Energy Industry Review - July/August 2019 by Energy Industry Review

COMMENT

Affordable Decarbonisation T

Lavinia Iancu CEO and Publisher

he World Energy Council has launched an exclusive Innovation Insights Brief - Energy Infrastructure: Affordability Enabler or Decarbonisation Constraint? The brief contains key insights from interviews with global leaders across the energy sector. Transitioning to a decarbonised energy system will result in stranded infrastructure assets or lead to their early decommissioning. Existing energy infrastructure has been built over many decades to support conventional energy uses including coal, nuclear power, oil and natural gas. The rapid transition to a decarbonised energy system implies that some existing infrastructure will be either stranded or decommissioned early, therefore creating a need to assess and minimise the cost as well as mitigating the risk of cascading impacts. Consequently, the way we manage existing infrastructure will both affect and be affected by the chosen transition paths to decarbonisation. These choices determine the speed of decarbonisation and the affordability of the whole transition system. Existing infrastructure can play a big role, but there is a lack of coordinated vision of how infrastructure would fit into the broader energy transition agenda, warns the World Energy Council. The study found that one of the obstacles to a successful energy transition is how governments and the industry will deal with asset decommissioning, stranded assets and repurposing of assets. There are some key findings and recommendations based on this analysis we should take into consideration. • A successful energy transition depends on infrastructure that is adaptable, reliable and affordable. We need to find better ways to utilise existing energy assets as we transition to a decarbonised system. • Use of existing infrastructure is a resource for more affordable transition to decarbonisation. 3

Realising this opportunity must be a priority that requires consideration of infrastructure repurposing opportunities where these make sense. • The magnitude of stranded assets is unknown to the market. There is a potential risk that decarbonisation could become cost-prohibitive if large portions of existing infrastructure are stranded. • Businesses should reframe market strategies to explore the opportunities of reusing existing infrastructure to support transition to a lowcarbon future. Existing energy infrastructure and its potential repurposing opportunities should be part of today’s long-term planning and strategic dialogue. Existing energy infrastructure has been built around conventional resources over many decades with trillions of dollars in investment. It will be a missed opportunity to not plan for the role of existing infrastructure in future energy systems. National governments and wider energy stakeholders should co-develop an energy infrastructure action plan. Energy leaders from around the world including national and regional policymakers have a critical role to play in driving forward the development of a coordinated Action Plan to better realise opportunities for aligning decarbonisation of energy supply with existing infrastructure that may need to be appropriately dealt with. In Europe, besides national governments, European policymakers will have a key role in the energy infrastructure plan to ensure coherence for all countries. What are the next steps that should be taken and which investment plan is best to keep Romania clean? This is an issue, amongst others, to be addressed in order to ensure a safe and sustainable future. *Used by permission of the World Energy Council

Content 3

Affordable Decarbonisation OPINION

The World Energy Council has launched an exclusive Innovation Insights Brief, that contains key insights from interviews with global leaders across the energy sector.

Osaka G20 (G19 + 1)

OPINION

INTERVIEW

Main themes discussed: major challenges faced by the world economy, the world trade issue, the imminent digital transformation, overview of climate and energy, the inequalities existing in our world.

Relaunch of Romanian Exports

Premiere in the Black Sea: Gloria Production Rig Decommissioning

OPINION Actions needed: consolidating exports on traditional markets, counteracting trade deficit, identifying new extra-Community target markets, diversifying exports and attracting foreign investments.

Constantin Gheorghe - President of ACROPO, discusses about Authorityâ&#x20AC;&#x2122;s role and importance, the evolution of Black Sea operations, from the perspective of their safety and improvement of environmental quality in the Black Sea area under Romaniaâ&#x20AC;&#x2122;s jurisdiction.

New Drilling Campaign in the Black Sea

OIL & GAS

Euro Gas Systems to Continue the Expansion

OIL & GAS Totalling an approximate 6,600 sqm of assembly floor and offices, heavy lifting capacity, top quality production equipment, etc. EGS is quickly becoming one of the most important players in the region.

Training the Future Oil and Gas Specialists

OIL & GAS

OMV Petrom started new offshore drilling campaign in the shallow waters of the Istria block in the Black Sea. Two new wells will be drilled by the end of the year, requiring investments of over EUR 30 mln.

At a time when the lack of workforce is a major issue for employers in Romania, legislating the dual education could be a starting point for filling this gap.

A Future-oriented Industrial Policy

POWER President and CEO of Siemens AG Joe Kaeser calls for 5 actions to make Europe stronger.

5,000 Miners from Jiu Valley Turned into ‘Wind Navigators’

RENEWABLES New project: 5,000 miners will be trained to become employees in wind energy production and electricity distribution.

Odfjell Well Services Opens New Repair Shop in Ploiesti

Fire from Ice: A Case Study of Methane Hydrates in the Eastern Mediterranean

OIL & GAS

ANALYSIS

The company announced the expansion of their facilities by opening of a new repair shop, and the acquisition of brand-new CNC machines (Hankook Protec 9N) and other machineries ready to add value to their services.

ROPEPCA’s Perspective on the Oil and Gas Market in Romania

OIL & GAS Saniya Melnicenco, ROPEPCA President, talks about the situation of the oil and gas market in Romania, harmonization of stakeholders’ interests - benefits for the economy, investors, population.

Premiere in Romania: Hydrogen Bus in Bucharest

ENVIRONMENT Since the fuel cell only generates water emissions, this kind of buses do not pollute the atmosphere. Such passenger vehicles are already used in several major cities in Europe such as London, Amsterdam, Hamburg, Cologne, Frankfurt, Rotterdam or Milan.

It is estimated that the total amount of carbon in the form of methane hydrates could be almost double the carbon content in all the fossil fuel reserves put together.

Synergies at IT & Engineering – Inclusive Teaching & Learning

EVENT In April this year representatives of the Energy and Utilities Sector, the IT Sector and the Academic World met for a round-table discussion at the occasion of the Crystal System Group Ltd. course opening ‘IT for All’.

EUR 50MN INVESTMENT FOR GAS TREATMENT PLANT IN SOUTH-EAST ROMANIA

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Publisher: Lavinia Iancu Business Development Manager: Marius Vladareanu Scientific Board: President: Prof. Niculae Napoleon Antonescu PhD Members: Prof. Lazar Avram PhD; Assoc. Prof. Marius Stan; Prof. Ionut Purica PhD; Alexandru Patruti PhD

MV Petrom invested around 200 million euro between 2010-2019 for development of a centralized gas treatment hub serving domestic gas production in the South-East of Romania. The latest stage of this project consisted in an investment of 50 million euro starting 2017, for a new efficient gas treatment process. Currently, the unit is tested and is expected to become fully operational in July. “The Hurezani gas hub serves four of the most important gas producing fields in OMV Petrom’s portfolio, located in Gorj county and includes the largest gas treatment facility in the country. This investment allows Romania to benefit from reliable gas supply now and in the future,” said Peter Zeilinger, member of OMV Petrom Executive Board responsible for Upstream. The approximately 50-million-euro investment covered the construction of a gas treatment facility with a maximum capacity of 6 million standard cubic meters of natural gas per day, which ensures separation of natural gas from condensate, based on a low temperature separation process. Also, pipeline infrastructure of over 12 kilometers was built as part of same investment to ensure

connection to both production sites and national transport systems for gas and condensate. In 2018, production from the fields connected to the Hurezani centralized gas treatment hub amounted to 1.5 billion standard cubic meters, which is equivalent to the energy for heating 1.4 million homes. Approximately 200 million euro were invested for developing the Hurezani centralized gas treatment hub, in three stages. This included 135 million euro for the gas compression unit commissioned in 2010, around 13 million euro for the dehydration unit commissioned in 2015 – which removes water from natural gas, and approximately 50 million euro for the latest project – CHD Hurezani (Centralized Hydrocarbon Dewpoint Hurezani). The latest phase, which includes gas treatment units and pipeline infrastructure, completes the overall gas compression and treatment chain. The new gas treatment facility reflects latest industry standards in terms of technology. The project increases energy efficiency and contributes significantly to the reduction of greenhouse gas emission, while ensuring safe operations for the infrastructure on the long-term future. 7

Journalists: Adrian Stoica, Daniel Lazar, Evgenios Zogopoulos, Dumitru Chisalita Digital Manager: Justin Iancu

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HEADLINES

NEW MARKET FOR MEDIUM AND LONG-TERM STANDARDIZED PRODUCTS

RM believes that the gas market in Romania deserves a special support in its development process, in conditions in which Romania has the largest gas market in Central Europe and was the first country that used, historically, natural gas for industrial purposes. Thus, in order to meet the needs of gas market participants and for the sustainable development of this market in general, BRM launches from July 2019 the Central Counterparty service for futures transactions for one week and for one month. From September, contracts with longer maturities will also be included in the clearing-settlement system. By the end of the year, an additional clearing fund will be established, dedicated to the application. The Central Counterparty has a significant role in the process of managing risks caused by the settlement

of futures transactions, representing a necessary stage in the process of development of markets with standard contracts managed by BRM and of alignment with EU requirements. In order to achieve the role of Central Counterparty, the subjective novation applies under which the Central Counterparty becomes buyer for any seller and seller for any buyer, so that each participant in transactions is ensured of completion of the commercial operation, according to prices and quantities agreed under the transaction. Risks of potential failure of settlement of a participant are taken over entirely by the Central Counterparty, being basically isolated in terms of systemic risk, and the remaining participants not being affected by the incident potentially caused by the individual participant. From an operational and technical point of view, the main mechanism of for

managing the price risk resulting from exposure of a transaction to the passage of time, irrespective of the maturity of the contracts concluded, is management - by the Clearing House - of security accounts, by activating a complex margin system: initial, variation and delivery, in line with the international practice. In addition, the method of marking to the daily market of participants’ portfolios, based on transparent prices, with a certain impact on the guarantees necessary to maintain the positions open, creates the prerequisites of increasing market liquidity and the relevance of the price discovery process, basic features of a functional market. Standard products, which will benefit from Counterparty services on the platform dedicated to this market by BRM, based on a special regulation, are all futures products with delivery period: week, month, quarter, calendar semester, gas season, calendar year and gas year.

FIRST AXENS POLYFUEL UNIT STARTED-UP AT PETROBRAZI REFINERY

fter four years of teamwork for project development and execution, the new PolyFuel® unit at Petrobrazi refinery was started-up and is fully functional since April 2019. Based on the PolyFuel® technology licensed by Axens, the OMV Petrom’s project at Petrobrazi refinery enables to increase the FCC products value by upgrading LPG and Light Cracked Naphtha into high quality fuels. In June 2019, the unit test-run was

successfully completed, demonstrating that the unit performances are well in line with the expectations. “The PolyFuel® unit of Petrobrazi refinery is the first of its kind valorizing C4 and C5/C6 fractions into high quality gasoline and middle distillates, increasing the overall production of these products,” said Bruno Domergue, Axens Clean Fuels, Bio, Olefins and Gas business line Director. “The new Polyfuel unit brings the state-of-the-art technologies used in 8

the petrochemical and refining industry to the Petrobrazi refinery. Due to sustained investments, Petrobrazi continues to rank among the most important refineries in Romania, operating at the highest standards – energy efficiency and environmental standards included – and contributing to the economic development of the area,” mentioned Radu Caprau, member of OMV Petrom Executive Board, responsible for Downstream Oil.

HEADLINES

LUKOIL PRODUCES OVER 15 MLN TONS OF OIL AT VLADIMIR FILANOVSKY FIELD

ukoil’s cumulative output at Vladimir Filanovsky field has exceeded 15 million metric tons. Full-scale commercial operation of the project started in the fall of 2016, i.e. eleven years after the field’s discovery. Currently, the third-stage of infrastructure development is under way. Lukoil has mounted the wellhead platform topside (mini-platform) on the bearing units in the Caspian Sea. The total weight of the structure exceeds 2.8

thousand metric tons. A self-elevating floating drill rig will drill wells from the wellhead platform. The produced oil will go to the central processing platform of the first field-development stage through a subsea pipeline. Filanovsky field’s third development stage aims at bringing its western part into development and at maintaining production at the target level of six million metric tons. Oil production at the wellhead platform is to begin this year. The facility will be minimally

manned and almost fully automated. Vladimir Filanovsky field, the largest oil field in the Russian sector of the Caspian Sea, had initial recoverable reserves of 129 million metric tons of oil and 30 billion cubic meters of gas. Commissioned in 2016, the field reached its target production level of six million tons of oil per year in 2018. The field produces on the ‘zero discharge’ principle: all processing and domestic waste goes to the shore to be disposed of there.

Steder Group in Romania is Your link to the world of Energy sector in the Black Sea Region for Transport, Logistics & Storage

HEADLINES

OMV PETROM’S PROFIT UP 53% IN H1

MV Petrom has published, on the last day of July, the financial and operational results for the second quarter of this year. The value of consolidated sales increased in the second quarter of this year by 19% compared to Q2/18, to RON 11.32bn, supported by higher volumes and prices of petroleum products and higher gas prices, which offset the lower volumes of gas and electricity sales. The Clean CCS Operating Result increased by 31%, to RON 2.22 billion, due to an increase in sales, while the net profit stood at RON 1.98 billion, by 53% higher than in the similar period of last year. Company’s investments totalled RON 1.7 billion and contribution to Romania’s state budget, during January - June 2019, was RON 6 billion. Referring to investment projects during January - June 2019, in Upstream, an investment project of approximately EUR 50 million was completed, for

an additional gas treatment station in Hurezani - the most important gas treatment unit in the country. The initiative was part of a multiyear investment program of EUR 200 million that targeted the development in Hurezani of a gas hub serving gas production in south-eastern Romania. The company has also started a new drilling campaign in the shallow waters of the Black Sea. In Downstream Oil, three important projects have been completed, with investments of around EUR 130 million in the recent years: the Polyfuel unit, modernization of the Coker unit at Petrobrazi and upgrade of the fuel terminal in Arad. OMV Petrom has also received Competition Council’s approval and continues negotiations with Auchan to extend the partnership in stores within Petrom stations. With a Clean Operating Result of RON 1.60 billion, by 9% higher y/y, the Upstream segment had a contribution of

over two thirds in the Clean Operating Result of OMV Petrom. Romania’s daily production fell by 5%, mainly due to natural decline, in conditions of decrease by 8% in gas production, the production cost being USD 11.4/boe, down 3%, mainly due to a favourable evolution of the exchange rate. In Downstream Oil, the OMV Petrom indicator refining margin decreased by 44%, to USD 3.74/bbl, being influenced by the evolution of international prices for crude oil and petroleum products, and the volume of retail sales of the Group increased by 4%, due to a higher demand in Romania and in the region. In Downstream Gas, gas sales to third parties fell by 13% due to a decrease in own gas production and increase in volumes injected in the underground storage facilities, while net electricity production fell by 14%, to 1.13 TWh, due to planned closure of Brazi power plant and market conditions (negative margins).

ROMANIA TO REMOVE BARRIERS TO EXPORTS OF NATURAL GAS

he European Commission (EC) decided on July 25 to send an additional reasoned opinion to Romania for failing to eliminate restrictions on trade in natural gas between Member States as required under EU rules for the internal market in natural gas (Articles 35 and 36 of the Treaty on the Functioning of the European Union, TFEU; Directive 2009/73/EC). In July 2014, the Commission sent

a reasoned opinion to the Romanian authorities as their national legislation creates barriers to the free movement of goods within the EU single market. After assessing the recent amendments to the Energy Law adopted by Romania, the Commission found that an obligation to sell natural gas with priority on the Romanian market is maintained and, consequently, this violates EU law. By putting an obligation on the producers in Romania to give priority 10

to sales on the domestic market, the Commission considers that the current Romanian legal framework creates unjustified barriers to exports of gas from Romania and has, therefore, requested that the barriers be lifted. Romania now has two months to respond to the arguments put forward by the Commission. Otherwise, the Commission may decide to bring the matter before the Court of Justice of the EU.

HEADLINES

ROMANIA GETS INVOLVED IN THE DEVELOPMENT OF THE SGC

he Government approved on July 17 a Memorandum of Understanding between the Ministry of Energy, Transgaz and the Advisory Council of the Southern Gas Corridor, on the potential of cooperation in using the gas transmission infrastructure provided by Romania-Bulgaria Interconnector and Bulgaria-Romania-Hungary-Austria (BRUA) pipeline in the future stages of expansion of the Southern Gas Corridor in the Balkans and Central Europe. The interconnector between Romania

and Bulgaria, as well as BRUA project, will ensure the possibility of integration of natural gas sources from the Caspian and Mediterranean basins, Middle East or Central Asia with the markets in Central and Eastern Europe. Upon completion, BRUA will have a transmission capacity to Hungary of 4.4bcm per year and 1.5bcm per year to Bulgaria. At Romania’s last participation in the Meeting of the Southern Gas Corridor Advisory Council, in February 2019, Romania expressed its interest to become

involved in the development of the Southern Corridor project by adding new infrastructure elements to develop energy interconnectivity. “This Memorandum is a central element of Romania’s intentions to be active in the regional and European energy context. This initiative opens, on the one hand, the access of our country and Europe to Caspian gas resources and, on the other hand, includes BRUA in a transmission system linking Central Asia to the heart of Europe,” Romania’s Energy Minister Anton Anton said.

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HEADLINES

GREENING OF THE HISTORICAL SETTLING LAGOONS FROM VEGA REFINERY

ompetrol Rafinare announ ces the continuation of the program for remediation and greening of the historical lagoons of Vega Ploiesti Refinery and the transition to the most important stage - the neutralization and effective disposal of acid tar and oil residues. The deadline for completion is forecasted for 2022, the investment effort amounting to several tens of millions USD. “It is an important project for Rompetrol Rafinare and its majority shareholder KMG International and demonstrates our commitment to continuously reducing the impact of our activities and operations on the environment and on the health of local communities, as well as efforts to align with the most demanding provisions

of national and EU legislation in the field. The achievement of this comprehensive program implies not only the allotment of extraordinary financial resources, but also the adoption of the best available technologies, the most rigorous safety measures and permanent cooperation with all those involved,” states Yedil Utekov, General Manager of Rompetrol Rafinare. The lagoons reflect the evolution of the refining industry over 160 years, acid tars and petroleum residues being produced and stored overwhelmingly in the period before the privatization of Vega Ploiesti Refinery (1905-1999). At the time of the privatization - 1999, the amount of waste that the future shareholder was to take over for greening

was estimated at approx. 62,000 tons, afterwards being notified that the existing volume in lagoons is at least 4 times bigger. Up to now, over 80,000 tons have been removed, with associated costs rising to about USD 17.4 million. The actual stage of the project implies two main trends: treating tars and transforming them into solid waste that will be stored on site without endangering health and environment, as well as recovery through co-incineration in authorized plants (cement factories). These tars have different physicochemical properties and characteristics, such as acidity or density, the differences being generated by the crude oil processing methods used in the past, as well as the refined products obtained.

OFFSHORE AND MARINE OWNERS’ NEW DEAL TO GO GREEN

n innovative finance deal that will allow offshore and marine asset owners to reduce their fuel consumption, costs and emissions has been launched. Blueday Technology, which designs and installs integrated energy systems for energy, marine and maritime customers, has teamed up with sustainable energy infrastructure fund manager SUSI Partners to offer a new financing structure for asset owners. Fifty million euro is now available for Blueday Technology clients to install integrated energy systems. The scheme removes the biggest obstacle standing in the way of asset owners installing hybrid energy systems: the need for a significant,

upfront capital investment. Asset owners and operators in the oil and gas, drilling rig, maritime, aquaculture and shore power sectors could all benefit from the new deal. “The offshore and marine industries are facing financial pressures at a time when their emissions and carbon footprints are coming under scrutiny. This is a fantastic opportunity for owners and operators to reduce operating expenditure and emissions while future-proofing their assets. Blueday Technology is at the forefront of hybrid technology. Our SMART hybrid solutions keep assets running at peak efficiency and customers report a return on investment within two years. We know that cash pressure is 12

one of the main barriers to installing our systems and future-proofing assets – we’ve now solved that problem for owners and operators through our agreement with SUSI Partners,” Hans-Petter Heggebø, CEO of Blueday Technology, said. Under the new arrangement, asset owners and operators who want to install hybrid energy systems will face no upfront costs; instead, they will pay a monthly fee. Gustavo Coito, Director in SUSI Partners’ investment team, added: “We are delighted to partner up with Blueday to deliver a combined solution to asset owners and operators, allowing for economic and environmental benefits while removing the key hurdle faced with when deciding to go electric.”

