Oil and gas
In line with BMI’s predictions, Romania saw a return to grown in 2013 for the first time since 1994. Along with this oil consumption fell for the fifth year in a row. In the country, at the moment, upgrades are helping to improve efficiencies in the refining sector, though a weak demand market and alleged corruption highlight the ongoing challenges. Also the Romanian government hinted at an increase in oil and gas royalties from the end of last year. No official figures on these changes have been publicised yet, however the National Agency for Mineral Resources has said that the current levels remain insufficient. BMI has also pointed out that shale gas drilling is not a popular prospect in the country. The government is continuing to support it, however organised protests are continuing to stifle efforts.
BMI has said that the Romanian petrochemicals market is set for strong growth as end user markets report strong growth also. However, the company does warn that local producers will struggle to fill demand, particularly with troubled local PVC producer Oltchim operating well below operational capacity. Due to this, BMI has said that the country is going to see rising petrochemicals imports at least over the short term.
The petrochemicals sector is in a strong position, however, growth is now moderating in line with an overall slowdown in export markets. BMI has commented that in the first seven months of last year, chemicals output grew 3% and rubber and plastic grew 8.2%, compared to the industrial average of 8.8%. BMI points out that this follows 11.7% growth in rubber and plastic and 12.5% in chemicals growth in 2013. It has been said that further growth could be expected if Oltchim is brought back into full operations, however, this depends on its successful acquisition by a private investor as well as greater security in competitively priced feedstock supply. So far, the government has failed to sell off the loss making company which filed for insolvency in January 2013.
Edited from report briefs by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/refining/05022015/oil-gas-petchem-bmi-romania/