Romania ranks 11th in the world hierarchy of regional oil producers with proven reserves of 200 million tons of oil
without taking into consideration the oil potential of the Romanian Black Sea plateau area
the main raw material and essential energy resource of world economic development since 1850
let us see the world’s reserves and how much we can count on oil
but also how much time we have to develop alternative resources
three main oil categories must be taken into account: oil in operation
proven oil reserves and oil still undiscovered (Table 1)
Pessimistic forecasts of the depletion of oil reserves are numerous
pertaining to important personalities of the time
a Swedish-born geophysicist and chemist who received the Nobel Prize in Chemistry (1903)
said that world oil resources would be exhausted in 1943
estimated the end of oil reserves in 16 years
the French economist Jean Marie Chevalier predicted the end of the oil era in 2000
the energy experts predicted a decline in oil production in 2010s and in gas in 2020s
based upon the consistent mathematical theory of geophysicist Marion King Hubbert (1956)
According to him the amount of oil extracted from a deposit
region or even whole Earth follows a bell curve that reaches a maximum
after which it starts to go down to depletion
such predictions have not yet been fulfilled
Latest estimates warn that after 2040 there will be a decline in oil extraction
anticipating a higher upstream investment and a volatility of the oil barrel prices that will drive alternative research into renewable
world oil production amounted to 80.58 million barrels per day (bpd) after a peak of 82.50 million bpd extracted at the end of 2016
according to data released by the US Energy Information Administration
Romania is ranked 44th in the world on the list of the 116 oil producing countries
but well ahead of some other countries like Italy
The world’s proven oil reserves are those in already discovered oilfields that have not yet been exploited and are part of the inventory of large private companies such as ExxonMobil
BP or petrostates such as Saudi Arabia and the Gulf States
These reserves amount to 1.7 trillion barrels
but not yet confirmed by drilling oil wells
or – what constitutes the captive oil – spread across many geographical areas more difficult to access or present in deeper depths such as Siberia
Consolidating the proven and undiscovered reserves
Assuming that the current world oil consumption of about 80 million bpd will increase by about 2% per year
the above-mentioned reserves would cover world needs until the 2030s
world reserves are higher than oil reserves
especially after the discoveries of shale deposits and their exploitation in the USA
European Union (EU) yearly natural gas consumption is 465 billion cubic meters from which 35% from Russia (via Gazprom)
35% from Norway and 12% from Libya and Algeria
Romania has a natural gas reserve of about 100 billion cubic meters (bcm) with high methane content (without taking into account explorations in progress on the Romanian Black Sea continental plateau)
a production of 11 bcm/year (Romgaz and OMV Petrom) and a domestic consumption of about 13 bcm/year
an import of 2 bcm/year is required in order to cover the current domestic energy portfolio demand
the 2002 Nabucco Pipeline Project (based on Iraq fields) failed
also called Nabucchino (based on Azerbaijan’s gas fields) was backed by the European Union and aimed at reducing gas imports from Russia supplied by Gazprom
the status of the Nabucco Project became unclear so another opportunity emerged for a new BRUA Project (Bulgaria-Romania-Hungary-Austria) with a total length of 1,318 km from Bulgaria to the Baumgarten terminal connector in Austria
One of the priority energy projects for the EU is the Southern Gas Corridor (SGC)
The strategic importance of this project has been underscored in the European Energy Security and Energy Union Strategies
The SGC is about to offer a new source of competitively priced gas for the European Union market
as well as increasing diversity and security of supply
This is necessary in an environment where the EU’s dependence on gas imports is growing
in particular in Central and South East Europe
a region over-dependent on a single supply of gas
On the occasion of the 4th Ministerial Meeting of the Southern Gas Corridor Advisory Council (February 15th
Baku) Romania has proposed the BRUA project
together with the interconnector between Romania and Bulgaria
the Romanian gas carrier Transgaz and the Slovak natural gas transmission system operator Eustream signed (February 9th) a Memorandum of Understanding (MoU) on the Eastring pipeline project
the parties agreed to cooperate with other TSOs from the Czech Republic
