The voice of the entire
Upstream sector in Romania

Frequently asked questions

The upstream segment of the oil and gas industry is sometimes also called “exploration and production” or E&P, and the upstream companies explore for and produce hydrocarbons.
In Romania, companies generally do this by acquiring leasehold rights to areas where they can drill oil and gas economically. They might evaluate prospects through seismic surveys, core analysis (studying samples of rock), and drilling exploration wells. Once they deem an area economic, they drill further wells, and they sell oil and gas from these wells.
Upstream company revenues are based on the amount of oil and gas the companies produce as well as the prices at which they can sell the oil and gas. The cost component of most upstream companies comprises a few major categories. Firstly, the lease operating expense is broadly the day-to-day cost of producing hydrocarbons — such as labor costs for employees in the field, maintenance costs, and repairs related to oil and gas properties. Plus, the oil and gas companies pay royalties that amounts from 3,5% to 13,5% of revenue, diferentiated on the size of the production from a deposit. Lastly, G&A (general and administrative) expenses include overhead such as the cost of office space, professional fees, and other overhead.
National Agency for Mineral Resources (NAMR) held the most recent round of concessions in 2010, when it proposed for auction 30 blocks, out of which 20 blocks were awarded. Five of the concession are located on the Black Sea continental shelf, and were won by Lukoil Overseas & Vanco International, Melrose Resources & Petromar Resources and Petro Ventures BV. Among the winners of onshore blocks are Moesia Oil & Gas, MOL and Expert Petroleum. Also, Chevron received in concessions three blocks in Dobrogea. NARM expressed intention to hold a new round of concessions in 2014, with more than 30 perimeters available for biding.
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