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HEADLINES

GFR EXTENDS THE STE SERVICE TO ALL MAJOR OIL PRODUCTS PLAYERS

rup Feroviar Roman (GFR) announced the issuance of the first electronic consignment notes for the OMV Petrom railway transports, thus extending this service to all major players in the Oil Products industry. GFR is the only Romanian company and one of the few operators in SouthEastern Europe to have implemented this service, as part of an extensive digitalization project. So far, the Electronic Consignment Note (STE) solution has replaced about 70% of local traffic transport contracts in paper format, with visible benefits in terms of efficiency, transparency and environmental impact. “The STE application is an online editing, management and tracking tool of transports we do for our partners and customers,” Amedeo Neculcea, deputy

general manager of the Grup Feroviar Roman and coordinator of this project, said. “The E-CLIENT GFR platform that STE is part of provides efficient, real-time communication between GFR and its customers regarding the status of empty wagons availability, shipments, any wagons in our fleet and, soon, the GFR-issued invoices. At the same time, it provides flexible management of documents governing the operational business relationship (consignment notes, subsequent orders, circumstances preventing carriage, takeover–handover lists, etc.) and the issuing of various reports. It is undoubtedly a valuable system that greatly simplifies the efforts made to manage contractual relations. We are pleased that our OMV Petrom partners validated the results we have achieved so far, making the decision to replace

the old system with this performing solution.” GFR manages more than 7,000 transports each month and issues the same number of consignment notes, of which over 2,800 locally. Of the total monthly consignment notes, 40% are local notes generated by the GFR, 16% are international consignment notes generated by the GFR, and 44% are international consignment notes generated by other operators. In the traditional version, the issuing of consignment notes involves substantial resources (12 pages printed for each shipment, manual filling of forms printed on atypical printers, which require higher costs than normal printers). Transferring these operations into a computer system greatly reduces the environmental impact, but also the risk of human errors and delays.

ROMANIA-POLAND ENERGY MEETING

orks of the first meeting of the Romanian-Polish joint energy working group were organized on July 22 at Conpet’s headquarters. The Romanian delegation was led by Doru Visan, Secretary of State within the Ministry of Energy, and the Polish delegation - by Tomasz Dabrowski, Undersecretary of State within Poland’s Ministry of Energy, together with experts from the Polish Ministry of Energy and representatives of PERN S.A. and of the Embassy of the Republic of Poland in

Bucharest. Works of the Romanian-Polish working group were opened by Doru Visan, Elena Popescu - Director General of the General Directorate for Energy Policies - and Cornel Zeveleanu Deputy Director General of the General Directorate for Crude Oil and Natural Gas within the Ministry of Energy. The Romanian delegation also included experts within the Ministry of Energy, representatives of NAMR and of some of the most important energy companies in Romania: Transgaz, Romgaz, Oltenia 14

Energy Complex and Hidroelectrica. Both Romania and Poland have a strategic role in the region, promoting the principle of regional cooperation, in order to increase stability in the region, integrate national markets in the European energy market and diversify supply sources and routes. Given the convergent positions of the two countries on the main issues of the regional energy landscape, this first Working Group meeting has provided the necessary framework for identifying opportunities for cooperation in the energy sector.

HEADLINES

USD 1.9 MLN INVESTMENT AT VEGA REFINERY TO INCREASE ENERGY EFFICIENCY

ompetrol Rafinare will upgrade, in the near future, the central heating system from Vega refinery in Ploiesti, in order to increase energy efficiency and continue to reduce the impact of its activities on the environment. The investment effort for this project amounts to more than 1.9 million dollars and includes, among other things, the installation of a new steam-boiler, manufactured in line with the highest standards, purchased at the end of last year. “The implementation of new projects within the Vega refinery is one of Rompetrol Rafinare’s priorities. In recent

years, the Ploiesti unit has witnessed an important operational growth that motivates us to go further and continue to drive the refinery on an upward road. Installing the steam boiler will help us streamline our production processes, but, very importantly, to have the lowest impact on the environment. Our goal for the next years is to increase the energy efficiency of Vega Ploiesti close to the maximum yield,” says Yedil Utekov, General Director of Rompetrol Rafinare. The steam boiler that is an ignitubular type boiler with two special fire tubes, was designed with three combustion gas routes, the optimal size of the furnace

providing a complete combustion and implicitly low air volume. The process of combustion of natural gas will be achieved by fuel grading and internal recirculation of combustion gases, resulting in a low level of nitrogen oxides (NOx). With a weight of about 60 tons, 8.9 meters long, 4.3 meters wide and 4.4 meters high, the new boiler can produce a nominal flow rate of 40 t/h of steam at rated pressure of 15 bar and a nominal temperature of 280 degrees Celsius. The part was recently delivered to the Vega refinery, which was designed, produced and tested according to the international PED 201/68/EU standard.

OPINION

Osaka G20 (G19 + 1) At the opening of the G20 summit in Osaka on June 28-29, Japanese Prime Minister Shinzo Abe said: â&#x20AC;&#x153;We need to find answers to global challenges, such as the need to step up action to avoid climate change threats, avoid trade wars, reform the international trade system and prepare for what the digital revolution means. In parallel, international tensions are increasing, for example the situation of Iran or the one created between the US and China.â&#x20AC;?

Ioan-Corneliu Dinu Scientific Counsellor at Romanian National Committee of the World Energy Council

he event certified, if it was necessary, the unavailability of the Great Powers - responsible for 80% of the harmful carbon dioxide emissions - to collectively commit to a serious fight against climate change. Four years after the Paris Agreement, the contradictions, more than obvious, followed by a progressive worsening, led to a record of carbon dioxide emissions, demonstrating the futility of the banal enthusiasm with which the agreement was received. The Osaka summit, as a historical fact, was accompanied by warning news in the days preceding the event, given the difficulty in drafting a joint press release that exceeds the 19 +1 formula at the previous Buenos Aires conference. Then, the 19 countries agreed a final text + US, which dissociated itself by expressing its own decision. During 2013-2017, the G20 meetings tripled state subsidies for coal-fired power plants, amounting to a total of USD 64 billion, and even if they had been presented in a joint press release, it would have been sparked with hypocrisy anyway. The 16

assessment is based on an ODI (Overseas Development Institute) document, which reinforced with this data the same conclusions, that between 2013 and 2017 the G20 countries extended support for coal-fired power plants (USD 64 billion). This support was given after a decade of promises to eliminate aids dedicated to fossil fuels. China, India, Japan, South Africa, South Korea, the US are in this order the great contributors. The question arises - what is the credibility of the statements made 4 years ago in Paris about clean technologies or even the irreversibility of the agreement itself ? On the other hand, one cannot forget the COP24 Conference in Katowice, the second most polluted city in Europe... Or should the national pride in the defence of coal be understood, something found not only in the speech of the Polish delegation? In fact, the 19 countries that have subscribed to the Declaration have not assumed any concrete obligation in relation to climate change. The Osaka Declaration in paragraph 35 lists 21 lines dedicated to these changes, and the 19 countries that agreed on the text did not

OPINION

take this obligation into account. Some clarity, honesty, is expressed in the 10 lines that synthesize the US position, which, after withdrawing from the Paris Agreement, declares itself oriented “to promote economic growth, energy security, energy access and environmental protection (...) while reducing emissions.” The United States said during 20072017 it cut emissions by 1.4%/year, a smaller rate than the 1.95%/year achieved by the European Union, with the Netherlands, Norway, Germany, Austria, Belgium and Portugal having serious contributions. The conclusion that can clearly be drawn is that without cooperation there is no solution in the fight against climate change, especially in the case where some of the signatories to the Paris Agreement are getting increasingly

closer to US approaches. Osaka has undoubtedly been the n fake step on the path to international co-operation, a path sprinkled with great enthusiasm, unambiguously declared in 2015. Returning to the lack of collaboration, the Osaka Final Declaration points to steps backwards compared to other summits. Long negotiations, statements on ‘global warming’ and decarbonization, aspects that do not suit various countries (including Japan) make it clear that these countries are more in agreement with US positions. Considering that the destiny of the Planet is at stake, without forgetting the inequalities of the world between the North and the South, the impoverishment of hundreds of millions of people etc.,

one could say without mistaking that an unimaginable plan, a tragicomedy towards the future of the Planet, was staged in Osaka. What the media did not report, part of the speeches of the various delegations that insisted on maximizing the saving virtues of electric cars or of the circular economy (exponents of the political or scientific world have made the climate their own profession and did not comment negatively on what happened in Japan), is a new confirmation of the aforementioned. Obviously, the usual major themes were also discussed, such as the major challenges faced by the world economy, the world trade issue, the imminent digital transformation, overview of climate and energy, but also the inequalities, gene rically speaking, existing in our world.

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OPINION

Relaunch of Romanian exports Between Diplomatic Priority and Market Criticism

Daniel Lazar

nternationalization of business is an expression heard more and more often at various conferences or business forums, and it would be a real success if it happened for Romanian companies. Regional projects, business hubs have been repeatedly mentioned, but so far, we have too few examples of success. What should be done? Presenting the investment opportunities offered by Romania and creating additional possibilities for Romanian companies to set up partnerships will be the objectives of foreign missions and economic forums, according to the Minister for Business Environment, Trade and Entrepreneurship, Stefan-Radu Oprea. At least this was the message conveyed to participants in the official session of the Days of Commercial Diplomacy meeting, held in the Aula Magna of the Academy of Economic Studies in Bucharest. He highlighted the importance of dialogue with the business environment and active involvement of all profile structures in Romania - chambers of commerce and industry, professional associations, employers’ organizations. “It is necessary to boost activity on several levels: consolidating exports on traditional markets, counteracting trade deficit, identifying new extra-Community target markets, diversifying exports and attracting foreign investments,” Radu Oprea pointed out. 18

The Romanian official indicated the importance of boosting Romanian presence on the South American market, especially in the context of the negotiations for a trade agreement with Mercosur being a priority of the agenda of the Romanian Presidency of the Council of the EU. Delivery of competitive products and services on the market of the European Union, which remains the main economic and trade partner of Romania, should also be maintained. In conclusion, Romania must continue its offensive for regaining traditional markets and opening new markets. Representatives of the business environment have the opportunity to use the expertise of commercial attachés to re-orient themselves to markets such as North Africa, the Persian Gulf or East Asia. Also, a closer and more applied collaboration between the Ministry for Business Environment, Trade and Entrepreneurship and the Ministry of Foreign Affairs will result in a stronger representation of Romania on the established target markets. Moreover, Romanian companies need to take advantage of the networking and European funding opportunities provided by the Enterprise Europe Network. In turn, during the conference that took place on the occasion of closing the Swiss-Romanian Cooperation Program, Integrated Export Services for SMEs in Romania - a project that introduced in Romania the culture of thorough

OPINION

preparation for making exports (Passport to Export) - the conclusion of those present was that currently there is no coherent approach to the continuation of this program. The project has developed training modules to prepare export strategies for 80 exporters, to prepare them to go to foreign markets, to this end establishing regional centers in Ploiesti and Bacau. “Unfortunately, this way of intervention at the level of exporters with potential, but which don’t know to address foreign markets, cannot be continued at optimal parameters, the centres needing further support to provide integrated services to both the first lot of exporters and others that should follow. Such an

instrument named Passport to Export, in other countries (see the case of the UK), needs an integrated national instrument of intervention in the public policy for the support and promotion of exports. To be in line with the National Export Strategy that focuses on extending the base of exporters, integrating the Passport to Export formula in the system of support instruments would be a welcome solution, but there is no substantiation of such a scheme. The Passport to Export scheme is one of the failures of the National Export Strategy, together with the creation of the Trade Promotion Centre, the possibility of using local staff at the Consular Offices/Consular Economic Promotion Offices (BPCE),

supporting export clusters, sectoral branding campaigns etc. The RomanianSwiss Cooperation Program is a drop in an ocean because there are hundreds of companies that have export potential but cannot benefit from consistent training until such a scheme operates at national level,” says Costin Lianu, coordinator of the National Export Strategy 2004-2015, president of the Association of Export Business Centres (ACEX) and General Manager of USH Pro Business. We want the number of Romanian companies with regional businesses to grow in the future. But the question is will Romania succeed in implementing effective instruments that will lead to the sustainable development of exports?

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Office Ploies‚ ti Romania ILF Consulting Engineers Romania 16 Negru Voda Str. RO-100149 Ploiesti ‚ Tel.: + 40 (344) 401-333 Fax: + 40 (344) 401-334 romania@ilf.com www.ilf.com

Premiere in the Black Sea

Gloria Production Rig Decommissioning 20

With an experience of more than 30 years in full-time positions in the oil & gas industry, of which over 26 years exclusively in the offshore segment, Constantin Gheorghe is currently President of the Competent Regulatory Authority for Black Sea Offshore Petroleum Operations (ACROPO). In the past, he held various positions in Central and Eastern Europe, West and North Africa, Gulf of Mexico, Brazil and Persian Gulf. His extensive experience, both domestically and internationally, is doubled by a significant experience in management and coordination of operations. Constantin Gheorghe discusses about ACROPOâ&#x20AC;&#x2122;s role and importance, as well as about the evolution of Black Sea operations, from the perspective of their safety and improvement of environmental quality in the Black Sea area under Romaniaâ&#x20AC;&#x2122;s jurisdiction. 21

Dear Mr. Constantin Gheorghe, please tell us what are the purpose and objectives of ACROPO. What tasks and competencies does the institution you coordinate have? To better understand our role, I believe itâ&#x20AC;&#x2122;s a good idea to start from the context! And the context is simple: Romania is one of the largest gas producers in the European Union. We could say even that our country is one of the countries least dependent on imported gas. Our tradition in the gas sector is known especially in onshore. Thatâ&#x20AC;&#x2122;s because, until several years ago, fields have been discovered onshore rather offshore. But what changes entirely the approach are the new offshore discoveries: important gas fields in the Black Sea. Romania is preparing itself for a great role in Europe, starting from the following certainty: 6 of the top 10 Black Sea fields are located in the territorial waters and in the exclusive economic zone of our country. Therefore, Romania has the chance to double its

role of electricity exporter in the region, with the role of natural gas exporter. The Competent Regulatory Authority for Black Sea Offshore Petroleum Operations (ACROPO) has a key role in all these energy dynamics: to ensure that Black Sea gas operations are safe for the people and the environment! This is exactly the reason ACROPO has been established for.

ACROPO WAS ESTABLISHED IN ORDER TO ENSURE, TOGETHER WITH OPERATORS, A HIGH LEVEL OF SAFETY IN OFFSHORE PETROLEUM OPERATIONS IN THE ROMANIAN BLACK SEA SECTOR. 22

What are the levers you have available to ensure the safety of existing and planned operations? In order to ensure the safety of existing and planned operations, we have three main levers available: a. A strict regulatory framework applied in the offshore segment, framework establishing the minimum requirements for reaching the highest possible level of safety of operations; b. Evaluation of the documentation requested pursuant to the Law for the transposition of the Offshore Safety Directive, documentation which Operators must submit to ACROPO and through which they prove how they identify, assess and mitigate the risks of major accidents associated with the operations they plan to carry out; c. A regular monitoring throughout the duration of the projects on how the Operators apply the measures they have committed to take when they’ve submitted the documentation to ACROPO.

How was ACROPO established and which are its achievements so far? ACROPO was set up in September 2017, with the publication in the Official Journal of GD 688, which has defined the Functioning Framework along with the Organizational Chart of ACROPO. We started from scratch. It was necessary to find people with experience in the offshore petroleum sector, endeavour which was not easy. However, in mid-2018 we’ve managed to have both the team and the secondary legislation (the regulatory framework). We’ve continued with the organization of regular meetings with the offshore Operators, meetings aimed at clarifying any potential misunderstandings relating to the new regulatory framework applicable to the offshore field. In parallel, we’ve initiated meetings with all the factors responsible in the offshore segment, at both local and national level, proposing and establishing agreements of inter-institutional cooperation with them, in order to align the national legislation applicable in our field of competence. 23

What programs/projects have you completed until today? Which other projects are currently in progress? Since mid-last year to date we have completed the assessment of 31 documents sent to us by the Titleholders, with a total volume of hours worked of 5372-man hours. We have also carried out 8 inspections at

INTERVIEW

the existing productive facilities and at two non-productive facilities, involved in two drilling projects. We are presently getting ready for three extremely complex projects, which will start by the end of this year: • First of all, the deep drilling operations will be resumed. Lukoil is preparing to start operations for drilling the Trinity-1X well, in Trident block; • Secondly, Black Sea Oil & Gas will start the Midia Gas Project, for which it has already obtained the construction permit; • We are also preparing to start the project of decommissioning of the Gloria productive rig, an extremely challenging project, the first of this type in the Black Sea.

THE MAJOR PROJECTS ARE ABOUT TO START, IN BOTH SHALLOW AND DEEP WATERS. STARTING WITH THE LAST QUARTER OF THIS YEAR, OFFSHORE PETROLEUM OPERATIONS IN THE ROMANIAN BLACK SEA SECTOR WILL INCREASE SIGNIFICANTLY AND MAINTAIN AT A HIGH LEVEL AT LEAST FOR 3-4 YEARS FROM NOW. The Black Sea is a bridge between production regions and consumption, being at the same time considered strategic for the energy policy of the European Union. What is the situation in Romania compared to other EU Member States in terms of response in case of major accidents potentially occurring during operations of hydrocarbon exploration/exploitation in this area? I have repeatedly stated it: Romania’s response capacity in cases of major accidents still needs improvement. I would not make a comparison with the other Member States, because there are many different aspects. The response required in case of a major accident must be adequate in capacity and quality and this is what we are working for with all the responsible public institutions.

The consequences of an inadequate response in a major emergency situation? The medium and long-term consequences are difficult to estimate or calculate. I believe all public institutions responsible for ensuring a correct and efficient response to an emergency situation (multiple casualties and massive pollution) should sit together and put the cards on the table. We need to find the necessary solutions to counteract the consequences of a major accident offshore. After we do that, we can call to discussions the representatives of the other 24

riparian countries and present the solutions we have found, trying to find a common understanding and way forward at regional level. In this way, any major accident reported in the Black Sea area will have an adequate response, both in management and capacity. After all, the Black Sea is the treasure we benefit all of us and we need to do whatever it takes to keep it in good condition.

Which are the partners (institutions) you collaborate with in such situations? We collaborate with all the public institutions responsible in the offshore and maritime segments, at the local and national level.

How do you plan to solve the issue of labour force in the sector you coordinate, given the lately reduction of the number of specialists in the oil and gas industry, for various reasons? You have raised an important issue. Although this is not included in our scope of work, we have offered our support with the aim to encourage the future graduates to turn their eyes to the offshore oil and gas sector, as well as to create a link between the academia and the providers of labour force involved in this field. In this respect, we have already presented our offer both to the academia and the employers actually operating offshore in Constanta. This has been very well received and we are currently preparing a cooperation agreement between all the involved parties. Hope we will start our project soon and reap the benefits starting maybe as early as next year.

You have been nominated by the Government of Romania as the National Expert to represent Romania in the Offshore Safety Committee at the level of the European Commission. How does this experience influence the activity you carry out? It was an excellent opportunity to learn from the experience of the counterpart authorities in countries with tradition in the

field. I refer especially to the countries bordering the North Sea. I added this experience to the expertise I had in this field in which I have activated for more than two decades.

Two Romanian drilling rigs have been accepted to operate offshore North Sea. What lessons have been learned from this activity? I can proudly say that I was the one who has coordinated this project from the position of Corporate QHSE Manager for two companyâ&#x20AC;&#x2122;s drilling rigs entering the first time in the North Sea area. It was the first experience of this type and it was successfully completed, being accepted by the Regulatory Authorities of the respective countries and being able to start operation in the respective offshore sectors. What did we learn from this experience? Weâ&#x20AC;&#x2122;ve understood both the level of the regulatory requirements and the relationship which has to be established between Operator and the Authority, lessons taken into account during the first steps since ACROPO has made.

Currently, the offshore operations carried out in the Romanian continental shelf of the Black Sea register quite a slow pace. How do you assess the future development 25

of activities in this area? The major projects are about to start, in both shallow and deep waters. I expect that, starting with the last quarter of this year, offshore petroleum operations in the Romanian Black Sea sector will increase significantly and maintain at a high level at least for 3-4 years from now.

During Oil & Gas Tech 2019 Conference you said that Romania registers a regional premiere, namely the decommissioning of an offshore rig in the Black Sea. Can you provide more details? Which are the challenges relating to these operations? It is indeed the first such project in the Black Sea. A premiere! An extremely challenging project in

WE WISH TO EXPORT OUR EXPERTISE, AS WELL AS THE PROJECTS WE CONSIDER TO IMPROVE THE LEVEL OF SAFETY IN OFFSHORE PETROLEUM OPERATIONS TO ALL THE COUNTRIES BORDERING THE BLACK SEA, WHETHER EU MEMBER STATES OR NOT.

terms of risks involved, risks due especially to the age of the offshore rig that is subject to decommissioning. We have offered our support to the Operator of the rig to provide advice in terms of finding the safest option and we are waiting for the related documentation to assess it and officially state our point of view. Hope everything will go smooth and safe, for everybodyâ&#x20AC;&#x2122;s benefit. 26

Do you believe Romania can represent an example for the countries bordering the Black Sea in terms of measures to protect and preserve the marine environment? The Offshore Regulatory Authority in Romania has a quite high level of regulation, level which is quite often assimilated to that of similar authorities in the countries bordering the North Sea. This has been highlighted by the other European offshore competent authorities, during our periodical meetings. We wish to export our expertise, as well as the projects we consider to improve the level of safety in offshore petroleum operations to all the countries bordering the Black Sea, whether EU Member States or not. Some of these projects are pioneering in this area and Romania can be the driver determining the implementation of these projects, with a huge benefit for all riparian countries.