Hungary and Bulgaria to develop this project through the territories of Romania and Slovakia
Eastring is a new pipeline corridor ready for future gas imports to Europe from well-established and also alternative sources – the Black Sea area
It allows additional utilization for existing transit and storage assets in Central and Eastern Europe (Czech Republic
The project is currently considered in more variants
deviating in routing options and level of usage of existing infrastructure
capital mobility and labour migration have been encouraged
as well as the deindustrialisation of regions and even entire countries
as a result of the relocation of factories in more cost-effective areas for energy and labour
Romania has experienced an accelerated and uncontrolled process of deindustrialisation in the last 27 years
by a profound political and systemic crisis
Romanian politicians seem terrified to talk about industrial policy
With reference only to the oil and chemical industry
the industrial dismantling disaster led to the demolition of 102 large units out of the 132 existing in 1990 and to the reduction of the oil processing capacity to 13.7 Mt/year as compared to 35 Mt/year in 1990
Two major oil refineries were shut down: Arpechim Pitesti
closed by the Austrian company OMV Petrom in 2011
One of the largest oil refineries in Romania and Eastern Europe – Rafo Onesti
The buyer will be obliged to keep the refinery running for at least five years
because several plants in Romania have been bought only to be fully dismantled
Three other smaller refineries: Astra-Ploiesti
Steaua Romana-Campina and Darmanesti have been also closed
Quoting the late Professor Constantin Ciutacu PhD
former Secretary of state and Director of the Institute of Economics of the Romanian Academy
“Romania produced before 1989: 14 million tons of steel (today 3 million)
400,000 tons of aluminium (today 200,000 tons)
600 passenger railway cars and 14,000 freight wagons (today 800)
50 million tons of scrap metal have been exported after 2000
the equivalent of about 1,000 oil refineries with a processing capacity of 3.5 million tons per year (using approximately 35,000 tons of equipment according to the IPIP Ploiesti demolition project commissioned by OMV in 2015)”
Romania exported chemicals worth EUR 1.6 billion
which led to a deficit of EUR 4 billion in external payments
former communist countries that have not destroyed their petroleum industry
petrochemical product facilities for polyolefins
The biggest problem that Romania’s foreign trade is currently facing is linked to petrochemistry
a sector contributing to 86% of the trade deficit
due to the massive imports from the riparian Mediterranean Sea countries of basic chemicals like phenol
All these chemicals were produced in Romania before 1990 and Romania exported a large share of them
12,000 employees were working in the chemical industry
the rest had added to the number of unemployed or currently work abroad
in positions rarely equivalent to their background training
in the case of those with higher education: engineers
The largest producer of chemicals in Romania
and one of the most important in Central and Eastern Europe
of which only 1,900 employees were employed in 2016 following insolvency
Romania has given up its industrial policy although the European Union
promotes it through the Europe 2020 Strategy
An industrial policy dedicated to the reindustrialization is absolutely necessary for Romania
our country has abandoned a number of macroeconomic policy levers
trade policy and is preparing to give up currency and monetary policy by entering the Euro area
It must be emphasized that the reindustrialisation that we try to promote in Romania does not mean an excess of production
as it have been wrongfully done after 1945 and before 1989
but the capitalization of production potential based on country’s raw material resources
of the energy available to us and of the imported goods currently marketed on the free market (as is the case with large amounts of oil available on the market)
policies similar to our neighbour countries after 1990
based essentially on the consumption of imported goods that has led to the major economic crisis of the previous years
and the increase in productivity based mainly on staff reduction is not sustainable
Four out of ten able-bodied Romanians do not work in a fiscalized area
which makes the budget unsustainable until some of them find work
Small Romanian businesses cannot survive without integration with the big companies they should serve
especially since the foreign investors active in our country since 1990 prefer to collaborate with the small enterprises in their home country
even if this alternative is more expensive
