receive at least 5 million tons of Soviet
crude
annually during the 1986-90 period in exchange for
oil-drilling
equipment and food products.
The natural gas industry was unable to offset depletion
of
known reserves, and output declined from 1,216 billion
cubic feet
in 1976 to 940 billion cubic feet in 1986. Some Western
experts
believed that Romanian reserves could be exhausted as
early as
1990. After it had begun importing gas from the Soviet
Union in the
mid-1970s, Romania obtained incrementally larger
shipments; in
1986 it imported 2.5 billion cubic meters of Soviet gas.
For its
participation in projects to develop Soviet gas resources,
Romania
was expected to receive shipments of at least 6 billion
cubic
meters annually after 1989. In addition, as payment for
transit
rights for a 200-kilometer gas pipeline across Dobruja to
Bulgaria,
Romania would be receiving an unspecified amount of Soviet
gas for
a twenty-five-year period.
Data as of July 1989
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