Kraftanlagen Romania S.R.L. was founded in 2007 as a subsidiary of the German company Kraftanlagen MĂźnchen GmbH and expanded its local services successfully in 2014 with KAROM Servicii Profesionale in Industrie S.R.L. and in 2016 with IPIP S.A. We engineer, design and build complex piping and plant systems for the chemical and petrochemical industry. Our technical competence covers also requirements for new plants and maintenance for refinery, extraction & production and industrial plants. The range of our solutions: Feasibility, process studies Basic design and front end engineering design Multidisciplinary detailed engineering Technical documentation for authorities Project management Technical assistance for commission, start-up, test run, guarantee test Supply and installation of all pipelines and brackets Basic and precision installation of all components, such as devices, columns, pumps and compressors Steel construction Installation of cracking and reaction furnaces Tank farm construction System integration, operating checks and commissioning Plant revisions Pipeline and bracket corrosion protection Insulation Scaffolding

OIL & GAS

GSP Uranus rig approaching OMV PETROM installation in the Black Sea | © OMV Petrom

New Drilling Campaign in the Black Sea OMV Petrom, the largest Romanian energy company, started new offshore drilling campaign in the shallow waters of the Istria block in the Black Sea. Two new wells will be drilled by the end of the year, requiring investments of over 30 million euro. “We are committed to Romania and we invest significant amounts to secure Romania’s energy supply. The Istria block in the shallow waters of the Black Sea has a history of over 30 years of oil and gas production. Although fields are mature and reached their plateau production years ago, sustained investment and adequate engineering solutions enable us to unlock additional resources and to mitigate production decline”, said Peter Zeilinger, member of OMV Petrom’s Executive Board responsible for Upstream. 28

OIL & GAS

GSP Uranus rig approaching OMV PETROM installation in the Black Sea | © OMV Petrom

he two wells will be drilled at over 2,000 meters below the seabed, in water depths of approximately 50 meters. They target additional production from the Lebada East field (oil and associated gas), discovered in 1979. This offshore drilling campaign comes in continuation of investment projects for offshore production in the shallow waters of the Black Sea: over 350 million euro were invested between 2014 and 2018, including drilling ten new production wells and sidetracks, upgrading the gas compressor system and modernizing production facilities. Exploration in the Romanian continental shelf of the Black Sea started in 1969. The first hydrocarbon discovery was in 1980, and the first production in the Black Sea started in 1987. Currently, OMV Petrom has exploration, development and production operations in the shallow waters (Istria block) and exploration activities in partnership with ExxonMobil in deepwater areas (Neptun Deep). Oil and gas production in shallow waters (Istria block) currently amounts to approximately 25,000 boe/day. In 2018, it accounted for around 17% of the Group’s domestic production. The 2018 oil and gas production of the Black Sea is the equivalent of the quantity used to heat approximately 1 million households for a year or to fill up the tanks of 3.5 million cars.

The production comes from five producing fields: Lebada East (discovered in 1979), Lebada Vest (discovered in 1984), Sinoe (discovered in 1988), Pescarus (discovered in 1999) and Delta (discovered in 2007). OMV Petrom is the largest energy company in South-Eastern Europe, with an annual Group hydrocarbon production of 58.3 million boe in 2018. The Group has a refining capacity of 4.5 million tons annually and operates an 860 MW high efficiency power plant. The Group is present on the oil products retail market in Romania and neighbouring countries through 792 filling stations, at the end of March 2019, under two brands – OMV and Petrom. OMV Aktiengesellschaft, one of the largest listed industrial companies in Austria, holds a 51.011% stake in OMV Petrom. The Romanian State, through the Ministry of Energy, holds 20.639% of OMV Petrom shares, Fondul Proprietatea holds 9.998%, and 18.352% is the free float on the Bucharest Stock Exchange and the London Stock Exchange. OMV Petrom is the largest contributor to the state budget, with contributions of 27.8 billion euro in taxes and dividends paid between 2005 and 2018. Since 2007, OMV Petrom has included corporate responsibility principles into its business strategy. Between 2007 and 2018, the company has allocated approximately 52.5 million euro to develop communities in Romania, focusing on environmental protection, education, health and local development. 29

OIL & GAS

Pojorata-Vatra Dornei Gas Transmission Pipeline Romanian Government has passed a decision under which the Pojorata-Vatra Dornei gas transmission pipeline was declared project of national importance in the gas sector. The project, with an estimated value of RON 27,331,245, was included in the National Development and Modernization Plan of Transgaz, company in the portfolio of the Ministry of Economy, plan approved by ANRE, thus resulting in its strategic and national dimension. 30

OIL & GAS

urrently, in PojorataVatra Dornei area there is no gas supply pipeline. Firewood, coal and liquefied gas are used for heating up the homes and preparing food. These fuels are also used to heat up commercial spaces and existing social cultural objectives. Completion of Pojorata-Vatra Dornei pipeline section creates the prerequisites for interconnecting the gas transmission system in the north-west of the country with the gas transmission system in the north-east, thus being defined as a project of national importance. The implementation of this project also addresses a number of social needs, in a significant geographic area - the northeastern part of the country, including education (kindergartens, nurseries, educational establishments, university campuses not connected to

gas), health (future regional hospitals, county, municipal and urban hospitals, elderly homes and social centers), social protection and employment. Economy Minister Nicolae Badalau said the project is a proof of how the Romanian Government supports local communities and contributes to increasing the quality of life of Romanians living in rural or urban areas, in small and medium-sized communities. “Through this project we provide access to natural gas for all localities on the route of the pipeline. We are talking about approximately 35,000 inhabitants, 12 secondary schools, 12 kindergartens, 5 high schools, school clubs, libraries, 3 hospitals and spa complexes, as well as tens of medical practices. Equally important is the economic impact for the development of the area, an important area for tourism, with major objectives, very loved and sought by the Romanian and foreign tourists, the area having an economic profile of ecumenical and leisure tourism. Vatra Dornei Resort is a tourist resort of national interest, Pojorata commune is a tourist resort, and Sucevita commune is a tourist resort of national interest, which leads to the initiation of numerous investment projects, which are being designed or implemented. In addition, in the area there are spa chains with a very wide range of natural factors. Private investments in tourism exceeds RON 300 billion, investments made for new accommodation capacities and modernization of existing ones, generating 15% more accommodation capacity and 25% more tourists,” the Economy Minister said.

Background The gas transmission pipeline FrasinCampulung Moldovenesc-Vatra Dornei, DN 300/DN 250, design pressure 40 bar, with a length of 65.57 kilometers, was designed and partially built during 2005-2006, within the program Utilities and Environment at European Standards in Suceava County, whose technical and economic indicators were approved 31

under GD No. 484/16.05.2002. One of the proposed pipelines was the gas transmission pipeline Frasin-Campulung MoldovenescVatra Dornei, Dn 300/Dn 250, Pn 40 bar (design pressure) with a length of 65.57km. The pipeline section FrasinCampulung Moldovenesc, Dn 300, was completed, but it was not commissioned, and the pipeline section Campulung Moldovenesc-Vatra Dornei was partially executed. Legal steps were taken in 2009 for Transgaz to take over all pipelines and connections for gas transmission executed within this program. After carrying out the technical analysis and preparing the technical and economic documentations, they were handed over definitively and free of charge by the Suceava County Council to the Transgaz patrimony. Thus, according to the development program of the company for 2011, in a first stage, the 29.6km long pipeline section FrasinCampulung Moldovenesc was reviewed and commissioned, section ensuring gas supply to the locality of Campulung Moldovenesc. The pipeline section Campulung Moldovenesc-Vatra Dornei, Dn 250, with a length of 35.67km, was partially executed by the Suceava County Council through the program ‘Utilities and Environment at European Standards in Suceava County’. After Transgaz had taken over the entire objective, this section was redesigned and in a first stage a pipeline section was commissioned in December 2017, from Campulung Moldovenesc to Pojorata, with a length of 9.28km. Since then, the technical design rules were modified, so now the technical project includes the technical details specific to Pojorata - Vatra Dornei section. Vatra Dornei municipality has a population of approximately 16,850 inhabitants, being the fifth largest urban center of Suceava County; it operates with a biomass (sawdust) power plant, having real problems in the supply of thermal energy to the population and businesses, a situation that is found in the whole mountainous area of Suceava County.

OIL & GAS

Euro Gas Systems to Continue the Expansion New Milestone in 2019 32

OIL & GAS

uro Gas Systems (EGS) SRL is a Romanian based company, focused on providing compression equipment for the Upstream Oil and Gas industry. Acting as an approved packager (OEM) and official distributor for several lead market equipment manufacturers such as Ariel Corporation, INNIO Waukesha, Caterpillar, Sullair, GEA Grasso, EGS is serving customers within European, CIS, Middle East and African markets. The product offered is tailor made to customer requirements with a wide flexibility of integrating customer specs due to in house engineering capability. EGS experience in gas compressor packages supply covers solutions ranging from 100 KW up to 3.5 MW both electric and gas engine drives. For almost a decade now, EGS has been continuously focused on customer satisfaction by delivering on-time top quality products. The commitment for investments in developing the company’s product range, production, engineering and service capabilities has been one of the keys to success. Today EGS’s in house expertise is covering the full cycle of product designing, manufacturing and service support. Developing the product range and turning EGS in a single point of supply for the key account customers, has been one of the strategies followed. Starting with 2015 EGS has added the screw compressor technology to the product offering, followed by adding in 2016 another new line of products, engineered Air Cooled Heat Exchangers (ACHE) with primary sales focus in the oil and gas industry. Customized gas engine driven generator is the new product release for 2019. Increasing the production capabilities in order to keep up with the market demand, has been a constant investment priority for EGS shareholders. First assembly plant located in the city of Tg. Mures is today used as pressure vessel manufacturing shop. The construction of 2nd plant located in the Industrial

Park of Tg. Mures has started in 2011 and commissioned in 2012, measuring 2400 sqm of assembly floor and offices. As EGS gain market recognition, the need of doubling the assembly Plant 2 became a must and on 12 of June this year EGS celebrated the accomplishment of this new milestone. Totalling an approximate 6600 sqm of assembly floor and offices, heavy lifting capacity (100 tons), top quality production equipment (CNCs, plate rolling machines, auto welding machines, etc.) EGS is quickly becoming one of the 33

most important players in the region. EGS is dedicated to continue the expansion, planning to add two new assembly plants in the coming years. The exclusive OPEN HOUSE event held on June 12th for celebrating the expansion of Plant 2 gathered over 300 guests from 20 countries. From customers to suppliers and employees, everybody enjoyed a full day event meticulously planned. The networking opportunity and nevertheless the local and international ‘hors d’oeuvres’ ensured the great success of the event.

OIL & GAS

Lack of Workforce, a Thorny Issue Training the Future Oil and Gas Specialists At a time when the lack of workforce is a major issue for employers in Romania, legislating the dual education could be a starting point for filling this gap. The companies that believed in this saving solution include OMV Petrom.

Text by Daniel Lazar

he Oilmen’s School (Scoala Petrolistilor) is the initiative through which OMV Petrom has created and supports 6 vocational education classes, with majors in oil and gas industry. Two generations of future oil and gas specialists have been trained between 2015 and 2019 in 3 technological high schools in the country: ‘Astra Pitesti’ Technological High-School, ‘Grigore Cobalcescu’ Technological College in Moinesti and ‘Voievodul Mircea’ Technological High-School in Targoviste. The students get a professional qualification recognized at European level and depending on their scholar performances, OMV Petrom offers students a monthly study scholarship up to RON 700. So far, around EUR 110,000 have been allocated to rehabilitate

classrooms and improve laboratories in the 3 partner high schools with equipment mandatory for students’ practice. Together with the Ministry of Education and Scientific Research, OMV Petrom employees developed updated training materials that served teachers and students. In 2018, the first generation of students from Oilmen’s School passed the professional skills certification exam. Assessed by OMV Petrom specialists, the 83 students successfully proved what they learned during the 3 years of theoretical and practical training in vocational school. Moreover, 25 of these students of the Oilmen’s School are now OMV Petrom’s employees.

EUR 500,000 for SMART projects RO SMART in Andrei’s Country (Tara 34

lui Andrei), now at its second edition, is a national projects competition, which through technology and digitalization transforms Romanian communities in the communities of the future. OMV Petrom looks for those innovative projects that aim at using technology and digitalization to improve the quality of life, for efficiency in terms of resource consumption and for a more efficient access to public services. The competition focuses on 5 key areas: education, health, environment, transport and infrastructure. Last year, OMV Petrom offered grants totalling EUR 400,000 for SMART projects proving that through technology, the future can be made present. This year, the total value increases up to EUR 500,000. One of these projects is ‘AV1 Robot – The voice of children with cancer in Romanian schools.’ With the help of AV1,

OIL & GAS

children with cancer can attend classes along with their school colleagues and teachers, even when they are in hospital, just by using a phone or a tablet. AV1 Robot is taking the child’s place in class, which, from a distance, can benefit from the entire scholar experience – takes part in classes and is next to his colleagues on recess. This cute robot represents the eyes and voice of sick children enrolled in school, in Romania. In 2019, OMV Petrom sponsored with EUR 10 million the construction of the first Pediatric Oncology and Radiotherapy hospital in Romania, a project developed by the Give Life Association (Asociatia ‘Daruieste viata’). Of the EUR 10 million, 5 million will be used for the acquisition of the medical equipment required for diagnosis and treatment of pediatric cancer: a radiotherapy machine, a computer tomography device and other equipment

for the operating theatre. Also, other 5 million euros will be used for installation works and interior design.

What does dual education mean Dual vocational education is organized after the completion of the 10 compulsory grades, compared to vocational education of two or three years, which is organized at the end of the grade 8 and 9 respectively. The new type of dual vocational education is different because it is organized only at the request of economic operators. Educational authorities are responsible for providing human and financial resources and organizing technical theoretical training in school (1-2 days per week) and the employer must provide human and financial resources and organize practical training, at the workplace (3-4 days). This form of vocational education

is complementary to those currently in place, and GEO 94/2014 provides the legal framework for organizing it, giving economic operators the opportunity to get involved directly in all the components of training the workforce they need. Dual education is organized based on a labour contract, a novelty being the fact that it is carried out on the basis of a contract of employment concluded between the economic operator and the student. Basically, dual education offers graduates the opportunity to enter the labour market and, at the same time, to continue their professional training at a higher level of qualification. Graduates from previous series who left the education system after graduating from compulsory education without completing their training with a qualification or without skills to offer them employment opportunities also have access to dual education.

OIL & GAS

Fuel Price Monitor Brings New Rules to the Market The Competition Council in early July launched the Fuel Price Monitor application, which displays prices for all types of fuels (gasoline and diesel) in OMV, Petrom, Rompetrol, Mol, Lukoil, Socar and Gazprom networks across the country.

Text by Daniel Lazar

he fuel price monitor is available both as a web app, www.monitorulpreturilor. info, as well as a mobile application (IOS and Android) downloadable from the App Store and Google Play, offering multiple

search, sorting and filtering features. Immediately after this initiative had been announced, numerous debates occurred in the public space and the Competition Council supports the implementation of rules for all operators to display simultaneously the increases 36

in fuel prices, in certain days and at established hours. The Competition authority requests the adoption of this measure following a sector investigation on the retail fuel market in Romania which confirmed that the existence of one leader, which

OIL & GAS

owns approximately half of the market, has a direct effect on how retail fuel prices change, this being, usually, the initiator of price changes. At the same time, each company constantly monitors the activity of rivals and reacts to their price changes. Thus, the competitor companies prefer to adopt a similar behaviour as the one of the leaders in terms of price changes, which often take place within 24 hours.

Legislative act establishing the number of weekly price increases Under the conditions mentioned above, competition in the retail fuel trade market in Romania is reduced, which reflects on the level of retail fuel prices. Therefore, in order to increase competition in this sector, the Competition Council supports drawing up a legislative act to establish the number of weekly price increases, the days when such increases can be applied and the time of change, valid for all companies in the market, no restriction being imposed for price reductions, being allowed at any moment. The level of competition is also influenced by a number of structural factors, specific to the retail fuel market in Romania, of which the most important is represented by the very high degree of market concentration: a restricted

number of oil companies that own approximately 90% of total fuel sales. From the analyses carried out, it resulted that prices at the pumps were correlated during 2014-2018 with the international quotations of petroleum products (gasoline and diesel), price changes in Romania closely following the international evolutions in terms of both increases and decreases. As far as the structure of the fuel price is concerned, the data show that the excise duty and VAT account for a significant share, of about 50% of the final price. According to recent data published by the European Commission, Romania is among the European countries where the final prices, with taxes, are much lower than the European average for both gasoline and diesel. In terms of tax-free prices, the price of gasoline is also below the European average, while diesel prices fluctuate around the European average. Competition could increase by improving the permitting process for the construction of filling stations and the entry into the fuel market of hypermarkets/supermarkets.

Without the same operator twice on the same motorway section The Competition Authority also recommends the competent authorities 37

(CNAIR, ANAP) to analyse the possibility of modifying the legislation so as to avoid situations where a company operating a station on a motorway section builds another station located before or after the initial station. In this way, competition will be stimulated locally, and the consumer will be able to choose the most advantageous offer. At the same time, the Competition Authority encourages companies to inform it of any barriers to entry into the market they are facing, so that they can be subject to analysis and, where appropriate, to allow the identification of possible solutions to facilitate entry on the retail fuel market. Moreover, the Competition Council considers the NAMR decision to set the reference price for crude oil extracted in Romania depending on Brent quotation from the previous month is opportune. This type of oil responds to the conditions on the European market and is also relevant for the Romanian fuel market, and it is therefore normal to be considered when establishing royalties for oil extracted in Romania. In conclusion, the Competition Authority considers that the increase in petroleum royalties will intensify the competitive pressure on the market, in conditions in which no barriers are created in the way of import of motor fuels in Romania.

OIL & GAS

Odfjell Well Services Opens New Repair Shop in Ploiesti Odfjell Well Services (OWS) is a significant player within the upstream oilfield service sector and part of Odfjell Drilling. The company provides tubular running services, drilling tool rental and well intervention services, serving clients across the globe. OWS, established in Europe and the Middle East with hundreds of skilled, highly qualified and engaged employees working around the world, has been present in Romania since 2009. 38

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“Back in 2013 about 90% of our business was coming from Romania. However, we were very dependent on one or two very large operators which were generating the majority of our revenue. For the stability of our business we started shifting our focus towards new jurisdictions. Presently about 60% of our business comes from Romania, whereas the remaining 40% comes from other countries in the region. It is no coincidence that we chose Romania as a regional hub. Romania’s long tradition in oil and gas brings the advantage that it is easier to find skilled people than in other places and this is key for our business. ”

ecently, OWS Romania announced the expansion of their facilities by opening of a new repair shop in Ploiesti – another important millstone for their local business, and the acquisition of brand-new CNC machines (Hankook Protec 9N) and other machineries ready to add value to their services. In Romania OWS operates since 2009 but the local entity has been set up a few years later, in 2012. The company is presently going through a period of growth and just recently surpassed 50 employees. “From here we coordinate the larger area of Central and South Eastern Europe. It is no coincidence that we chose Romania as a regional hub - we managed to have a very good start in this market and we were able to put together a very strong team. Romania’s long tradition in oil and gas brings the advantage that it is easier to find skilled people than in other places and this is key for our business. We tend to share resources between the different countries in which the Odfjell Drilling operates, for instance many Romanians have participated in projects in the North Sea or Middle East,” Alexandru Gomoescu – Regional Manager at Odfjell Well Services, says. “Back in 2013 about 90% of our business was coming from

Alexandru Gomoescu – Regional Manager at Odfjell Well Services

Protec 9N series present capabilities • Combine advantages of brand new Hankook Protec 9N, full CNC lathe and manual lathe • Connection repair or new connection machining • Connection recuts, by removing minimum amount of material to ensure a full repair • Connection refacing • Cold- working for increased fatigue life • Custom repairs • Phosphate coating of the pin and box • Field and in-house inspections • Pipe management

Romania. However, we were very dependent on one or two very large operators which were generating the majority of our revenue. For the stability of our business we started shifting our focus towards new jurisdictions. Presently about 60% of our business comes from Romania, whereas the remaining 40% comes from other countries in the region,” he mentions. “This regional expansion has become very important for us; we have in fact put together a new geo-market as part of our Group’s strategy. We have just added new countries to our portfolio and starting out we will provide services sourced from Romania, but the plan is to open new entities in the coming years. Market might change fast; fluctuation in oil prices might force clients to reconsider their drilling campaigns. All these will not make any change or difference for OWS in delivering same high quality, safety and reliable services for clients in Romania and abroad. In generally we keep an eye out for market developments to understand what makes most sense in terms of expansion going forward,” Alexandru Gomoescu ads. Regarding the plans for the upcoming period, the manager underlined that the company firstly wants to solidify its portfolio and chasing for new businesses. There are some new challenges to adapt to, for instance more complex projects in new areas or different (rigid) procurement practices. “We are also very interested to take on more Deepwater work in the Black Sea and Mediterranean,” Alexandru Gomoescu concludes. 40

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Talking to Experts - Saniya Melnicenco

ROPEPCA’s Perspective on the Oil and Gas Market in Romania The conversation with Saniya Melnicenco, Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) President, had as main topic for debates the situation of the oil and gas market in Romania - challenges and outlook, ROPEPCA’s role and importance in the development of the oil and gas industry in Romania, as well as harmonization of stakeholders’ interests - benefits for the economy, investors, population.

“If

I were to summarize in several words the current situation of the market, then the main subjects that I would include on the agenda are: safety of supply to consumers in Romania, modernization of the Petroleum Law and unpredictability of the fiscal and regulatory framework in the onshore segment. Regarding the energy security of the country, it is ensured at a rate of 90% by onshore companies, in terms of natural gas ranking first in Europe as regards onshore production exclusively. Currently, hydrocarbons account for

over 68% of Romania’s primary energy sources, the share of natural gas in electricity generation being over 17%, and this figure is forecast also for the 2030 horizon, natural gas being an essential component of a balanced energy mix,” Saniya Melnicenco said.