cannot hire all of the mass of layoffs because banks usually offer only consumer credit loans and not investment loans
while the retail sector mainly sells import goods
it must be emphasized that the Romanian services are complementary to the import industry
The issue of Romania’s reindustrialisation is an urgent one
important not only for the long term economic development
but also for the very existence of the state
despite the fact that the state itself has little leverage because state aid is limited
trade policies come from the EU’s competence
the monetary and the foreign currency policies are restrictive
and the fiscal and budgetary policies must obey IMF constraints
Romania faces a budget deficit and an increase in the public debt that has reached astronomical sums relative to the reimbursement potential
the reduction of unemployment and the increase in labour productivity are contradictory to the objective of reducing the budget deficit
Reduced R&D spending at a level of mere survival led to a lack of innovation
and competition is centred on price and not on product quality and performance
Considering a consolidated reindustrialisation of Romania
one cannot ignore that over 80% of the manufacturing industry is dominated by foreign capital and therefore this should be made a partner of the reindustrialisation strategy
Another drawback of the Romanian economy is the precarious state of the road
areas that have not experienced a significant progress after 1990
Investment targeting these modes of transport are vital for the planned reindustrialisation of Romania
the role of central governments should be limited to predictable and stable fiscal policies
improving the business environment by linking SMEs with large industrial facilities owned over 80% by foreign investors and with Romanian investors that still exist and were able to survive to the unpredictable and ever-changing economic and especially fiscal policies practiced by all post-1990 governments in Romania
the government should develop the transport networks
reduce bureaucracy and improve the legislation on mineral resources
the harmonization of the funding of vocational and university education
with the objective of employing graduates in the fields in which they have been trained
The volume ‘Restructuring and reindustrialisation of the petroleum
published by AGIR Publishing House and the Romanian Academy of Technical Sciences (ASTR) in November 2016
contains suggestions for new industrial developments in organic chemistry
topics summarized in the subsequent paragraphs
The volume deals with 10 main subdomains of the chemical industry
petrochemical and chemical plants that were in operation before 1990
units that were demolished after 1990 and units that survived demolition and which can be restarted and modernized
Tables 2 and 3 depict the situation in the field of petroleum refining
The refineries in Romania have reduced their processing capacity by 58% after the closure of the two large refineries
Arpechim Pitesti and Rafo Onesti and the two smaller refineries
Bulgaria and Slovakia doubled their petroleum and petrochemical processing capacity in integrated systems
Table 4 shows the situation of the demolished
closed and still in operation petrochemical facilities units in Romania after privatization between 1990-2016
Of the 6 integrated petrochemical platforms in 1990 with the above-mentioned petroleum refineries and presented in the chronological order of their construction and start-up: Rafo Onesti-Carom
Petromidia and Timisoara (Solventul) – Pancevo
only one alone fulfils the restart conditions: the complex Arpechim (Pitesti) – Oltchim (Ramnicu Valcea)
The Petromidia (Navodari) refinery is semi-integrated because it imports ethylene from the Mediterranean countries using 5,000 t ships and processes it in the HDPE-LDPE Plant
it can be concentrated in the propylene column in the pyrolysis plant but the unit was stopped since the 1990s
the reindustrialization of the petrochemical sector in Romania means the restarting of the Pitesti Petrochemistry Platform in an integrated system including: the Arpechim Refinery
Romania should buy back the Arpechim Refinery from OMV Petrom
shut down by the Austrian Company since 2011
OMV has explicitly stated in the very Contract of buying Petrom in 2004 that it does not want to keep the Romanian petrochemistry facilities at Brazi
OMV divided the capacities in two categories: basic and eligible
The above assertion was again strengthened as early as 2012 when the OMV CEO at that time
said: “The European petrochemical market has growth potential over the current decade
That’s why we want to improve our good position with our integrated refineries in Schwechat and Burghausen
we focus only on refining oil produced internally.”
