Energy needs $3bn investments in two years

The Romanian energy system needs approximately $3bn investments throughout 2003-2005, with $2.5 billion needed for electrical power production alone, Industry and Resources minister Dan Ioan Popescu said.
Popescu added the investment volume needed until 2015 amounted to about $10bn, $6bn of which required by the energy generating sector alone. These investments are required because of the current state of the Romanian infrastructure, which needs modernisation, in line with Romania’s EU accession plans.
Some of the ways to recover such investments are the public-private partnership, attracting private capital, having the companies issue bonds on the domestic market or contracting banking loans.
“We have recently sent the European Union and the World Bank a draft on the energy sector in Romania, which presents an itemised projection until 2015 of the market model, the place and the role of our market within the regional market, forecasts about consumption prices and energy efficiency,” Popescu yesterday told the “Energia 2003 (Energy 2003)” Conference organised by Business Media Group.
This document is currently examined by the European Union specialists and is to be enacted by the Government and become an important part of the “Energy” chapter of Romania’s negotiations for EU accession.
Dan Ioan Popescu said the natural gas resources were dwindling. The domestic production would become 50% lower over the next ten years, while consumption would increase by about 30%-40%. Under the circumstances, Romania is bound to become more dependent on gas imports. The European natural gas flows from North to South at the moment, with large deposits discovered in the Caspian Sea, the Middle East or North Africa.
The domestic oil production is about six million tonnes a year for the time being, and about half of the demand is covered by imports. Production will indeed go down in ten years, yet not as fast as that of natural gases.
As for the coal production, Romania has significant lignite reserves, which would allow for a 50-year mining if maintaining the current production pace. The price is competitive, amounting to some $7.2/Gcal.
The need for infrastructure investments is also verified by the European Union and World Bank officials in Romania. “2003 is a crucial year. Energy sector reform means progress. Promises are not enough. The private sector is the only one that can provide the necessary financing,” Jonathan Scheele, European Commission delegation in Romania representative said.  “The privatisation is not a condition imposed by others, it is a need imposed by the Romanian economy, ” Ziad Alahdad, World Bank representative in Bucharest said.
Dinu Patriciu, Rompetrol Group chairman cared to break “two myths”: “We are not an oil producing country, as the domestic production covers only half of Romania’s consumption. The second myth that’s been around a while is that Romania has 33 million tonnes a year in refining capacity: the real processing capacity is actually of 12.7 million tonnes a year.”