International context In the opinion of ROPEPCA President, in the international context characterized by the increase in demand and the commitment to reduce carbon emissions, Romania experiences a natural decline of production and lack of investments. Most productive fields 42

are mature fields with production in decline. To continue operating these fields, large investments are needed. There is also a high geological potential still untapped, which could change the current situation. To understand the true potential, investments in exploration are required. Thus, the Association sees an opportunity in maintaining and even increasing gas supply in the country from domestic production boosting investment through an adequate legislative framework, particularly in view of the recent public call for tenders published by the National Agency for Mineral Resources. Through the longawaited Round XI for exploration,

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favourable prerequisites were created to attract the investments needed by Romania. Therefore, difficulties faced by titleholders of petroleum agreements should be solved by improving the current legislation. From the practice of recent years, some of the most acute problems faced by producers in the exploration phase is that of land access, regulated under the Petroleum Law No. 238/2004. Not significantly amended since 2004, the law no longer matches the current realities of petroleum activities and no longer provides a functional legal mechanism. ROPEPCA, in collaboration with state authorities and with other market players, has prepared a balanced proposal for the amendment of the Petroleum Law, in a manner that would bring it up to date. Currently, the amendment of the law is

being debated and ROPEPCA actively participates in all the constructive debates in this regard, with all stakeholders. The proposed draft starts from a basic principle, that petroleum operations are of national public interest. To better understand this aspect, Saniya Melnicenco also refers to European examples in the field: in Norway, the relevant legislation provides that management of state resources should be in the benefit of the Norwegian society as a whole; in Italy, hydrocarbon exploration is considered, under the law, of public interest; in the Netherlands, in terms of legislation in the field of spatial planning (Spatial Planning Act), subsoil exploitation is of national interest. Moreover, returning to Romania, according to the draft Energy Strategy, it is planned to boost long-term investments 43

in the field of petroleum production, the document showing the importance of hydrocarbons in the whole energy picture for the following 30 years. The draft amendment to the Petroleum Law also solves the issue of land access. â&#x20AC;&#x153;We are trying to harmonize the interests of landowners and those of land users, establishing in the end a fair mechanism for the payment of compensations for the potential damages caused to agricultural crops, in the case of exploration operations through geophysical data prospecting,â&#x20AC;? ROPEPCA representative pointed out. As regards market situation, Saniya Melnicenco recalls that, starting with May 2019, under Government Emergency Ordinance No. 114/2018 (GEO 114/2018), the sales price at producers for natural gas intended to ensure household consumption and produce thermal energy was established at RON 68/MWh. This decision has disturbed the national market, in full process of maturation. Fully liberalized since April 2017, the gas market was never allowed to operate in a truly free manner. In 2018, other legislative provisions were introduced, with a major impact on the activity of gas producers and violating the principles of a liquid and functional gas market, as well as those of a healthy market economy. For example, under an amendment to the Electricity and Natural Gas Law No. 123/2012, upstream companies have the obligation to sell 50% of gas production on the centralized wholesale market. Failure to comply with this obligation may result in heavy penalties. Although there is no doubt about the justification or benefits of a centralized market, the Association believes that joining it must be voluntary. A main element of a free market is freedom to choose. â&#x20AC;&#x153;Gas market functioning is seriously affected by the unpredictability of the fiscal regime applied to the industry, which is high compared to other European states. An example in this regard is the tax applied to windfall gains obtained by producers as a result of

OIL & GAS

deregulation of the gas market, which was introduced as a temporary measure in 2013, aimed to ensure vulnerable consumers’ protection against potential fluctuations of prices generated by market liberalization. The tax became permanent by law in 2018 (Law No. 73/2018). In July, the Court of Auditors, through a performance audit report on the gas market in Romania, found that this tax has led to an increase in gas imports, which became cheaper,” ROPEPCA President pointed out. According to a Deloitte study, commissioned by ROPEPCA in 2017 and updated in early 2018, the level of royalties and other similar taxes increased during 2014-2017 to 17.4%, way above the European average of 8.8%. In most European states, the average effective rate of royalties and taxes fell, in response to the strong decline of oil and gas prices that has affected the industry in the recent years. If we also took into account the decisions made in the last year, the rate would definitely be higher. “Unpredictability on the taxation system in the gas sector is an important barrier for investors. By fiscal stability, Romania, which is a country with a long history of petroleum production, of more than 160 years, would have only benefits. The petroleum industry has provided a technological and economic growth of society and will continue to be a solid base for its welfare, being an accessible and safe source of heat, transport and electricity and having a significant impact on the development of other economic sectors, such as agriculture, medicine or research,” Saniya Melnicenco mentions.

ROPEPCA’s role and importance in view of development of the oil and gas industry in Romania ROPEPCA has been the voice of the petroleum industry in Romania for seven years. The producers’ decision to have a unified voice has come amid a growing need to improve the industry’s framework, and ROPEPCA has become a dialogue partner with all stakeholders, from public

authorities to industry and the media. Through the expertise of the Association, which brings together most titleholders of onshore petroleum agreements, it can provide valuable information about the market and industry on a number of subjects, whether it is about regulation, sustainable development, economy or technology. ROPEPCA currently brings together 13 producers, which over the past five years invested over EUR 5 billion, the source of investments being diverse, bringing in Romania US, Australian, Kazakh, Canadian and European capital. According to a KPMG study conducted in 2016 on the economic impact of the industry, each EUR directly invested by producers reflects in national GDP, having a multiplication factor of 3.2. Besides investments directly related to the petroleum operations carried out, the members of the Association actively contribute to the improvement of quality of life in the communities where they carry out their activity, through projects with social, cultural or educational impact, whose annual average value is EUR 3.5 million. Social projects include rehabilitation of schools, kindergartens, hospitals, campaigns for the promotion of education by reducing school dropout rates. Through these projects, companies want to meet the needs of local communities. In the same period, ROPEPCA members maintained 14,000 specialized jobs and contributed to the state budget with over EUR 11 billion. This contribution to the state budget can be translated in the construction of 600 km of motorway or 40 county hospitals and 2,000 medium-sized schools. Given the strategic importance of the onshore sector, the Association plans to increase the degree of awareness among citizens on the industry and its contribution for the economy and society. It also wants a constant and constructive dialogue with all decision-makers in the public and private sector, so as to make available its own expertise, in order to develop together projects that can bring 44

benefits to society. Such projects are the one for the amendment of the Petroleum Law, in the sense of unlocking petroleum operations, or the impact study of GEO 114/2018, carried out by Deloitte at ROPEPCA’s request, showing the effects of the ordinance on the sector. The decision-makers have been informed on these projects, the Association committing to an apolitical dialogue, in order to improve the operating environment for oil and gas producers in Romania.

The workforce issue within the sector The labour force in general is in continuous change and evolution, given the automation of processes in almost all sectors of activity. As regards the petroleum industry, the impact of changes in the labour market is even more significant. Saniya Melnicenco refers to the study carried out in 2016 by McKinsey Global Institute. According to this study, over 14% of the representatives of the ‘millennials’ generation don’t want to work in the petroleum industry. This rate is the highest among all industries considered by the study, the main reason being the young people’s perception of the industry. “Thus, we will have to change their views of the industry and prove that it can provide a modern, dynamic, socially responsible and environmentfriendly career. Companies will have to provide professionals in the industry with the opportunity to stand out and actively contribute to the sustainable development of society, even behind the desk. Thus, in the context of the increasingly accentuated discussions on environmental protection, transition to an environmentally sustainable society must be capitalized, including in the labour market. Natural gas, the least polluting conventional energy resource, is the basis for sustainable developments from an energy point of view in the coming years, and considerable investment in energy-efficient technologies is needed

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to capitalize on it. Such investment, according to the mentioned study, has the potential to generate, at global level, up to 10 million new direct jobs in the industry and other up to 10 million jobs in the related sectors,” Saniya Melnicenco shows. The industry, including that in Romania, has faced a period of reduction of the qualified staff, due to decrease in oil prices in 2014 (‘The Great Crew Change’). “Further, we will have to find the best measures to retain specialists in the industry in Romanian projects, and this goal cannot be achieved, unless investment is boosted through an adequate regulatory framework. Decision-makers could take advantage of the productivity benefits of this energy revolution, by integrating technological changes and allowing the free trade of the energy mix. Regarding producers, they should have the opportunity to participate in a fully liberalized gas market, allowed to mature, for prices to become balanced and to boost investment in order to increase production. Strategic storage of resources when prices are low can be a solution for importers, to protect against supply challenges or price increases,” Saniya Melnicenco points out. There are solutions, but they all have to be implemented through a positive law-making, with a medium and longterm vision regarding the energy sector and all its components. For this purpose, ROPEPCA supports the need for constant dialogue between industry and lawmakers, aimed to address technological and social problems raised by transition to a sustainable development.

NAMR’s 11th Round ROPEPCA President says the 11th licensing round for exploration blocks is a window of opportunity for the economic development of Romania, by attracting investments. Without the proper measures, Romania risks remaining uncompetitive and unattractive as compared to other countries in the region. Several aspects should be considered

when investments are made in the petroleum industry, from both a national and global perspective. When it comes to political and regulatory stability, there is definitely a need for improvement in Romania, especially because over the past few years several decisions with adverse effects on the industry have been made. The success of this round depends to a great extent on taking measures to boost exploration and development of new fields: modernization of the Petroleum Law, clear regulation of land access, cutting red tape and optimization of permitting processes. “Challenges faced by an investor in Romania in our industry are related to the three components of the exploration strategy: accessibility of geological data, application of technologies and allocation of capital. The regime of classified data puts projects in Romania in the disadvantaged situation of underfinancing and isolation from the globalized and digitally connected world. Also, bringing performing technologies is closely related to the existence of qualified and experienced staff in the field, involving a significant financial effort. The allocation of capital to certain projects pursues a favourable legislative and fiscal framework, as well as a reasonable return on investment, provided only through the mechanisms of a functioning market economy. Without these measures, Romania will remain uncompetitive in terms of investment attractiveness compared to other countries in the region, such as Hungary, Croatia or Poland, which despite the lower geological potential manage to successfully complete licensing rounds for exploration blocks. This spring, Ukraine managed to organize a licensing round for the award of onshore and offshore blocks that had a significant success and attracted powerful and responsible companies. As I said, the solution is represented by decisional transparency, legislative stability, efficiency of the regulator and awareness of importance of this industry as a strategic component of the national economy,” Saniya Melnicenco concludes. 45

Harmonization of stakeholders’ interests benefits for economy, investors, population ROPEPCA believes that the stateproducer-consumer relationship can be represented by an equilateral triangle. The state must build public taxation policies so that it meets the need to protect consumers, the need of the public budget to achieve satisfying revenues for the state, as well as the needs of producers operating in Romania to be encouraged to continue operations in this market, to invest in new and performing technologies, to create jobs, to make revenues and profit and thus be able to continue ensuring energy supply to the country. The development of the petroleum exploration and production sector in Romania can be done only by collaboration between the public and the private environment, always considering consumers’ interests and sustainable development of society. In the context of changing the perception at global level on the environmental factor, the petroleum industry is in continuous change and evolution. Thus, the Association is open to dialogue with the decision-makers to materialize public policies truly addressing consumers’ needs, for the responsible development of the industry by caring for employees and consumers. ROPEPCA wants to improve general perception of the industry and generate dialogue not only with authorities, but with society as a whole to raise awareness of the importance of the energy sector for economic growth and benefits for society. The Association proposes a transparent and constructive approach in dialogue with public and private stakeholders, in which it can use its own expertise to develop projects that can benefit society in general and build on the conclusions of impact studies in a timely manner. Through active participation, ROPEPCA aims to get involved in drafting laws that create the best medium-term and long-term framework for the industry to work and open up opportunities for new investment.

ENVIRONMENT

Decarbonisation The Challenges of the Great Transition

Since the 70s, the world has experienced soaring growth in its energy demands, mainly fed by fossil fuels and centralized power generation. The future, however, should and seems to be expected as different. Transformations of any kind do not appear from a vacuum; especially when we speak about energy transformation and even more specifically in such a crucial sector like that of Energy. Transformation is shaped by a much broader and fundamental shift in terms of prosperity, progress, politics, and the environment. We see signs of that shift even in the terminology, shifting from ‘green’ to ‘smart and sustainable’. We call this wider and fundamental shift in context ‘The Great Transition’. One of the cornerstones of this huge transition is ‘decarbonisation’. This ongoing transformation does not only concern and apply the energy sector, or a switch from one fuel source to another, or merely the technological leap. It is much broader and reflects a shift, a transformation, in terms of values and also the way we understand the world around us nowadays.

Text by Evgenios Zogopoulos

s mentioned, we observe a gradual breakaway from the older core values of security, reliability, and robustness which existing energy systems were built on, to new values of sustainability, flexibility, and affordability, enabled by a completely new way of producing, delivering, and consuming energy. This does not

necessarily mean that the older frame of values will become obsolete or irrelevant anytime soon, but the centre of weight is definitely being rebalanced.

Decarbonisation: The notion The notion of decarbonisation translates in a few words as the reduction of carbon inputs to socioeconomic 48

metabolism or of greenhouse gas (GHG) emissions such as CO2 or CH4. Indicators such as GHG emissions per unit of technical energy, are widely used in climate-related discourses. They are often expressed as kilogram CO2 equivalent per year. Different GHGs are converted into CO2 equivalents according to their respective global warming potentials.

ENVIRONMENT

Partial decarbonisation can be achieved by increasing the share of low-GHG fuels such as hydropower or solar in total energy supply. In theory, it is possible to reduce net carbon emissions to zero or even achieve net negative emissions if technologies such as bioenergy with carbon capture and sequestration are used on a large scale. However, on the input side, socioeconomic metabolism cannot be entirely decarbonised because biomass is indispensable for socioeconomic metabolism, at least as food and feed, and the carbon content of dry matter biomass amounts to 45–50%. Therefore, we are facing a dual challenge: that of the emissions coming from the energy sector but also other sectors like agriculture (dairy, meat etc.)

Decarbonisation: The process Lowering industrial GHG emissions is a very realistic task, but not an easy one. A report coming from the leader in the Consulting world, McKinsey, is revealing. The report called ‘Decarbonization of industrial sectors: The next frontier’, finds that elements like ammonia, cement, ethylene, and steel companies can reduce their carbon-dioxide (CO2) emissions to almost zero with energy-efficiency improvements, the electric production of heat, the use of hydrogen and biomass as feedstock or fuel, and carbon capture. Discussion about transitions and transformation is never easy and the financial aspect always frames the discussion; cash is King Afterall. The decarbonisation of the above-mentioned sectors would cost between USD 11 trillion and USD 21 trillion all the way until 2050 and will require accelerating the extension and deployment of renewable-energy capabilities, to provide four to nine times as much clean power as industry would need in the absence of any effort to reduce emissions. Despite the challenges described above, companies in the four focus sectors could bring their CO2 emissions close to

zero with a combination of approaches. The most promising are: • Energy-efficiency improvements; • The electrification of heat; • The use of hydrogen made with zero-carbon electricity as a feedstock or fuel; • The use of biomass as a feedstock or fuel; • And carbon capture and storage (CCS) or usage (CCU). The optimum mix of decarbonisation options would be apparently variable and different combinations could be used to address the needs and potential specificities. The same principle could apply even within the same sector, because local factors determine which ones are most practical or economical. Decision makers must evaluate their options on a site-specific basis by closely examining these factors. The most important factors are the availability and cost of low-carbon energy

sources—specifically, zero-carbon renewable electricity and sustainably produced biomass. Access to storage capacity for captured CO2, along with public and regulatory support for carbon storage, will affect the possibility of implementing CCS. The regional-growth outlook for the four focus sectors matters, too, because certain decarbonisation options are cost effective for existing (brownfield) industrial facilities while others are more economical for newly built (greenfield) facilities. Industrial companies must prepare for decarbonisation by conducting a detailed review of all their capacities, resources, facilities and by looking at the availability of low-cost electricity, hydrogen, biomass, and carbon-storage capacity. This process should have a primary goal of hitting maximum efficiency. Achieving the dual transformation of the energy and industrial sectors will require coordinated efforts across the economy.

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Other key players and stakeholders should be brought into the mix for finding opportunities for collaboration: co-investing in a shared carbon-storage infrastructure, for example, or supporting research and development for promising decarbonisation technologies. The public sector would be a great example, due to its nature and of course, bringing its regulatory capacity into the game. Governments can develop road maps for industrial decarbonisation on the local and regional levels to create a more certain outlook for industrial and power companies and unlock investments with flexible and longer payback times. Governments can also adjust regulations and incentives to support decarbonisationâ&#x20AC;&#x201D;for example, encouraging investment in renewablegeneration capacity by altering the financial requirements on utilities and other companies involved in generating and distributing energy. Energy leaders from around the world including national and regional policymakers have a critical role to play in driving forward

the development of a coordinated Action Plan to better realize opportunities for aligning decarbonisation of energy supply with existing infrastructure that may need to be appropriately dealt with. In Europe, besides national governments, European policymakers will have a key role for energy infrastructure plan to ensure coherence for all the countries. All in all, industrial companies can drastically lower their carbon emissions, but only by collaborating with other stakeholders and the public sector. Joint planning and timely action can accelerate the development of lowcarbon technologies for industry and help to coordinate the dual transformation of the energy and industrial sectors. For industrial companies and other organizations, the time to begin the transition is now.

Decarbonisation: Going Deeper One of the apparent conclusions, deeply connected with the notion of maximum efficiency, is that there can 50

be no waste of resources. This clearly indicates the direction of reusing or repurposing the already existing infrastructure. The transition will heavily depend on infrastructure that is adaptable, reliable and affordable. Going further, we need to consider that the existing energy infrastructure has been built around conventional resources over many decades with trillions of dollars in investment. It will be a missed opportunity to not plan for the role of existing infrastructure in future energy systems. The need is clear and the opportunities lies ahead: use of existing infrastructure is a resource for more affordable transition to decarbonisation. According to leaders and key decision makers within the energy sector, all around the world, it is concluded that one of the obstacles to a successful energy transition is exactly the efficient repurposing of the existing resources. Furthermore, a factor would be that of asset decommissioning and the stranded assets. What is more alarming, is that despite its significance, existing infrastructure has become

ENVIRONMENT

Decarbonization of industry through a “menu” of options that together lead to substantial CO2 emission reduction

H Demand-side measures Lower the demand for primary resources by increasing circularity (reuse, recycling, or replacement of products)

Energy efficiency

Electrification of heat

Adapt production equipment to lower energy use per produced volume

Replace fossil fuel for heating with renewable electricity, e.g., in ethylene production

Hydrogen as fuel or feedstock Replace feedstock or fuel with carbon neutral hydrogen, e.g., in ammonia production

CO2 Biomass as fuel or feedstock Replace feedstock or fuel with sustainably produced biomass to reduce CO2 emissions, e.g., use biobased feedstock in chemicals production

CCS/CCU

Other innovation

▪

Capture the CO2 emitted and store (CCS) or use (CCU)

▪

Innovative processes, e.g., electrochemical production process Non-fossil fuel feedstock change, e.g., change in cement feedstock

Source: Decarbonization of industrial sectors: the next frontier

an undiscussable challenge and is insufficiently planned for: dealing with existing infrastructure is an afterthought to decarbonising the supply of energy. Arguably, it can be said with a fair amount of certainty that: • An integral part of the opportunity is the consideration of infrastructure repurposing opportunities where these make sense; • The extent to which assets are stranded. This is currently a variable and unknown factor which presents us with a potential risk of decarbonisation becoming cost-prohibitive if large portions of existing infrastructure are stranded.

Decarbonisation: ‘The Great Transition’ Projects Dealing effectively with existing infrastructure, whilst not inevitable, is not impossible. We have excellent cases of joint integral project showcasing how the Great Transition should and could be performed. NextStep: A joint initiative of EBN and the Dutch oil and gas industry, is the only holistic action plan developed in the world to date to deal with existing infrastructure. The National Platform for Re-use & Decommission and the Dutch oil and gas industry, represented by NOGEPA act with the clear ambition to contribute to the safe and environmentally friendly re-use and decommissioning of oil and gas 51

infrastructure in Holland. NexStep plans to stimulate and facilitate the Dutch agenda for re-use and decommissioning of oil and gas infrastructure with the aim to: • Have zero safety incidents; • Create minimum environmental impact; • Realize cost reductions through efficiency. Due to the foreseen, and not only, decline of hydrocarbon production in the future, the oil and gas infrastructure should be repurposed for other uses. The energy transition presents a tremendous opportunity to re-use existing elements to complement renewable investments before the eventual safe and efficient decommissioning. As

ENVIRONMENT

Innovation is required to ensure the full menu of decarbonization options is available

Technological maturity Options

Research

Development

Basic research

Applied research

Pilots

Adoption

Scale-up

Demand-side measures Energy efficiency Electrification of heat H

Hydrogen as fuel or feedstock

Biomass as fuel or feedstock Other innovation

CCS/CCU

CO2

Market uptake

Policy mechanisms Push vs. pull

Subsidies and information programs Taxes and direct regulation

Input vs. output focused

Innovation competitions

Capex subsidies

Focus on emission cuts

Source: Decarbonization of industrial sectors: the next frontier

the great champion and the face of reuse and decommissioning of oil and gas infrastructure in the Netherlands, the joint venture aims to engage stakeholders and the general public about their work. They plan based on a dedicated innovative agenda which will identify new challenges and promote technology development where it is needed. NexStep will also encourage industry collaboration, and exactly the cooperation formula that we talked about earlier, sharing of lessons learned and engagement with international partner organizations involved in the coordination of re-use and decommissioning of oil and gas infrastructure. California’s Action Plan: Although

not directly dealing with infrastructure, offers an effective model of how to bring an industry together under a common vision. In their ‘Roadmap to Decarbonize California’s Buildings’ today, a coalition of key players and stakeholders from the public and private sector lays out a plan for the state to cut building emissions by more than 20% within the next decade and by 40% by 2030. Another aligned goal is to adopt zero-emission building codes for residential and commercial buildings by 2025 and 2027, respectively. “Reducing the environmental impact of homes and buildings is both an environmental imperative and an economic opportunity,” said Lauren Faber O’Connor, chief sustainability 52

officer for the City of Los Angeles. “This roadmap shows that together, we can cut energy consumption and reduce costs at the same time—showing the world that going green is good for your health and bottom line.” The Roadmap, developed by a coalition of public sector and private stakeholders, addresses a range of market and policy barriers preventing mass adoption of zero-emission appliances. “As the electricity sector becomes cleaner, we need a range of tools and programs providing customers more choices for cleaner, safer electric technologies, including heat pump water and space heaters,” said Jill Anderson, vice president customer programs and services, Southern California Edison.