OMV did not intend at all to preserve and develop integrated petrochemical and petroleum refineries in Romania and Romanian politicians tell us that this was a condition to enter the European Union
Czechia manage to preserve and not demolish their petrochemical industry?
Putting Oltchim into operation in the integrated system
as it has been operating for more than 50 years
will make it more attractive for privatization
when compared to the Oltchim’s current sale of assets
The closure of the Arpechim petrochemical plant in Pitesti by OMV Petrom in 2008 has led to the demolition of the all installation producing acrylonitrile
Only 4 installations have survived: Pyrolysis 2
purchased by the Romanian State through Oltchim and forming the current Petrochemical Direction Bradu (subsequently PDB)
polyamide and polyacrylic fibres is unlikely to be restarted in the medium term due to the demolition of their basic raw material manufacturing units by OMV Petrom on the Petrobrazi platform (phenol and dimethyl terephthalate) and Arpechim Pitesti (acrylonitrile)
Any attempt to revive the textile industry in Romania implies the restarting of the petrochemical units that have survived the irrational demolitions of previous years and their development with modern technologies
it is only possible to invest in the recycling of polyester waste (PET) waste by increasing its collection
The organic chemistry sector was totally dismantled in Romania after 1990
Arpechim and Petrobrazi Chemical platforms
so that the Romanian State should offer attractive conditions for domestic and foreign investors interested in the construction of greenfield state-of-the-art units and capacities
to cover Romania’s domestic consumption and generate availability for export
The chemical fertilizer industry only counts through the Azomures plant in Targu Mures
after 10 units of the Interagro Group have been deliberately become bankrupted and closed to make way for the import of fertilizers from the neighbouring countries
in association with the current owner and restart them with the methane gas at their disposal
instead of burning the gas at OMV Petrom Brazi Co-generation Power Plant
commissioned on the basis of Government Decision no
facility that exports Romanian produced power to Austria and Germany
where OMV developed the petrochemistry after destroying it in Romania
investment in a modern chemical fertilizer production by Romgaz can be considered in a public-private partnership system in Dobrogea
significant natural gas deposits in the Romanian Black Sea plateau
Romania lost all its advance it had in Central and Eastern Europe before 1990
because of the privatization of Carom in 2003
bankrupted in 2005 and subsequently by Energy Biochemicals in 2008
The Carom demolition led to the disappearance of the Romanian production of SBR (styrene butadiene rubber)
leaving active only the poor man’s solution: recycling of waste for the recovery of monomers
In the field of construction materials (silicates and oxides)
only units for the production of concrete and plaster prefabricates can be considered
since the cement and derivatives sector is owned in a proportion of more than 90% by foreign companies which transfer the generated profit to their countries of origin
there is a tendency for some companies in the US
and other countries to generate chemical products by chemical conversion of coal using less polluting
more selective Fischer-Tropsch technologies
although there are significant reserves of bituminous coal and lignite
there are no attempts to chemically valuing them
their only use being burning in thermal power stations for the production of thermal and electric energy
despite the fact that the Ministry of Economy ordered a study in 2014 for the valuing of the coal in Oltenia and the Jiu Valley by industrial processes of gasification and production of fertilizers
The indigenous production of catalysts for chemistry was completely stopped after 1989 (Vega Ploiesti
following the same pattern of the entire chemical industry itself
the research and development in a top field
where Romania also had notable experience and achievements also stopped
academic and financial measures to reinvigorate the research and production of catalysts
European researches are concentrated especially in the field of waste use as a source of raw materials for chemical industry
No remarkable research can be mentioned in this field in Romania
The field of R&D and education in chemistry has experienced a marked decline in Romania since 1990
because of the lack of financing even at the level of the basic necessities of science and technology progress in our country
Due to the demolition of the industrial base
there are no real possibilities for educating
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