The report covers the period since August 1 to December 15 – including time series up to full-Q3, 2014. It also includes the detailed energy balances for the year 2013 [released in the fall of 2014]. At the end of the report, you can check the content of the previous similar report – issued on July 30.

LONG-TERM INDUSTRY SCENARIO. Romania’s energy sector is built on relatively abundant primary resources – moderate crude oil reserves, significant natural gas reserves [nearly self-sufficiency and offshore potential], abundant coal deposits and significant wind power potential. Resources are depleting, but the energy-intensive industries are also shrinking as the energy becomes more expensive. There exist a functioning power market and the potential for export of power is robust – yet not supported by sufficient transfer capacities. There exist on the other hand robust potential for the development of such connections [for power and gas] – supported and actually required by the EU directives. The government as well as other policy-makers lack any firm strategy for the sector. In the absence of such internal drive, country’s policies fully rely on the EU directives – meaning adequate but slow response to challenges and acceptance of rather global [than local] optimisation. Excessive green energy support created investment euphoria – but part if the support was already reversed prompting protests from investors.

ONGOING STORIES – OIL AND GAS. Low crude oil prices impact on local oil industry. OMV Petrom and other investors will reportedly review its investment plans, but the main project – offshore gas expected to flow from Black Sea around 2019-2020 is unlikely to see major adjustments. Government maintained the tax and royalties system and delayed major reforms in this regard for 2016. The liberalisation of the natural gas market has delayed for the residential sector. The natural gas market is not functional and the suppliers complain about government’s decision that producers [as of July 2014] and suppliers [as of January 2015] have to sell at least 20% of the gas on the free market – versus bilateral negotiations as of now. The interconnections with Moldova and Bulgaria are being developed. Alternative scenarios to failed South Stream, following the failed Nabucco, are considered in the region. Romania considers AGRI LNG project and a north-south pipeline to supply Romania from TAP (Trans Adriatic Pipeline).

Key Points:
• Romania confirms 3.2% y/y GDP growth in Q3, expects 2-5% growth rates in coming years
• EC admits Romania can delay gas price liberalisation for residential users
• Use of primary energy resources up 2.3% y/y in Q3 as more oil refined
• Net use of primary energy resources contracted by 4% y/y to 12.8mn toe in the H1 2014 …
• … - while the gross intake of raw energy resources increased by 3.4% y/y to 15.4mn toe.
• Sharp expansion in the exports of electricity and petroleum products.
• Crude oil indigenous production flat on year in 12m ending Aug-14, at 4.10mn tonnes
• Exports of petroleum products up 36% y/y to 4.44mn tonnes in 12M ending Aug-14
• Diesel sales, of 4.8mn tonnes exceed the pre-crisis peak level of 4.6mn tonnes in 2008
• Romania’s diesel exports soared by 138% y/y to 1.55mn tonnes
• GSP oil services firm plans to invest USD 1.2bn in offshore oil rigs, ships
• Lukoil, OMV Petrom and ExxonMobil start new explorations in Romania's offshore
• Profit per share of OMV Petrom down 71% y/y in Q2, drops 42% y/y in H1 2014
• Domestic consumption of gas edged down by only 2% y/y in the 12M ending July 2014
• Use of gas in chemical industry plunged by 21% y/y
• Romania's Romgaz, partners to decide on €4.5bn AGRI LNG project in January
• Contract for Romanian natural gas delivery to Moldova to be signed by end-2014