ENVIRONMENT

“The Building Decarbonization Coalition’s Roadmap is a visionary vehicle addressing one part of the overall economy-wide set of actions needed to meet California’s ambitious climate goals while maintaining affordability for customers.” The Roadmap also lays out a plan to ensure an equitable approach and support vulnerable communities already struggling against skyrocketing housing costs and stagnating wages are protected as California moves toward zeroemission technologies. To achieve this, the Roadmap calls for low-cost, easily accessible financing options, re-aligning existing programs to help communities achieve carbon-free homes and implementing measures such as bulk purchasing, subsidizing installations and contractor training. DDPP: A global collaboration of energy research teams charting practical pathways to deeply reducing greenhouse gas emissions in their own countries. They are indeed on a huge task and aiming to achieve what is needed to limit global warming to 2°C or less. The DDPP is a collaborative initiative to understand by showcasing how countries can transition to a low-carbon economy by mid-century and how the globe can reach the internationally agreed target of limiting the increase in global mean surface temperature to well below 2 degrees Celsius (°C). The project also organizes low-carbon technology roundtables to contribute to the mobilization of a global public and private Research, Development, Demonstration and Diffusion (RDD&D) effort to drive directed technical change. The DDPP framework has been developed and utilized by a consortium led by The Institute for Sustainable Development and International Relations (IDDRI) and the Sustainable Development Solutions Network (SDSN). It currently consists of scientific research teams from leading research institutions in sixteen of the world’s largest greenhouse gas

emitting countries. More specifically, the 16 Country Research Teams composed of leading researchers and research institutions are from countries representing over 70% of global GHG emissions and different stages of development: Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the UK, and the USA. The DDPP will support interested countries in developing mid-century “low greenhouse gas emission development strategies mindful for 2°C and 1.5°C” as called for in the Paris Agreement on climate change.

The Scenarios for the Future Approximately a century ago, in April 1896, Svante Arrhenius published an article, ‘On the Influence of Carbonic Acid in the Air upon the Temperature of the Ground’. It was actually the first comprehensive study to analyse the ‘greenhouse effect’ and to assess the harmful impact of elevated concentrations of CO2 (carbonic acid in the terminology of Arrhenius) in the environment. He quantified the CO2 emissions quoting estimates of his colleague, Professor Hogborn, indicating consumption of some half a billion tons of coal worldwide (and assessed them to equal the carbon uptake by weathering of rocks). The greenhouse effect and the potential of anthropogenic interference of CO2 emissions from burning of fossil fuels have been actually known and studied by science for 100 years. The study presented the calculations parametrically for a range of CO2 concentration levels from 200 to 900 ppmv (parts per million by volume), compared to the then estimated prevailing level of about 300 ppmv. And 100 years later, CO2 concentrations have reached 360 ppmv and numerous scenarios exist that attempt to project emission levels far out into the future. The most significant finding for 53

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Source: DECARBONIZING THE GLOBAL ENERGY SYSTEM Arnulf Griibler Nebojsa Nakicenovic International Institute for Applied Systems Analysis Laxenburg, Austria

these scenarios is that after the middle of the 21st century carbon intensities stay constant for all of the six scenarios developed. This represents in our viewpoint a certain lack in scenario richness, especially in view of the stated purpose to explore a wide range of future possible developments through the scenario exercise. There, only one scenario portrays a similar picture of stagnating improvements in decarbonization as depicted by the IPCC scenarios. The IS92 scenario assumptions of driving forces in the domain of energy technologies and resource availability appear restricted, especially when compared with the wide variation in input assumptions like population and economic growth.

Decarbonisation: ‘The Great Transition’ The global energy system is indeed gradually decarbonizing, as measured by the reduction in the specific carbon emissions per unit of primary energy consumed. This trend appears continuous and persistent. Should these historical trends continue, we might in fact be only halfway through the fossil fuel age that would draw to a close only late in the

22nd century. The driving forces of decarbonisation include both continued technological change in all domains of energy production, conversion, and end use as well as the quest for higher flexibility, convenience, and cleanliness of energy services demanded by consumers, especially as incomes rise. To an extent the energy sector ‘compensates’ some of the more pronounced decarbonisation trends in energy end use, reflecting resource endowments, technology availability, geopolitical considerations, as well as policy influence. This gives reason to be cautiously optimistic that development and the resulting economic growth, increased energy needs, and emissions could be reconciled with a precautionary policy of avoiding large-scale human interference with the climate system. The task of controlling energy-related carbon emissions, as daunting as it may appear from today’s perspective, may in fact turn out to be less obstructive if indeed an acceleration of long-term structural change trends is called for rather than departure in an entirely new direction. Conversely, it will simply not suffice to rely on ‘autonomous’ structural change toward carbon-freer energy systems, especially considering the slow 54

historical rates of decarbonisation of 0.30Jo per year. They are dwarfed by historical an anticipated future growth rates in energy use and resulting carbon emissions. Substantial acceleration of decarbonisation would thus entail both ambitious technological and policy changes. Whereas such changes are inherently difficult to anticipate, it is also a matter of fact that historically it was precisely structural changes that enabled us to improve quality and quantity of energy services. Such structural changes are rarely represented in studies of energy-environment interactions. This suggests that decarbonisation and its driving forces may still be insufficiently captured in most models and scenarios of the long-term evolution of the energy system. Any Great Transition is always subject to uncertainty, obscurity but also hope for ‘tomorrow’; there is currently a continuous torrent of initiatives, formulating into a river of change. This is exactly the type of change that our species needs, even if it is not the mainstream attitude for the time being. As always, a few will lead the way and we must remember: “Those crazy enough to think they can change the world, are the ones they do”.

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Premiere in Romania Hydrogen Bus in Bucharest The use of conventional fuels is a taboo topic in Europe, with many cities announcing that cars with diesel engines would have a difficult life from now on. All in the name of combating greenhouse gas emissions and, naturally, public transport could not be avoided by these drastic measures either. Thus, perhaps as a preamble for the period to come, the citizens of Bucharest have had the chance to see a hydrogen-powered bus on the streets of the capital.

Text by Daniel Lazar

elgiumâ&#x20AC;&#x2122;s Van Hool has presented a hydrogen vehicle during the highlevel Set-Plan & ENVE Joint Conference, having as topic â&#x20AC;&#x2DC;Making the energy transition happen locallyâ&#x20AC;&#x2122;, which was organized by the European Commission with the Romanian Municipalities Association, the European Committee of the Regions and the Ministry of Energy, at the Polytechnic University of Bucharest. The SET Plan 2019 Conference (European Strategic Energy Technology Plan) and the ENVE Commission

Meeting (Commission for the Environment, Climate Change and Energy) within the European Committee of the Regions were attended by over 600 local and regional elected leaders, presidents of regions, mayors within the 28 Member States of the European Union, government members, researchers, as well as representatives of companies active in the energy sector. The bus that was presented in Bucharest uses a recently developed technology, based on fuel cells powered by hydrogen and batteries. In this hybrid architecture, the fuel cell provides all 56

energy for the vehicle to work, while the batteries ensure peak power for the engines to cope with rapid acceleration. The refuelling of such a bus lasts about 7 minutes today for the regular filling of the tank. But soon the technology needed to get a full tank in less than 5 minutes will be available. Since the fuel cell only generates water emissions, these buses do not pollute the atmosphere. Such passenger vehicles are already used in several major cities in Europe such as London, Amsterdam, Hamburg, Cologne, Frankfurt, Rotterdam or Milan.

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make different initiatives converge in a consistent way,” he added. Hydrogen can be used directly in combustion processes in the same way as gasoline or natural gas. However, fuel cells represent the most promising technology for using hydrogen for power generation in a wide range of energy end-use applications. Hydrogen can be obtained from many primary energy sources by appropriately treating fossil or bio-fuels, or by electrolysis of water using electricity generated by renewable energy sources, such as solar, wind, wave or tidal power. Hydrogen can therefore bridge the transition from a fossil-based energy economy to one based more on renewable energy sources. Today hydrogen technologies are still expensive. No distribution infrastructure, similar to the one for fossil fuels, is in place. Hydrogen is routinely used today for many industrial processes. The use of hydrogen as a fuel has, until now, mainly focused on aerospace applications (i.e. rockets). But fuel cell electric vehicles, along with heat and power systems, are now being developed. Large-scale power plants are the next step. Hydrogenpropelled aircraft, trains and ships can be envisaged in the future.

PREDICTIVE MAINTENANCE

Hydrogen and fuel cells are seen by many as key solutions for the 21st century, enabling clean efficient production of power and heat from a range of primary energy sources. The High-Level Group for Hydrogen and Fuel Cells Technologies was initiated in October 2002 by the Vice President of the European Commission, Loyola de Palacio, Commissioner for Energy and Transport, and Philippe Busquin, Commissioner for Research. The group was invited to formulate a collective vision on the contribution that hydrogen and fuel cells could make to the realisation of sustainable energy systems in future. “Hydrogen marks a revolution in how energy can be produced and stored,” said Commissioner Busquin. “Up until now in the ‘fossil fuel civilisation’, we have been trying to strike a balance between the need to foster economic growth and at the same time to ensure this has a minimum impact on the environment. With an extensive use of hydrogen as an energy carrier, this conflict will be resolved. But Member States and industry cannot bring about this revolution on their own: efforts are scattered, resources are dispersed, and costs are extremely high. We need a major effort at EU level to streamline and

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Background

CONSTRUCTION

Production in Construction in Euro Area and EU28 In May 2019 compared with April 2019, seasonally adjusted production in the construction sector decreased by 0.3% in both the euro area (EA19) and the EU28, according to first estimates from Eurostat, the statistical office of the European Union. In April 2019, production in construction decreased by 1.7% in the euro area and by 1.3% in the EU28. In May 2019 compared with May 2018, production in construction increased by 2.0% in the euro area and by 2.5% in the EU28.

Monthly comparison by construction sector and by Member State In the euro area in May 2019, compared with April 2019, civil engineering fell by 0.8% and building construction by 0.3%. In the EU28, civil engineering fell by 0.5% and building construction by 0.2%. Among Member States for which data are available, the largest decreases in production in construction were recorded in Romania (-7.6%), Finland (-3.1%) and Sweden (-2.9%). The highest increases were observed in Slovenia (+4.1%), France (+1.9%) and the Netherlands (+1.4%).

Annual comparison by construction sector and by Member State In the euro area in May 2019, compared with May 2018, civil engineering increased by 2.3% and building construction by 2.0%.

In the EU28, civil engineering rose by 4.7% and building construction by 2.0%. Among Member States for which data are available, the highest increases in production in construction were observed in Hungary (+26.2%), Romania (+23.8%) and Slovenia (+11.1%). Decreases were recorded in Finland (-1.6%) and Belgium (-1.5%). The index of production in construction approximates the evolution of the volume of production within the sector, broken down into building construction and civil engineering. Seasonally adjusted euro area and EU series are calculated by aggregating the seasonally adjusted national data. Eurostat carries out the seasonal adjustment of the data for those countries that do not adjust their data for seasonal effects. The monthly index as presented above is calculated only on the basis of the data of those countries reporting. 58

Industrial production in euro area and EU28 In May 2019 compared with April 2019, seasonally adjusted industrial production rose by 0.9% in the euro area (EA19) and by 0.8% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In April 2019, industrial production fell by 0.4% in the euro area and by 0.6% in the EU28. In May 2019 compared with May 2018, industrial production decreased by 0.5% in the euro area and increased by 0.4% in the EU28.

Monthly comparison by main industrial grouping and by Member State In the euro area in May 2019, compared with April 2019, production of non-durable consumer goods rose by 2.7%, durable consumer goods by 2.3%, capital goods by 1.3% and energy by

CONSTRUCTION

0.7%, while production of intermediate goods fell by 0.2%. In the EU28, production of capital goods rose by 1.9%, durable consumer goods by 1.7%, non-durable consumer goods by 1.5% and energy by 1.3%, while production of intermediate goods fell by 0.1%. Among Member States for which data are available, the highest increases in industrial production were registered in Denmark (+4.4%), Ireland (+2.3%) and France (+2.1%). The largest decreases were observed in Finland (-2.9%), Romania (-1.9%) and Croatia (-1.7%).

Annual comparison by main industrial grouping and by Member State In the euro area in May 2019, compared with May 2018, production of intermediate goods fell by 2.6% and capital goods by 0.7%, while production of durable consumer goods rose by 0.4%, energy by 0.8% and non-durable consumer goods by 3.1%. In the EU28, production of nondurable consumer goods rose by 2.8%, energy by 1.7% and durable consumer goods by 1.2%, while production of capital goods fell by 0.1% and intermediate goods by 1.4%. Among Member States for which data are available, the largest decreases

in industrial production were registered in Malta (-5.1%), Germany (-4.3%) and Romania (-2.3%). The highest increases were observed in Denmark (+12.5%), Ireland (+8.2%) and Hungary (+6.1%). The index of industrial production measures the evolution of the volume of production for industry excluding construction, based on data adjusted for calendar and seasonal effects. Seasonally adjusted euro area and EU series are calculated by aggregating the seasonally adjusted national data. Eurostat carries out the seasonal adjustment of the data for those countries that do not adjust their data for seasonal effects.

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In accordance with NEx 01-06 requirements for installations and equipment operating in potentially explosive atmospheres - related documentation for submission to INSEMEX Petrosani and onsite examination of technical installations, aiming at the prevention of explosions; Design of signalling, alarm and fire alarm systems and installations; - Design of systems and installations for limiting and extinguishing fires; - Design of ventilation systems and installations for the disposal of smoke and hot gases, except those of natural-organized type, according to the authorizations: Series A No.: 7261, 7262,7263 of 31.07.2017, for an unlimited period, issued by IGSU - the National Centre for Fire Safety and Civil Protection, according to the legislation in force.

E.C.P.M.C. - Consult & Learning is recommended by INSEMEX Petrosani - the national authority in the field. Together with its experts is certified by INSEMEX with the Certificate no. GANEx.Q.2016. (01). 12.0026 and NVIV 01-06/2007, according to the Amendment no. 1/8947/22.09.2017. E.C.P.M.C. holds the economic operator code (NCAGE: 1GYEL) in accordance with the procedures of the NATO Coding System No. 2124 based on Government Decision no. 4445/2003 for the approval of ‘Rules on the organization and conduct of coding activity for defence equipment items.’

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EUR 4mn to Support ‘Romania Eficienta’ in Promotting Energy Efficiency O

MV Petrom, the largest player on the Romanian energy market, en dorses the Energy Policy Group (EPG) ‘Romania Eficienta’ program. OMV Petrom will contribute 4 million euro to this program in the period 20192022. The program aims to promote energy efficiency at the national level, through public information campaigns, education programs and financing of projects aimed at improving the energy efficiency of public buildings. “Every day, OMV Petrom provides energy for Romania. Our mission goes beyond that, as part of Romania we look to contribute to causes that are relevant to the country. We believe energy efficiency is one of these causes and ‘Romania Eficienta’ can enable more responsible consumption and therefore lower costs and reduced impact on environment. Energy efficiency measures can lead to a 40% reduction in consumption. It’s important to see this program move forward,” said Christina Verchere, CEO of OMV Petrom. “Over 80% of the buildings in Romania are built before 1989 and have a low energy performance with yearly consumption between 180 and 400

kWh per sqm. By extensive renovation, energy consumption can decrease below 100 kW per sqm, which can lead to significant savings. It is important for the public to become aware of energy waste and to have access to information on increasing the energy efficiency of buildings,” Radu Dudau, EPG Director, added. With adequate thermal insulation and by implementing efficient heating solutions, the energy consumption of a building can be reduced significantly. Replacing incandescent light bulbs with LEDs can reduce power consumption for lighting by up to four times. Within the ‘Romania Eficienta’ program, education and information campaigns will be organized. Thus, the general public and local authorities, who manage a large number of buildings of public interest, will have access to information on practical energy-saving solutions that reduce utility bills and environmental impact. In addition, a practical energy efficiency guide and energy efficiency trainings will be developed for public authorities’ representatives. Also, at a later stage, projects will be financed to increase the energy efficiency of public buildings through extensive renovation. 60

The National Regulatory Authority for Energy (ANRE), the Polytechnic University of Bucharest (UPB) and the Romanian Standards Association (ASRO) have joined this program. UPB will contribute by providing fundamental technical and engineering knowledge through studies conducted within the ‘Romania Eficienta’ project, as well as through educational and training programs. ASRO will develop energy performance standards for public buildings. ANRE, through the Energy Efficiency Department, will actively support the initiative by attending the relevant events, by disseminating and promoting the information and results of this initiative in meetings organized by ANRE, as well as in the informative materials produced by the Energy Efficiency Department. Energy efficiency is part of OMV Petrom’s sustainability strategy and supports the sustainable development goal – ‘Affordable and clean energy - SDG 7’ set by the United Nations. The United Nations’s Sustainable Development Goals (SDGs) is the agenda agreed globally for sustainable development and addresses key areas such as education, climate change, reducing poverty.

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A Future-oriented Industrial Policy Siemens’ Position for a Stronger Europe

Europe has much to offer. But it’s falling behind international competition. The new legislative term is an opportunity for change. President and CEO of Siemens AG Joe Kaeser calls for 5 actions to make Europe stronger.

“Europe is at a crossroads, and its newly elected political representatives face a variety of fundamental challenges. Leadership and determination are needed to maintain and strengthen Europe’s economic significance in the world. Industry and infrastructure remain Europe’s backbone for sustainable, inclusive growth and secure employment. The new and challenging dimension of global competition – which, more than ever, calls into question an international level playing field – makes it essential for a good European future that politicians and businesses stand up for multilateralism and reciprocity persistently, consistently, and with one voice. However, in order to prevent Europe from falling behind international competition, we now need a forward-looking, effective action program for Europe’s industry. The priorities of

such a program must be to ‘Preserve, Promote, Invest’ in five fields that are equally important for Europe”, says Joe Kaeser. 1. A sustainable program to drive the energy transition and to fight climate change. We need complete sector integration without delay as well as substantial investments in Powerto-X, storage and grid-edge technologies. This offers the industry completely new and affordable ways of reducing CO2 and thereby achieving the ambitious EU climate goals. New climate-friendly technologies create new jobs in Europe and promising new markets worldwide. 2. A leading position in future technologies in the digital age. This requires substantial investment – private as well as public – in technological fields such as industrial artificial intelligence, 62

cybersecurity, and critical infrastructure. Europe will only remain an attractive business location if it deploys future technologies mainly for industrial application. 3. Greater competitiveness for its companies by creating an appropriate legal framework. This includes modernizing European competition law and adapting state aid rules, especially to ensure that future technologies are rapidly implemented in day-to-day business practice and application. Full account must be taken of market conditions and dynamics and of the massive changes in framework conditions resulting from digitalization. 4. Coordinated and determined external economic policy and diplomacy that actively promote European business. The aim must be

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to promote a level playing field for international competition. At the same time, European companies need their interests to be proactively represented by EU institutions in their export efforts. Only if Europe, as a strong global player, supports its companies with one voice can disadvantages resulting from rapidly increasing geopolitical and geo-economic interventions be contained. 5. A Europe-wide education campaign for its citizens and workforce to fill the challenging gap in new skills that people need to shape the digital and highly interconnected world. European Member States need a joint master plan for education and dual vocational training. Future technologies must be practiced and learned in a comprehensive way. State-aid rules should be adapted, and investment incentives should be created with a specific focus on education and training activities. This action program for the European industry will make a significant contribution to a stronger Europe. Through it, we must work together to shape Europe’s future in a world where digitalization and globalization are changing the business environment in unprecedented ways. Siemens is committed to this goal and will actively contribute toward achieving it.

How can the energy transformation succeed and become an industrial policy opportunity for Europe? Renewable energies are the fastest growing energy source. An essential prerequisite for achieving our climate targets is their efficient integration into the overall economy – in the field of mobility, but also for buildings and industry. For this integration to succeed, all industrial sectors must develop solutions in close collaboration with the energy sector. A smart regulatory framework is required to bring about enough investments in Power-to-X and storage technologies and in technologies harnessing the full flexibility potential at the edge of buildings, factories and the grid. This will unleash the full potential for sector integration and offer entirely new CO2abatement instruments in the sectors while lowering the costs associated with achieving EU climate neutrality by 2050. The European Commission should therefore focus on the following measures: • A European strategy for Power-to-X with a key focus on enabling hydrogen demand by lifting regulatory barriers to sector integration; improving the hydrogen capability of the gas infrastructure as well as coupling it with the electric power infrastructure; and harnessing Europe’s best wind and solar conditions to meet its decarbonization targets. • Bold leadership in implementing the Clean Energy Package is crucial to driving sector integration at the nexus of buildings, factories and the grid to increase system efficiency. The Commission should monitor and provide guidance on the adopted regulations and set up a platform that tracks the progress of swift implementation, with a possibility for industry to provide feedback. We also recommend that the Commission

“Digitalization and globalization are determining our actions today. At the same time, they define the basic conditions in which people around the world operate: how they live, work, communicate, and do business. Digital skills are therefore vital for the future.” Joe Kaeser, President and CEO of Siemens AG

comment on national climate and energy plans proactively so that they highlight the shortcomings of the tax and energytaxation systems and make suggestions for improvement. • Europe must lead the way in shifting to more sustainable modes of transportation while simultaneously increasing its efforts to foster decarbonization for all modes of transport. In this regard, infrastructure investments are needed to spur the adoption of such technologies (including electric roads, electric charging stations, and hydrogen). In addition, e-fuels are needed to meet the energy needs of emission-free transportation 63

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and facilitate a more immediate decarbonization of the large, currently existing fleet, which still relies heavily on combustion engines. Last, an ambitious program must be launched that promotes a more extensive use of rail technologies while fostering further innovations that help maintain Europe’s leading position in the field of mobility.

How can we drive massive investments in future technologies? Competition to become an innovation leader is increasing dramatically around the world. This includes disruptive technologies, support for industrial scaling, and competition for the brightest minds. Innovative new models for development, production, and sales are key to a successful internal market. They are a core factor in strengthening the competitiveness of European industrial companies, and they must be promoted intensively and systematically. Companies should increasingly invest in innovations – particularly in production and automation – and bring them all the way to the point of market launch. The focus should be on strategic fields such as industrial artificial intelligence (AI), cybersecurity, and critical infrastructures. Europe lags far behind in the field of AI compared with the U.S. and China, both of which are investing significantly more. For comparison, private investments in 2016: EUR 17.9 billion by the U.S., EUR 8.9 billion by China, and only EUR 2.7 billion by Europe. The EU Commission is forecasting around EUR 7 billion for research and development in AI by the end of 2020 (public and private investments together) – thereby increasing its own investment by 70% until end of 2020; the Member States have also pledged to increase their investment in AI. If the private sector would increase its actual investment (EUR 2.7 billion in 2016) by 30-40% per year, this would lead to about EUR 15 billion in 2024. The European Commission should take the following steps to increase Europe’s position here:

• Appropriate incentives must be established throughout Europe, including giving tax credits for the cost of digital research, but even more for the deployment of new technologies on the shop floor and for professional training. • State-aid guidelines must allow for more flexibility in order to bring innovation in key strategic areas to an industrial scale. There is a need for faster and simpler access exemptions for temporary state support (i.e. faster and simpler than IPCEI) as well as national instruments, such as ‘Reallabore’ in Germany. • Massive support must also be given to the application of new technologies. European companies have fallen far behind the international field. For example, only 10% of all German companies currently use industrial AI applications. Cutting red tape must therefore become a strong focus of the new EU commission. Sandboxing can be a valuable tool for temporarily exempting new applications from existing regulations. It can be used, for example, to test new concepts, such as autonomous driving or digital twins for manufacturing in a safely delimited, regulation-free space.

What is important to include in a legal framework that promotes the development of new technologies for Europe’s future? A European legal framework should drive greater competitiveness for its companies globally by supporting open markets, but also stimulating European economic interests. To spur innovation, standards and regulations must follow a human-centric approach but give room for new requirements of digital applications and future technologies. Europe must create fair conditions for competition in order to succeed in all international markets. European companies are currently in competition with non-European businesses that receive significant financial support by respective states. This runs counter to fair competition at the global level. Until fair competitive conditions prevail 64

in all international markets, these aspects should be considered in the application and modernization of public procurement, state aid, and competition law. The European regulatory framework must be modernized comprehensively in order to take full account of market conditions and dynamics while simultaneously securing European consumer interests. • Europe must set clear rules for datadriven products and services. We need to create new or revised regulations that make new, disruptive technologies such as autonomous driving, digital industrial platforms, and artificial intelligence available to participating actors under the protection of legal assurances. In order to promote a data-driven European economy, Europe must develop clear rules that foster trust in the protection of people and assets as well as transparently define issues of data operation, access, and ownership. • To raise long-term quality, Europe must make the ‘best tenderer’ approach mandatory for the public procurement process. The Most Economically Advantageous Tender (MEAT) principle must be implemented effectively, because most tenders today are still awarded based on the lowest price alone. This shortcoming should be addressed by strictly mandating that projects cofinanced by the EU implement the MEAT principle. Measures must also be implemented more effectively for tenders with abnormally low-price levels. Fair, sustainable competition is especially essential in the field of public contracts. Qualitative criteria for evaluating contract awards must be included in assessments – such as for innovation, lifecycle costs, human and environmental standards, and price performance ratios, as well as research, cybersecurity, and job creation in Europe. Openness in public procurement cannot be a one-way street at Europe’s expense. • Europe must make the mergercontrol process simpler, shorter and more transparent. To this end, compulsory

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pre-notifications and forms must be abolished and the excessive requests for information drastically reduced. To improve mutual trust and control within the Directorate-General for Competition, the investigative and decision-making teams should be split up. Finally, when defining markets and assessing market power and restrictions of competition, it is necessary to take much greater account of global market dynamics. Today we still see a far too static approach based mainly on historical market data. For all these changes, it is crucial to strengthen the industrial know-how of the EU Commission.

What would an active European foreign trade policy look like? The success of European companies in the world’s markets is an indispensable prerequisite for ensuring Europe’s longlasting prosperity. Approximately 31 million jobs in Europe depend, directly or indirectly, on the EU and its Member States’ ability to trade. The core task of an external economic policy and diplomacy should therefore be to continue to work consistently toward a comprehensive EU-approach on trade and investment promotion conducted by EU Member States, and greater coordination by the European Commission with fresh look at business promotion in foreign markets. At the same time, it should represent European companies’ interests in securing market shares and orders, especially concerning the protection from practices that aim to exert geopolitical or geo-economic influence. To achieve this, Europe must take the three following steps: • Europe must lead the way with a new approach to value-based economic diplomacy. This means that the objectives of the Sustainable Development Goals (SDGs) must become the central foundation, both for joint projects between partner countries and for the European economy and politics. It should also include a future oriented incentive system for best-in-class companies.

Companies that make a significant contribution to the SDGs should increasingly benefit from active EU promotion for their projects. • Europe must make much greater use of its delegations and its excellent networks in pursuing key European business interests. Its main task should be to offer active political support for relevant European projects in third countries and to open access to policymakers. The European economy needs greater transparency on the market situation in third countries. There is also a need for comprehensive advice on ‘doing business’ and on the availability of European funding mechanisms. To this end, a joint one-stop shop of European Commission and the External Action Service should be created, political support from EU delegations ensured, and rapid access to development funds and financial instruments be made available. • Europe must clearly commit to sustainable, comprehensive, and rulebased infrastructure investments by taking concrete action. Initiatives such as the EU Asia Connectivity Strategy and the Africa-Europe Alliance for Sustainable Investment and Jobs require adequate financial support. This is also true for the advanced discussions on the International Procurement Instrument (IPI). The current situation makes it clear that the global public procurement market is worth approximately EUR 8 trillion annually. However, European companies only have contracts worth EUR 10 billion in third countries. A huge part of the global public procurement market remains closed to EU companies, and this is where action is required.

How can we prepare Europe for the digital age? Digitalization and globalization are determining our actions today. At the same time, they define the basic conditions in which people around the world operate: how they live, work, communicate, and do business. Digital skills are therefore vital for the future. 65

Europe needs to work with industry to help citizens and the workforce across Europe acquire the skills necessary for new technologies through a futureoriented educational framework based on lifelong learning. This educational framework must comprise the following elements: • European Member States need a joint master plan for education, dual vocational training, and training that meets the future demand for skills. Such educational programs must have the required curricula for training experts in data analytics, AI, and cybersecurity. This includes promoting the choice of science, technology, engineering, and math (STEM) starting in primary education. Furthermore, there must be adequate updates and new curricula must be developed in secondary and tertiary education that meet the demands of industry. This includes a continued focus on technical vocational education and training as an equal choice. • European Member States must ensure an education system that includes common standards and certifications. Given the fast pace of technological change, the education systems must support lifelong learning and further education as well as re- and upskilling – ideally supported by comparable micro or midi credentials. Standards and certification should also facilitate labour mobility across the EU. • Europe must increase collaboration and investments between the private and public sectors based on the existing allocation plans (Digital Europe Programme). State-aid rules should be adapted, and investment incentives should be created with a specific focus on education and training activities. In addition, it is a proven fact that workbased education pathways governed by public-private partnerships – such as apprenticeships – produce significantly better results in terms of employability, inclusion, and youth employment. Education systems should therefore be more open to collaboration with the private sector.

100 years of Kaeser Kompressoren A tradition of innovation The history of the Coburg compressed air specialist, Kaeser Kompressoren truly is a remarkable story. Although many a company celebrates its centenary, they cannot all boast such sustained and continuously positive development. A look behind the scenes.

aeser is active all over the world in its centenary year, 2019. However, the general public rarely comes face to face with the compressed air specialist’s products. Only the portable compressors catch the eye with their black and yellow livery and attractive design, when used for road construction work. Compressed air stations tend to be hidden away in outbuildings. Yet Kaeser compressors are just as likely to be found in power stations in Australia as in Peruvian gold mines, used by aerospace engineers in the US, fish farms in Norway, car manufacturers in Germany, at the CERN particle accelerator in Switzerland, on ski pistes in Austria, on Arabian oil fields or the weaving mills in Asia. Compressed air is just as vital as electricity. No company with an industrial production line can get by without compressed air. Today, Kaeser has a global presence. Its customers range

in size from craftsman’s establishments to large-scale industry. It all began in a small workshop in Coburg’s Hahnweg. The old buildings are still standing in which Carl Kaeser senior started producing spare parts and engines for cars, along with gear wheels and special machines for the glass industry, with a team of eight employees and two apprentices in June 1919. Business was booming. Within a few years, the company was to employ a 150-strong workforce. After World War II, virtually the entire customer base fell by the wayside as most were located in Thuringia and Saxony – and thus on the other side of the border. Taking advantage of the available automotive expertise, production was adapted without further ado to similar products: reciprocating compressors. Thus, began Kaeser’s successful focus on compressed air. In 1948, the first reciprocating compressor rolled off the Hahnweg production line as 66

the company continued to evolve. Further challenges emerged during the mid-1960s. In retrospect, it may perhaps be described as the first technological shift. Screw compressors came onto the market. Once again, Kaeser spearheaded the change with its very own invention: Sigma Profile was born. Developed inhouse, it is a rotary screw air-end with a special energy-efficient rotor profile that was ground-breaking at the time. Since then, Sigma Profile has been the centrepiece of every Kaeser rotary screw compressor; needless to say, it is also refined on an ongoing basis. Screw rotors are interconnected spirals with helical lobes. This innovative spirit pervades the company to this day, resulting in a steady stream of innovations in compressed air technology and applying equally to hardware, software and services. From the refrigeration dryer to revolutionary controllers (Sigma Air Manager 4.0),

Three generations of Kaeser: company founder Carl Kaeser senior, Carl Kaeser junior and Thomas Kaeser with his wife Tina-Maria Vlantoussi-Kaeser. Carl Kaeser senior, born 1886 in Geislingen / Steige, headed the company together with his son until his death in 1964. Dipl.-Ing. Carl Kaeser junior, born 1914 in Munich. Educated in Coburg, he entered the company in 1937 and, along with his son Thomas who joined in 1985, stood at the top until his death in 2009. Today’s board consists of Thomas and Tina-Maria Vlantoussi-Kaeser.

From its founding location in Hahnweg in Coburg, over the first buildings on Carl-Kaeser-Straße, to its current size (not completely visible in the picture), Kaeser Kompressoren has grown a lot.

from the portable compressor to completely new business models, where the customer basically only purchases the compressed air, through to digitalisation and Industrie 4.0, Kaeser still blazes a trail in the industry for the cost-effective, reliable, efficient generation and use of compressed air, thanks to its innovative, top-quality products and services. Most production facilities are located in Germany, with sales and service available in every corner of the globe. The company’s early international expansion was a vital aspect of its growth. The first branch opened in Switzerland in 1978, with Austria and France following hot on its heels. Today, Kaeser has more than 50 own subsidiaries and is represented by exclusive contract partners in over 100 countries. Kaeser Kompressoren employs in excess of 6,000

From the first reciprocating compressor to the reciprocating compressor range, the first screw compressor, to the modern master control system, Kaeser’s range of products and services has steadily grown thanks to constant innovation.

staff worldwide, many of whom have been loyal for decades. How was this achieved? The company’s secret recipe is an unwavering passion for innovation, sound engineering expertise, close customer contact and an awareness of their needs, combined with exceptional quality standards, a good dose of common sense and the main ingredients: excellent teams and strong family ties. However, family does not just refer to the owner family, Thomas Kaeser and Tina-Maria VlantoussiKaeser, now the third generation to manage the company, while the fourth has also just come on board, in the form of their son Alexander Jan Kaeser. All staff are considered family at Kaeser. This is evident in the high apprenticeship rate, well above average, and the extremely long service record of the employees, usually 67

more than 30 years. But it is also reflected in the company’s business development: for 100 years without fail, the operating result has been positive. Even in 2009, the year of the global crisis. From Anchorage to Auckland, Coburg or Kauai, Kaeser is a family-owned company with strong ties to Germany; it views the entire world as its home turf and offers ‘Made in Germany’ quality from start to finish. The next innovative chapter is just waiting to be written. KAESER KOMPRESSOREN S.R.L. Address: 179 Ion Mihalache Blvd., 011181 - Bucharest Tel.: +40 21 224 56 81 Fax: +40 21 224 56 02 Web: www.kaeser.com Email: info.romania@kaeser.com

POWER

Enel X Rolls out New Global Charging app JuicePass to Spread E-mobility Enel X is upgrading its e-mobility customers in Italy to JuicePass, the company’s new electric vehicle (EV) charging app, which is an evolution of the ‘X Recharge’ app. JuicePass will be the single interface for Enel X customers to charge at home and the office as well as to access a network of over 6,100 public charging points across 18 European countries, leveraging on the recently announced interoperability partnership with charging network operators IONITY and SMATRICS. JuicePass will also be available on app stores in Spain, Romania and the US.

POWER

“We are launching JuicePass today, whose name embodies the quintessence of the app: a single point of access, the ‘Pass’, for the entire Enel X network,” said Alberto Piglia, Head of e-Mobility at Enel X. “Through our app, charging becomes a seamless and fully-digital experience, as users can access stations, charge and pay, all through JuicePass. Looking ahead, we will continue to work on the improvement of customer experience, also through further digitalisation and integration of charging networks, which are key to speeding up the global development of electric mobility.” The new functionalities offered by JuicePass include: • RADAR: a daily push notification informing EV drivers when a new charging point is activated within a 100 km radius from a selected location; • RATING: customers can now rate their charging experience after ‘filling up’; • CHARGING SESSION PERFOR MANCE: customers can now monitor charging performance in real time with a detailed view of charging speed over the whole session. With JuicePass, Enel X allows its EVdriving customers to activate their profiles, reserve charging points, manage and pay for charging services. JuicePass will

constantly evolve in line with EV drivers’ needs and technological innovations in e-mobility, making it a truly futureproof app. The app will also expand its functionalities, embedding new ancillary services offered by Enel X and third parties to offer customers an integrated mobility experience through a single touchpoint. JuicePass will manage the entire existing and future portfolio of Enel X charging solutions such as JuiceBox, JuicePole and JuicePump covering customers’ charging needs for all types of use, from the home to the office, and across a broad public network. Enel X is working to broaden its European charging network to over 36,000 public points by 2022, with the aim to accelerate the uptake of EVs and the decarbonisation of the transport sector. Enel X is Enel’s global business line dedicated to developing innovative products and digital solutions in sectors in which energy is showing the greatest potential for transformation: cities, homes, industries and electric mobility. Enel X holds the leading position in demand response programmes globally, with over 6 GW of demand response capacity currently managed and assigned in the Americas, Europe, Asia and Oceania. 69

SP-700 Auto Cycle pump •

Smarter: energy wise gear design

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Quicker: 30% increase in tightening speed

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Safer: noise level only 78 decibels Atlas Copco Tools Romania atlascopco.com/ro-ro/itba

RENEWABLES

5,000 Miners from Jiu Valley Turned into â&#x20AC;&#x2DC;Wind Navigatorsâ&#x20AC;&#x2122; Vocational retraining has been gaining more and more ground in Romania lately. Given the acute lack of workforce in various sectors of activity, including in the energy sector, increasingly more institutions and companies invest in attracting and training future employees. Thus, on July 10, Energy Minister Anton Anton visited the Fantanele - Cogealac wind farm, operated by CEZ Romania Group. During his visit, the minister talked about launching the vocational retraining project for miners in Jiu Valley, through which 5,000 miners would be trained to become employees in wind energy production and electricity distribution. 70

RENEWABLES

pecifically, the project aims at creating an Academy (the Academy of Vocational Training and Retraining for Renewable Sources and Electricity Distribution), with training units in Tg. Jiu and Craiova. Basically, about 500 technicians will be trained in these centres annually, for 10 years. Added to these is also the training of 3,000 specialists in electricity distribution. The certification of miners within the Academy will allow them to work in the installation, operation and maintenance of renewable projects. “Energy transition established by Europe must take place at a pace that does not affect the energy security of the states or the life of those involved in coal-fired energy generation. We are responsible for the future of those who today depend on mining. Jiu Valley is one of the areas included in the Platform for Coal Regions in Transition and I believe the skills of

miners can be easily transferred to the renewable energy sector. The program will train them to an advanced level in the electrical, mechanical and hydraulic fields. This is perhaps one of the most extensive vocational retraining programs with immediate results: employment after graduation. The program is designed so that within 6 months of training any miner can work in one of the wind farms in Romania,” Energy Minister Anton Anton said. To establish the Academy, the Ministry of Energy, together with the Romanian Wind Energy Association (RWEA), Monsson Operations, Distributie Energie Oltenia (company within CEZ Romania Group) and the University of Petrosani signed a protocol of collaboration in May this year. “It is our ambition to create energy transition, to contribute to regaining trust in the security of jobs in areas affected by energy transition, through a vocational retraining project that can be replicated 71

at European level,” says Claudia Brandus, President of RWEA - Romanian Wind Energy Association. “The project proposes a rate of employment and integration in the industry of graduates of 100%,” SebastianPetre Enache, Business Development Manager Monsson Group, said. The project is considered for funding under the Modernization Fund, article d., joined by Romania together with other Member States.

Jiu Valley Project in brief • •

• •

Vocational training and retraining of the coal sector employees Transferable skills of the mining sector technicians towards renewable energy and energy distribution Providing job security within a short-term – restoring confidence A model that can be replicated in other European areas

RENEWABLES

• •

Part of the ambition to be energy transition creators Responds to the European challenges of energy transition - Structural unemployment – social deprivation & burden on public finances – no region must be left behind; among the highest number of jobs at risk by 2030 in EU (more than 15,000)

Developing a professional Academy in Jiu Valley Building on experience of the existing Renewable Energy & Electricity Distribution School of Skills (RESS) centre in Constanta: • Graduates work on projects abroad and return monthly to Romania, earning revenues far above the average of their regions of origin. • Training and retraining courses will allow mining sector technicians to be employed in the installation, operation and maintenance of RES projects and energy distribution networks. • During the project’s implementation period (10 years), the aim is to retrain up to 800 technicians in renewable energy and electricity distribution

annually, for a total of up to 8,000. Including approximately 3,000 miners in electricity distribution professionals. The main goals of the project are: Retraining the technical personnel in coal dependent regions in the field of renewable energy sources; Offering training stages and new jobs for up to 500 people annually; Help develop areas by implementing a long-term vocational training and retraining program; Using highly skilled personnel in the renewable energy sector; Getting actively involved in the life of communities where the company carries out its distribution activity; Creating new development opportunities for up to 300 professionals currently working in the mining sector to switch to maintenance and operation of medium, low and high voltage distribution networks in the Oltenia region (Dolj, Gorj, Mehedinti, Olt, Arges, Valcea and Teleorman). •

• •

• • • • • • •

Targeted results The main areas to be covered by the project are: Renewable Energy and Electricity Distribution. Renewable Energy Vocational and Industry Trainings – 500 new jobs/year • Training programs depending on the specialization – 1 month, 3 72

•

months and 6 months Advanced professional training in the electric, mechanic and hydraulic fields including GWO Multiple certifications for installing, operation, service and maintenance of wind turbines and PV parks Technical English courses and courses for inspector and operator of renewable energy sources • On-site qualifications and paid internships in the industry 500 new junior and senior wind technicians/year Electricity Distribution Vocational and Industry Trainings – 300 new jobs/year Course duration for achieving the goals - 1 month, 3 months and 6 months • Up to 300 participants per year, divided in series The electricity distribution curricula will include 30% theoretical training and 70% practical training Multiple certifications for construction and installation, exploitation, maintenance of DSO/TSO equipment ‘Train the trainer’ programs for the personnel ensuring theoretical and practical training

Organised by:

3rd Annual International Summit and Exhibition 7–8 November 2019, Belgrade, Serbia

300+ decision-makers of hydropower plants, investors, project initiators Among the participants 2018: Andrei Petrișor Maioreanu,

Bogdan-Nicolae Badea,

Zeljko Kovacevic,

State Secretary,

President of Management Board,

General Director,

Ministry of Energy of Romania

HIDROELECTRICA

Elektroprivreda Republike Srpske

Ivan Trpeski,

Christopher Millward,

Jaap Sprey,

Director for Development and Investment,

Head for Europe, Middle East and North Africa,

Head of the Office,

ELEM

MIGA

EBRD

SUMMIT HIGHLIGHTS 2019: • Strategic plenary session: What are mid- and long-term hydropower development strategies in the Balkan countries? What are challenges and opportunities for hydropower industry development? • SPECIAL FOCUS! Updates and the latest information on major projects for HPPs construction and renovation in the Balkan region within 20202025 implementation period • Case studies from companies successfully carrying out the construction, modernisation and operation of HPPs across the region Bronze sponsor 2018:

• Exclusive exhibition: innovative solutions and equipment in the context of greenfield and brownfield development • ROAD SHOW: Innovative technologies and equipment for hydropower development • Unparalleled networking opportunities: gala dinner, exhibition, champagne roundtables, and face-to-face meetings

Among participants 2018:

Request more information: www.hydropowerbalkans.com events@vostockcapital.com +44 207 394 30 90 +7 495 109 9 509 73

TECH

New Technology in Romania for the Production of Smart Meters Ducati Energia Romania, company part of the Italian group Ducati Energia, based on Bologna, produces at the factory in Ploiesti 10,000 smart meters per day, whose destination is the European Union, including Romania, for Enel Muntenia, Enel Dobrogea and Enel Banat. Text by Daniel Lazar

“We have invested EUR 1.5 million to expand the factory that we hold in Ploiesti Industrial Park, in a new hall of 1,500sqm, where we produce capacitors and smart power meters, in cooperation with the South Korean company Nuintek. It produces a metallized polypropylene film, a benchmark that has not been produced by any Romanian company so far,” says Bogdan Avram, Director of Ducati Energia Romania. The factory in Ploiesti was purchased by the Italian group in 2016 and its main line of business is the production of smart electricity meters, analysers and regulators, as well as power stations for electric cars, LVM (Low Voltage Manager) and PU (peripheral units). The Romanian company was set up in 2002, the first main office being opened

in the town of Busteni and the secondary office being opened in Ploiesti Industrial Park. The production unit in Ploiesti also has an authorized metrological verification laboratory for reactive power, as well as an approved MID laboratory for active and reactive electrical energy meters. The factory in Busteni, a town where the company is the largest investor, has an area of 7,000sqm and is the one with which the Italian group made its entry in Romania. The main products made in Busteni are: metallized polypropylene film capacitors; capacitors for starting electric engines, available in a plastic housing, as well as in a metal housing; capacitors for power electronics with applications in railways. “At Busteni we produce up to 100,000 74

capacitors daily, and the investment made here amounts to EUR 8.2 million since 2002 to date,” Bogdan Avram added. Ducati Energia, with a privatelyowned capital of EUR 3 million, was established in 1985 and is considered one of the most important companies in Bologna, with 1,200 employees active in the 9 factories spread across the globe (6 in Europe, 2 in South America and one in Asia). The company has 600 employees in Romania (350 at the factory in Busteni, the first opened by the group in the country, and 250 employees at the production unit in Ploiesti). In 2017, Ducati Energia Romania posted a turnover of EUR 125,000,000 and in 2018 it reached a turnover of around EUR 140,231,213.

TECH

Full Diagnosis of Industrial Oils Save Money & Avoid Risks Terraverde Laboratory in Ploiesti, established in 2016 by Prahova-based businessman Dragos Magirescu, is the only one in the country with Romanian ownership that can fully diagnose industrial and automotive oils, working with clients such as Airbus, Romanian Automotive Registry, Higher Civil Aviation School or Ministry of Interior. The initial investment, which included the arrangement of the space and the necessary endowments, has reached the value of EUR 400,000. Text by Daniel Lazar

“Automotive companies recommend that oil be changed at a certain number of kilometres, although it may be in normal parameters. By analysing the oil, we offer the possibility to change the oil to a much larger range, without this affecting the engine in any way, so that the budget allocated to oil change is greatly reduced. Impurities in oil can always be a risk. Heavy particles, such as dust, coloured particles and used metals, can cause abrasive wear, and soft particles can accumulate from old components of additives. Often, they are adhesive and cling to the vehicles or filters, preventing proper operation. We had oils that were used for another 5,000 kilometres compared to what the manufacturer required,” says Florin Aconstantinesei, Director of Terraverde Ploiesti Laboratory.

The company has been in the market for 3 years, but the team has an experience of over 25 years in the activity of physical and chemical analyses and testing of lubricants. “Every year we participate in exchanges of experience with similar foreign laboratories, conferences or workshops, and each time our qualifications were at the level of those from abroad,” Florin Aconstantinesei added. Terraverde Laboratory establishes a diagnosis based on oil analysis from lubricated mechanical components of vehicles and equipment (engines, gear units and hydraulic systems). Diagnosis can be done for industrial oils, motor oils, lubricants for wind energy units or oils used for agricultural and construction machinery. The company’s clients include 75

Romanian Automotive Registry, Higher Civil Aviation School, Airbus Romania, Eni Austria, Prista Oil, Lukoil Lubricants, Mol Romania, Castrol, Timken, Romgaz, Damen Shipyard, Thermoenergy Bacau, Cramele Hallewood, Veolia Iasi, Expert Petroleum Solutions, Remat Holding, Kastamonu and Bucharest Ambulance Service. The company has 7 employees and ended 2018 with a turnover of RON 351,000. Terraverde Laboratory can do up to 80 daily tests, the cost of a basic test being RON 350. The customer is informed within 8-72 hours about the state of wear of the oil or even of every mechanical component of the vehicle, by comparison with hundreds of identical elements of the same family, or the existence of possible engine faults.

TECH

Opportunity to Boost Economy by Creating UK Automotive Battery Supply Chain A

significant opportunity to boost the economy and extend the auto motive battery supply chain is being presented to the UK with the arrival of new advanced technology. As Jaguar Land Rover (JLR) announced that it plans to invest close to £1bn to build electric cars in the UK, the JLR CEO, Professor Dr Ralf Speth, highlights the importance of building a local competitive supply chain. SCI supports the call by JLR for a giga-scale battery production plant in the UK to put the country at the leading edge of electric mobility. As transport

shifts towards electrification, UK gigascale battery production is essential for the next generation of battery technology in order to create smaller, denser, cheaper batteries, and currently the UK is missing out as other countries are investing in developing local supply chains. The UK has important capabilities in various parts of the supply chain and it has access to critical raw materials, in particular in lithium, which has been historically mined in Cornwall, but is also found in high concentrations in aquafers in the north. “It’s great to see new technologies coming to the UK,” said Paul Booth, 76

President of SCI. “This announcement creates further opportunities for further innovations in the materials space to support battery development and to solve the challenge of developing a fully recyclable battery.” SCI is working with the community to help to create the innovations necessary to realise the opportunity that electrification of mobility presents. Sharon Todd, SCI CEO, added “With a long track record of innovation, the UK has the core capabilities required to make a local supply chain a reality, boosting the economy and moving towards the government’s target of being carbon neutral by 2050.”

TECH

Schneider Electric’s Enhanced Data Centre Operations Services Improving Operational Efficiencies and Reduce Risk

Schneider Electric, the leader in digital transformation of energy management and automation, expands its data centre solutions portfolio with the introduction of enhanced, digitized versions of its Critical Facility Operations offers for cloud & service providers and large data centres operators. These new offers make Schneider Electric a leader in digitized data centre operations as well as a single source for all Critical Facility Operation services from the IT space to the supporting infrastructure in the facility.

Software-driven process with 24x7 facility management The new, digitized Critical Facility Operations approach couples a softwaredriven process with 24x7 on-site facility operations and remote support. Benefits for customers include: • Increased operational efficiency: Implementation in real-world customer environments have resulted in operational efficiency improvements of up to 15 percent; • Lower risk and maximum uptime:

Qualified personnel operate and maintain the data centre using powerful digital tools to ensure process standardization and minimize risk of human error; • Efficient IT planning: ‘hands-on’ tactical workflows are supported by centralized expertise for full lifecycle management of IT assets.

Digitized operations reduce risks “At Schneider Electric, we believe that digitization of data centre operations 78

will result in reduced risk of human error, improved efficiency, cost savings, and increased transparency in the data centres we operate around the globe for our customers,” said Anthony DeSpirito, Vice President/General Manager of Data Centre Operations, Schneider Electric. “As a single vendor for all critical operations in the data centre gray and white space, Schneider Electric removes the silos frequently seen between facilities and IT staff, eliminating accountability issues and reducing risk.”

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China Unicom is one of the world’s largest telecommunication companies, providing cloud services in response to massive demand. China Unicom elected to outsource on-site critical power operation services for two of its sites to Schneider Electric. Today, more than 100 Schneider experts operate two of China Unicom’s hyperscale data centres. “Schneider Electric’s mature and customized Critical Facility Operations solution enabled us to improve greatly in terms of reliable operation, predictive maintenance, as well as risk control, achieving 100 percent uptime of the facilities,” said Kang Nan, General Manager of Operations and Services Department, China Unicom. “We’ve also effectively reduced energy consumption, saving us up to 30 percent of cost.”

hoto and digital products

Customized offer to meet specific site and business requirements Critical Facility Operations for data centres is a customized offer with pricing based on size of facility, number of assets, and optional services selected. The offer includes: • 24x7 infrastructure operations and maintenance; emergency preparedness and response; • Vendor management and oversight; • Daily walk-through and monitoring, change management, and continuous systems optimization; • Data centre infrastructure engineer ing for strategic IT hardware ca pa city planning, power and cooling optimization, and monitoring day to day operations; • Rack and stack for standards-driven IT asset lifecycle management services, including installation, moves, adds, changes, and asset decommissioning; • Smart hands for on-site technical sup port, fault identification and resolution, and preventative maintenance. Critical Facility Operations is available globally. The enhanced digitized solution is available today in North America and coming soon to the United Kingdom, Ireland, and China, with other regions to follow.

An elite project from Energy Industry Review focused on corporate, industrial and commercial photography

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ANALYSIS

Scanning electron microscope image of gas hydrate crystals in a sediment sample. The scale is 50 micrometers (Âľm) or approximately 0.002 inches | Photo: Woods Hole Coastal and Marine Science Center

Fire from Ice A Case Study of Methane Hydrates in the Eastern Mediterranean We are living in times of fundamental changes in the energy landscape, driven by uncertainty, unstable energy prices, disruptive technologies, geopolitical gambits and subsequent attempts for regulatory interventions. While governments and corporations are trying to adjust to the new landscape and guess the name of the game, they need reliable sources of power to make predictions and critical strategic decisions. Text by Evgenios Zogopoulos Co-author: Konstantinos Michalopoulos Dipl. Mining & Metallurgical Engineer, National Technical University of Athens 80

ANALYSIS

Historical & geopolitical context The era of hydrocarbons does not seem to be over, but there might be some indications in the horizon. We like it or not, they will still account for the vast majority of the global energy mix by 2050, despite significant breakthroughs in renewables. Many new players come in the energy market with the elusive promise of additional and cheaper resources and the will to disrupt the game – and eventually make money out of it. Furthermore, the growing tension between public policy and private initiatives has been boiling and has been more than just an understatement for decades. The under-investment that we observe now due to lower prices and risks could become chronic and the global output of energy resources could lead to secure supply deficit. Gas is believed to gradually replace coal, which is a source of distress for some existing players. The world is facing a proliferation of Liquified Natural Gas (LNG) supplies that are already impacting gas markets and competing with pipeline gas. Some of the largest and most significant consuming nations are contemplating reform or unbundling, which could mean some take or pay contracts become stranded and an increasing oil price is likely to reinforce the price arbitrage between long-term and spot pricing. There is undeniably a constant call for further investments in renewables, but lower oil, gas and coal prices and increased efficiency (or very effective lobbying) might slow this down. The global players do take into consideration the call for renewables (like solar and wind energy), either for publicity purposes or even because they do believe that this could be the future. The European seems determined to proceed with all legislative acts regrading renewables and the energy mix. A unified European energy market will allow Europe to increase its security of supply by allowing energy to flow freely across borders, therefore avoiding unforeseen complications or imbalance between

union members. But the union members do seem to have some conflicting interests which they subtly but firmly pursue. Russian perceptions of energy security are apparently very different than those of the EU (not the whole EU – also apparently) and primarily about predictability and stability of energy prices because they heavily rely on hydrocarbon revenues. Russia does not want to be vulnerable to Ukraine transit problems, so will accelerate development of alternative routes including Nord Stream 2 and potentially Turkish Stream. Just to set a clear example on Europe’s complicated interests: Germany and the Baltics are supporting Nord Stream while other members (and the ever-present US partner) definitely see it as a Russian manipulation gambit. With the existing global turmoil within the energy market there has been a hope for a new ‘gamechanger’: gas- or methane- hydrates. The supporters of this new potential energy source evangelize that gas hydrates may be seen as a fuel for future and can meet energy requirements of future generations. Methane gas hydrates is a source of methane gas which is found in crystalline formation that look like ice and can be found in permafrost regions or under the sea in outer continental margins. It is estimated that the total amount of carbon in the form of methane hydrates could be almost double the carbon content in all the fossil fuel reserves put together. Enormous amounts of methane hydrate have been found beneath Arctic permafrost, beneath Antarctic ice, and in sedimentary deposits along continental margins worldwide. In some parts of the world they are much closer to highpopulation areas than any natural gas field. These nearby deposits might allow countries that currently import natural gas to become self-sufficient. The current challenge is to inventory this resource and find safe, economical ways to develop it. In 1930’s it was found that solid gas hydrate formed in the oil and gas transmission pipelines in the U.S. were accountable for the clogging of pipelines. 81

After this, gas hydrate was seen as a curiosity and definitely not positive. The first such example responsible for blocking the pipes due to gas hydrate was provided by Hammerschmidt in 1934 who invented the first algorithm for calculating the amount of methanol to inhibit the formation of natural gas hydrates. More than half a century ago, natural gas hydrates were located for the first time as gas hydrate deposit in the vast wasteland of Siberia. Since then there has been always a discussion about its potential to become the alternative energy solution. It was also discovered that the low temperature and high-pressure conditions is the necessity for the hydrate formation which should present extensively around the globe, under the deep oceans and in permafrost regions. The occurrence of gas hydrates in oceanic sedimental layers was first observed through seismic observations before the Ocean Drilling Program started intentionally identifying hydrate deposits, bringing samples to the surface. The last decade the efforts of research and development in the field of gas hydrates has resulted into the discovery of occurrence of gas hydrates in the continental margin areas. Despite this promise, future production volumes are speculative because methane production from hydrate has not been documented beyond small-scale field experiments. Large-scale commercial operations to develop gashydrate deposits are still further away in the horizon. There are many challenges in exploiting gas hydrates. Drilling operations intended to extract methane from hydrates have to cope with the most crucial challenge, that of the volatile nature of the gas and its subsequent expansion as it rises to the surface from a high-pressure to low-pressure environment. Additionally, there is criticism for methane as is it is indeed a potent greenhouse gas and the impact to climate change as a result of hydrate exploitation is a significant concern. A given volume of methane causes 15 to 20 times more

ANALYSIS

General schematic showing typical modes of gas hydrate occurrence relative to the geologic environment

Relict Permafrost on recently inundated shelves (most climate sensitive?)

Permafrost F

Pore-filling in sands at high concentration both within and below permafrost (some pre-existing free gas accumulations)

~350 to 600 m water depth (depending on bottom-water temperature)

d zone

Sea Floor Mounds

plete ane de

Meth

BIOGENIC GAS GENERATION A, B

d” un s -bo mud a t ra d “St cture fra

200 to 1000 meters

Minimal Gas Hydrate (reduced gas supply) far offshore

or Sea Flo Disseminated, pore-filling

Hydrate at upper edge of stability (climate sensitive)

Hydrate-bearing Marine Clays

Hydrate-bearing sand

Hydrate-bearing Deformed Clay

Water-bearing sand Free gas

Deeply-buried, pore filling in sands (resource targets, climate buffered)

Gas Hydrate Stability Boundary

“Chimney Structures”: Dense fracture fills in muds

R. Boswell - 2011

THERMOGENIC GAS GENERATION AND MIGRATION

A A

B B

D D

E E

F F

General schematic showing typical modes of gas hydrate occurrence relative to the geologic environment. Thin (A) and thickly veined (B) sediment-displacing gas hydrates (white) in fine-grained sediment (grey); (C) pore-filling gas hydrates in sand; (D) gas hydrate mounds on the sea floor (hydrate has an orange coating from oil and is draped with grey sediment); (E) disseminated gas hydrates (white specks) in fine-grained sediment (grey); (F) gas hydrates (white) in coarse sands (grey) (adapted from Boswell 2011).

greenhouse gas warming than carbon dioxide, so the release of large quantities of methane to the atmosphere could exacerbate atmospheric warming and cause more gas hydrates to destabilize in a destructive spiral. Some research suggests that this has happened in the past. This is the case of the Paleocene-Eocene Thermal Maximum, 55 million years ago, when global warming may have been related to a large-scale release of global methane hydrates. Some scientists have also advanced the Clathrate Gun Hypothesis to explain observations that may be consistent with repeated, catastrophic dissociation of gas hydrates and triggering of submarine landslides during the Late

Quaternary (400,000 to 10,000 years ago). While the vast majority of methane hydrates would require a sustained warming over thousands of years to trigger dissociation, gas hydrates in some locations are dissociating now in response to short-term and long-term climate processes. The level of danger varies depending on the placement of the deposits that can be broken down to 4 general categories: Thick onshore permafrost: Gas hydrates that occur within or beneath thick terrestrial permafrost will remain largely stable even if climate warming lasts hundreds of years. Shallow arctic shelf: The shallow 82

water continental shelves that circle parts of the Arctic Ocean were formed when sea level rise during the past 10,000 years inundated permafrost that was at the coastline. Subsea permafrost is thawing beneath these continental shelves and associated methane hydrates are likely dissociating now. If methane from these gas hydrates rises to the ocean floor, it will likely reach the atmosphere. Upper edge of stability: Gas hydrates on upper continental slopes, beneath 1,000 to 1,600 feet of water, lie at the shallowest water depth for which methane hydrates are stable. The upper continental slopes, which ring all of the world’s continents, could host gas hydrate in zones that are roughly 30 feet thick.

ANALYSIS

Warming ocean waters could completely dissociate these gas hydrates within the century. Deepwater: Most of the earthâ&#x20AC;&#x2122;s gas hydrates, approximately 95%, occur in water depths greater than 3,000 feet. They are likely to remain stable even with a sustained increase in bottom temperatures over thousands of years. Most of the gas hydrates in these settings occur deep within the sediments. If they do dissociate, the released methane should remain trapped in the sediments, migrate upward to form new gas hydrates, or be consumed by oxidation in nearseafloor sediments.

Methane hydrates - A deeper introduction As discussed above, natural gas is expected to have an upgraded role among renewables in the future, and partake in the energy mix. The new unconventional source of natural gas, methane hydrates, could be considered a game changer in future gas production. Countries, such as the United States of

America, Japan and Canada, have invested in finding ways to produce natural gas from hydrates. These countries have actually managed to get a small-scale production, proving that extracting natural gas from hydrates is technically feasible. Significant methane hydrate samples have also been recovered in the Eastern Mediterranean Sea under the EU-funded â&#x20AC;&#x2DC;Anaximander Projectâ&#x20AC;&#x2122; (20032004). Since then, no further progress was made with regard to carrying exploration programs and production test programs. This approach aims to highlight the importance of the methane hydrates resource among the conventional already available hydrocarbon sources.

Methane hydrates - Energy potential & characteristics Methane, is the primary component of natural gas. When referring to methane hydrates, the gas molecules are not chemically bound to the water molecules but instead are trapped within their

crystalline lattice. The resulting substance looks remarkably like white ice, but it does not behave like ice. When methane hydrate is â&#x20AC;&#x2DC;melted,â&#x20AC;&#x2122; the solid crystalline lattice turns to liquid water, and the enclosed methane molecules are released as gas. Methane hydrate is a fairly concentrated form of natural gas. When dissociated, one cubic foot of solid methane hydrate will release about 164 cubic feet of methane gas. This proportion is exactly the reason why methane hydrates make for a potential source of energy supply. It is clear that we are discussing about an abundant resource existent in many regions around the globe, with recovered hydrate samples already found in some of them (e.g. in the Eastern Mediterranean Sea). Japan, Canada and United States have shown early interest in methane hydrates and have made considerable investments in production test programs to extract gas from hydrates, and managed to get a small-scale productionFuels of gas from hydrates. In 2002, an international

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ANALYSIS

Stability conditions for gas hydrates Depth (metres)

Depth (metres)

Marine setting

Sea surface

200

400

Permafrost setting

Ground surface

Ice freezing temperature

Stability zone Stability zone

600

800

Sea floor

1000

1200

1400

1600

Base of permafrost

1600 -30

-20

-10

Temperature ÂşC

Stability conditions for gas hydrates. Idealized phase diagrams illustrating where methane hydrate is stable in marine and permafrost settings. Hydrate can exist at depths where the temperature (blue curve) is less than the maximum stability temperature for gas hydrate (orange curve). Pressure and temperature both increase with depth in the Earth. Although hydrates can exist at warmer temperatures when the pressure is high (orange curve), the temperature at depth (blue curve) gets too hot for hydrate to be stable, limiting hydrate stability to the upper ~1km or less of sediment. The presence of salt, a gas hydrate inhibitor, shifts the gas hydrate stability curve (orange) to lower temperatures, decreasing the depth range of the gas hydrate stability zone. For seawater, this decrease is approximately 1.1Â°C (Dickens and Quinby-Hunt, 1994) (Figure modified from Kvenvolden (1988a)).

consortium, led by Japan and Canada and including the U.S., conducted shortduration production testing at the Mallik site and demonstrated, for the first time, that methane could indeed be produced from hydrate. As with all unconventional hydrocarbon resources, there are several challenges that need to be met when it comes to field production and gas hydrates are not an exception. After several production tests three main methods of extracting the methane from hydrates were distinguished: A. Depressurization; B. Thermal stimulation and; C. Chemical stimulation. The methods are presented briefly below.

Depressurization: Reducing the formation pressure from equilibrium conditions. The depressurization technique is considered the most cost-effective and practical way to dissociate gas hydrates (Moridis et al., 2009). The method involves reducing reservoir pressure by mechanical means. To achieve this, you can directly reduce the reservoir pressure, by removing pore fluids, or by reducing the pressure in the underlying or overlying sediments in contact with the hydrate reservoir. This pressure change will transfer to the reservoir naturally. The important part here is that you can achieve the goal by using conventional drilling technology (this can solve many issues compared to new untested 84

methods and keep the cost relatively low). Depressurization can be accomplished by perforating the production well casing at the target interval and reducing the weight of the fluid within the well. Normally, a well is filled with fluid from top to bottom. The weight of the fluid is balanced against the pressure of the reservoir in order to prevent the contents of the reservoir (oil, gas, and/or water) from flowing up the well uncontrolled. In the case of a gas hydrate reservoir, once the pressure is reduced below the gas hydrate stability condition, dissociation of gas hydrates will occur in the vicinity of the perforations, releasing gas and water that will then flow to the well. Then the extraction is pretty much similar to a conventional well of natural gas.

ANALYSIS

injecting large volumes of chemicals into the reservoir are a major drawback even in testing field scale production. There is a new concept based on chemical processes at the molecular level that has been the subject of laboratory and modelling studies (McGrail et al. 2007; Graue et al. 2006; Stevens et al.2008). The main idea is to release methane by introducing another gas, such as carbon dioxide, which would change the chemical conditions in the reservoir and replace the native methane hydrate with carbon dioxide. This process could also be a solution to other environmental issues and allow for synergistic storage of carbon dioxide. However, the ability to inject carbon dioxide into water bearing formations with low permeability is limited. A successful trial of this concept in Alaska in 2012 employed a mix of nitrogen and carbon dioxide to enable injection. (Schoderbek et al. 2012). Timeline of past drilling activities conducted by countries, private sector firms, government agencies, and academe that have helped to refine global gas hydrate estimates and possible future drilling and production testing| Credit: Carolyn Ruppel, Woods Hole Coastal and Marine Science Center.

Thermal stimulation: Reducing the formation pressure from equilibrium conditions. The objective of the reservoir-heating technique is to increase the temperature within the reservoir beyond the localized pressure-temperature threshold for gas hydrate stability. The only full-scale field production test using this technique was conducted at the Mallik site as part of the 2002 gas hydrate production-testing program (Dallimore and Collett 2005). Thus, the test permitted assessment of the efficiency of heat conduction into the formation (that is, with no direct heat transfer by formation fluids). With only 500 cubic metres of gas produced over the entire testing period, the 2002 Mallik test was not particularly productive. However, the objective of the test was to demonstrate the feasibility of producing gas that originated indisputably from hydrate deposits, rather than the maximization of such production. Moridis and Reagan (2007a)

and Moridis et al. (2009) demonstrated through numerical simulation studies that thermal stimulation is thousands of times less effective than depressurization as a dissociation-inducing method for gas production from hydrates. Chemical stimulation: Are induced by inhibitor injection in gas hydrate equilibrium conditions. Gas hydrate production by chemical stimulation involves the manipulation of gas hydrate phase-equilibrium conditions by injecting dissociation-inducing chemicals, such as salts and alcohols, into the reservoir. These chemicals cause dissociation by altering the energy potential of water in contact with the solid gas hydrate phase. This approach was common for years to ensure flow assurance in gas wells and to prevent blockages in pipelines due to formation of gas hydrates. The utility of chemical injections for fieldscale production of gas hydrates appears limited. The costs associated with 85

Methane hydrates - The financial aspect The most important factor in assessing the production cost for extracting natural gas from methane hydrates concentrated zones is to find an economic viable way to extract them. As mentioned above, to date three countries have made systematic attempts for the assessment of the most technically and economically viable extraction of natural gas from methane hydrates, namely Japan, USA and Canada. Currently, Japan has an active production test program, USA plans to carry production tests, while Canada has also conducted production tests but has put on hold any further development. According to the Methane Hydrates 21 Research Consortium in Japan: â&#x20AC;&#x153;The fact that the existing systems are capable of supporting methane hydrate development systems means that the production of methane hydrate is able to be carried out almost in the same way as oil and natural gas development once methane hydrate is dissociated in the layers. However, the development of methane hydrate differs from the

ANALYSIS

Location of sampled and inferred methane hydrate occurrences in oceanic sediment of outer continental margins and permafrost regions. Most of the recovered methane hydrate samples have been obtained during deep coring projects or shallow seabed coring operations. Most of the inferred methane hydrate occurrences are sites at which bottom simulating reflectors (BSRs) have been observed on available seismic profiles. The methane hydrate research drilling projects and expeditions reviewed in this report have also been highlighted on this map. (Map courtesy of Timothy S. Collett, USGS)

development of oil and natural gas in many aspects. The following lists shows the major differences. • Oil and natural gas simply flow out when a well is drilled, on the other hand, methane hydrate requires an extra step of dissociating in the layers, and this mechanism must be included in the development system. • Oil and natural gas exist in the deep portion 2,000 to 4,000 m beneath the ground or sea level. On the other hand, methane hydrate is at superficial portion of up to approximately 500 m below the seafloor. • Therefore, oil and natural gas exist in many cases in already consolidated layers, but many of the methane hydrate layers exist in unconsolidated layers. Unconsolidated layers can induce productivity reduction unique to these layers.

•

When the depressurization method is employed for production purposes, the daily production volume of methane gas will be one digit smaller than that of natural gas (100,000 m³ on an average) (even when the simple depressurization method is employed, the current estimated production volume is around 50,000 m³).” Therefore, once the most efficient way to dissociate methane hydrates in the layers is selected, the extraction method and costs will be similar to those of conventional natural gas. The additional cost associated with production from deep-water gas hydrates as compared to conventional gas deposits is USD 3.40 to USD 3.90 per MMBtu. The International Energy Agency has estimated that methane hydrates will be produced by 2025 at a cost of USD 4.70 to USD 8.60 per MMBtu. Furthermore, in order to extract 86

natural gas from methane hydrates concentrated zones in a competitive way, there are certain fundamental conditions that should be met. Cost of production should be equal to or lower than the cost of conventional gas reserves to make technical and economic sense of the extraction. The price of natural gas produced from methane hydrates should be equal to or lower than the price of conventional gas resources (or unconventional ones, such as shale gas). Quantities available for extraction must be enough to secure a continuous production of gas in order for the investment to have a viable rate of return. After assessing the production costs, we need to calculate the transportation costs in order for the gas to reach the European market. Of course, it will be easier to assess such costs since there is a lot of experience in the construction of offshore pipelines worldwide and there are available studies conducted on the transportation of conventional natural gas from the fields in Eastern Mediterranean area. If the abovementioned conditions are met, then the opportunity cost of investing in natural gas will be lower than that of methane hydrates.

Classification of a gas hydrate resource Despite the significant technoeconomic analysis that Europe should conduct in order to assess whether methane hydrate resources from Eastern Mediterranean can be considered as reserves, we must emphasize that the decision to move forward is not based only on technical and economic issues. Evaluation of future gas hydrate development will be influenced by social, economic, environmental, and political considerations, not just scientific and technical issues. Prominent among these considerations is the need to reduce emissions of greenhouse gases as well as energy security issues. Given the high costs involved, gas hydrate production research would likely continue to be facilitated primarily by government funding, with industry participation.

ANALYSIS

Gas hydrate at the seafloor on the U.S. Atlantic margin. The icy deposit formed as gas bubbles emitted from the seafloor transformed into methane hydrate beneath the overhanging rock. | Photo: NOAA Office of Ocean Exploration and Research

Project Anaximander- Recovered gas hydrate samples in the Eastern Mediterranean During the implementation of the EUfunded project Anaximander, not only were mud volcanoes (such as Amsterdam, Kazan, Athena and Thessaloniki) discovered in the area of the survey, but also seven cores containing gas hydrates from five new sites were recovered from Amsterdam Mud Volcano. It was proven that active mud volcanism and the presence of gas hydrates in this sector of Eastern Mediterranean are considerably more extensive than previously thought, with several new sites where gas hydrates were sampled. These recovered samples are proof of existing gas hydrates and they are also strong indications of conventional hydrocarbon resources. We can easily assume from the above facts that the specific area, will be of major economic and scientific interest in the near future. There are strong indications that volumes of conventional hydrocarbons exist along with volumes

of methane hydrates. This means that it is possible, areas with conventional sources of natural gas could also have the potential of producing natural gas from methane hydrates that occur in the same area. This could really be a game changer in economic terms and greatly increase the total production of natural gas for the area. The East Mediterranean has in the recent past experienced what could be described as a gas revolution. Having historically seen limited exploration activity, resulting in modest proven hydrocarbon resources, the region is now considered a ‘new frontier’ for offshore gas exploration in the Middle East and North Africa (MENA). The discovery since 2009 by Israel and Cyprus of large gas deposits, estimated to contain a combined 980 Bcm (35 Tcf), has spurred a flurry of exploration activity, leading some to believe that the discoveries are potentially so vast that the economic map of the region is already being redrawn. By adding the possibility of an extra rich source of energy, the interest in the 87

region will be more intense and lead the oil and gas industry to investigate further the potential production of natural gas from methane hydrate formations in the Eastern Mediterranean.

Geopolitical consequences in Eastern Mediterranean & game theories Apparently, the potential climatic effects are not the only emerging out of this ‘game changing’ discovery; there is also the geopolitical side. The recent emergence of the Eastern Mediterranean as a new hotspot for energy has turned also into a potential warzone – more than what it had already been. The gas reserves discovered in the territorial waters of Israel, Cyprus and Egypt are already contributing to the energy potential and the subsequent energy security of these countries, and their allies. For example, the vast Mediterranean gas reserves can potentially be useful to the EU, which aims to diversify its energy suppliers, also

ANALYSIS

Gas hydrate production method Depressurization

Thermal injection

Inhibitor injection

Water or steam in Gas out

Hydrate cap Dissociated hydrate Free gas

Pressure, Megapascals 0 Liquid + Gas

Methanol in

Depressurization

Gas out

Thermal stimulation

Impermeable rock

Chemical stimulation

Hydrate Dissociated hydrate

15 Gas hydrate + Liquid

Impermeable rock

10 Temperature, ºC

Production methods and impacts on gas hydrate stability. For each of the three proposed gas hydrate production methods (left frame), conditions within initially stable hydrate-bearing sediment are shifted such that hydrate at that location is no longer stable, and will begin dissociating. Right frame: Depressurization: achieved by reducing the formation pressure below equilibrium limits. Thermal stimulation: achieved by increasing the formation pressure beyond equilibrium conditions. Chemical stimulation: changes in gas hydrate equilibrium conditions are induced by inhibitor injection.

with the blessings of the United States. The surge of the East Mediterranean as a future gas-exporting region after the discovery of major gas fields in Israel (Tamar 2009; Leviathan 2010), Cyprus (Aphrodite 2011) and Egypt (Zohr 2015) is recent and also subject to uncertainty over the real gas reserves and thus the difficulty of evaluating the financial viability of their full exploitation. Both Israel and Cyprus expect to begin gas delivery around 2020, if everything goes smoothly. The major source of geopolitical turmoil in the region is a direct result of Turkey’s aggressive claims over the share of the energy pie. Turkey, catapults itself in the discussion using the occupied part of Cyprus as its base for geopolitical argumentation; acting “in the name of protecting the rights of the TurkishCypriot population” they challenge Cyprus and its dominance over its Exclusive Economic Zone (EEZ) openly. This is preventing the construction of a

gas pipeline to connect the Leviathan field with Ceyhan in Turkey, since the pipeline would have to cross the EEZ of Cyprus. The export of Israeli and Cypriot gas to the EU gas market through pipelines connecting in Greece is unlikely in the short to medium term due to extremely high construction costs involved in relation to the supply expected. Rapidly growing gas demand in Egypt, as well as the recent discovery of the Zohr field, which has increased the total national gas reserves to 2,180 bcm – significantly more than the Israeli and Cypriot reserves put together – makes Egypt the major regional player in the gas sector and the potential catalyst of the Eastern Mediterranean gas hub. In addition to exploiting its own natural gas resources, Egypt is likely to start importing gas from the Cypriot and Israeli gas fields by 2020, which could partly offset the current expensive spotmarket LNG imports, which Egypt needs in order to satisfy its domestic demand. 88

The context for Cyprus gas is almost opposite to that of Egypt: with no background in the hydrocarbon sector and actually no domestic gas demand, the pressure on the country’s energy sector is almost all external. Indeed, the possibility of new and greater discoveries, the tensions in the north with Turkey and the Turkish Republic of Northern Cyprus (TRNC), the need to consolidate its energy partnerships in the south with regional powers and to end its isolation via LNG and a gas pipeline have been a huge priority for the small European State. The aim is clear: to secure its protection from Turkish aggression which casts shadows on the country’s energy future and its aspiration as an energy hub. Cyprus did not have proved oil or gas resources until 2011, the year in which the US energy company Noble discovered the Aphrodite gas field in block 12, the southernmost part of the Cypriot offshore concession area.

ANALYSIS

This image shows gas hydrates (the white material) in marine sediments from a test well drilled in the Indian Ocean in 2006 during the Indian National Gas Hydrate Program (NGHP) Expedition 01. | Photo: Tim Collett, Geologist, USGS

The volume discovered is significantly smaller than Zohr but this value is likely influenced by the recent start and the limited size of the exploration activities conducted until now, particularly due to the unclear definition of the EEZs between Cyprus and its neighbours. While these have been settled with an agreement with Egypt in 2003, with Lebanon and earlier with Syria and Israel, they are still unsettled with Turkey and the TRNC. Foreign companies’ interest in exploration is however strong: the first licensing round, which led to the discovery of Aphrodite, was shortly followed by two others which gathered significant attention, the last receiving bids also from ExxonMobil and Qatar Petroleum in July 2016. The two companies, which had previously not

shown interest in Cyprus resources, add to the already existing contracts with Delek, Eni, Noble, Total and Shell. Potentially, Cyprus holds a set of advantages in becoming a gas hub, if compared to Turkey, its closest rival; despite being farther from Central Asian gas reserves, it is closer to Southern Mediterranean fields. Its small domestic market, with limited possibilities of growth, avoids making domestic consumption a cumbersome competitor to exports (as in the case of Turkey and Egypt). Finally, Cyprus has a priority lane towards the EU gas market thanks to its membership. However, Cyprus’ ambition to become a Mediterranean energy hub depends on the success of its exploration activities and its security status. While the resolution of the Cyprus controversy has stalled in the past years, 89

exploration activities are proceeding at a fast pace. So far Cyprus has decided to keep the development of offshore gas reserves separate from the reunification dossier, as stated by Cypriot Minister of Energy, Yorgos Lakkotrypis, in May 2016. The aim is likely to exploit the geographical position of current discoveries – in the south – and the connection with energy-thirsty Egypt, to limit Turkish interference. Yet, as Turkey has proved aggressive enough to reach block 12 with its research and other naval vessels, the emerging risks bring forth the possibility of an open conflict (also according to UN Secretary-General Antonio Guterres). Just to scale this game up, these developments upset the regional status quo long dominated by the United States and NATO, particularly in the security

ANALYSIS

domain. At the end of the Syrian (?) war, Russia and Iran find themselves having secured basing and commercial rights in Syrian ports and Moscow won port- and energy-related agreements and privileges from both Lebanon and Syria. China’s new global Silk Road is aiming at establishing a dominant Chinese transport and logistical presence all along the Mediterranean coast, including the ports of Piraeus (Greece) and Haifa (Israel). The Chinese naval presence in the Red Sea port of Djibouti could very well show this pattern of connecting the Silk Road all the way from China to the Mediterranean. Earlier this year, the Greek Cypriot government signed a deal with a consortium made up of Dutch-British Shell, US company Noble Energy and Israel’s Delek on the distribution of revenues from natural gas exploitation from the Aphrodite field. The agreement allows for the exploitation of an offshore field that is estimated to hold more the 4 trillion cubic feet of gas. This partially solidifies the claims of Cyprus through the military might of Israel (and with Greece being always in the background). The Cypriot government recently issued an international arrest warrant for personnel of the Turkish drillship Fatih and officials from companies cooperating with the state-run Turkish Petroleum Corporation, in response to the Turkish violations of its EEZ and the subsequent aggressions in the area. Meanwhile, US think tanks and the administration can obviously see Russia’s and China’s position being solidified in the Eastern Mediterranean and cannot remain idle; for now, stability in the region and the security of Cyprus cannot be jeopardized – not even by Turkey. Erdogan’s protests count for little in Washington. The US Congress and the Trump administration support Cyprus’s unfettered energy development in the Eastern Mediterranean and the lifting of restrictions on arms sales to Cyprus. Those moves reflect the growing importance to Washington of security and energy concerns in the

Eastern Mediterranean and Turkey’s estrangement from Washington on yet another key foreign policy issue. Additionally, the Eastern Mediterranean energy roadmap could give a solution to European energy independency from Russia (and potentially a powerful level for the US to block Nord Stream 2). Concluding, we have 3 distinct geopolitical levels, emerging from the situation in the Eastern Mediterranean: • The immediate: Concerning the monetization potential and the distribution of wealth between Cyprus, Israel, Egypt, Turkey (and potentially Lebanon, the Palestinian Authority and Syria); • The intermediate: Concerning the European Union (and the conflicting interests even within it) and its energy security and diversification from Russia; • The global: Concerning the global geopolitical powerplays between the US, Russia and China, followed by the interested spectators like Iran and the OPEC countries (regarding the effects of the situation on them). The emergence of a new sustainable energy source, located in the region, could spark even bigger tensions, focusing the global attention in a few square kilometres of sea.

Conclusion The energy sector is undeniably rapidly changing, following our volatile nature as a species; technology, politics, wars and interests keep challenging and shifting the status quo on every field. Therefore, new potential ‘gamechangers’, like gas hydrates, should always be expected as the only thing that has been the everlasting denominator for our species is the totally human need for ‘more’. The know-how is still being developed regarding harvesting ‘Fire from Ice’ and thus making the gas hydrates an efficient (and safe) energy source. As we are discovering more about the nature of the resource, we are also discovering new 90

fields, wielding potentially tremendous amounts, like the ones in Eastern Mediterranean near and around Cyprus. The region has historically been a problematic one, even before, Turkey’s invasion and possession of the northern sector of the island; the nearby Middle East speaks for itself regarding turbulence and wars. Nearby Greece, one of the guarantors for the safety of Cyprus and the surrounding region, cannot be certain if it can guarantee anything more than its 1-year bonds in the global financing markets. Russia and China have de facto moved in the region to secure their advancing steps towards solidifying global power and the United States have been observing while isolating themselves, leaving a power vacuum in the area; a dangerous power vacuum as the children in this neighbourhood are more than rough and have shown that they are totally comfortable with beating each other to the ground when left without parental control. The truth is that the children are presented with a huge potential opportunity, presenting itself in the forms of gas hydrates, giving them ‘Fire from Ice’. In every article circulating the Internet every analyst – or not analyst – claims that the energy game in the region does not have to be a zero-sum game. I claim that this depends on the basis that we are examining each case; indeed, if we were talking about Luxemburg having to share some resources with France and Belgium (or even Germany) we could speak on a non-zero-sum basis game. But here we are talking about a roster of not very prudent or stable players like Turkey, Cyprus, Greece, Lebanon, Syria, Egypt, Palestinian Authorities playing a VERY zero-sum game, along with the interwoven global interests and the tugof-war between the US, Russia, China, EU and the OPEC countries. Afterall, this discovery of gas hydrates could prove dangerous; maybe the ice is very thin and the kind of fire that we might get out of it is not the one that makes lives better but rather the one that takes them away.

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THINK BIG, ACT HUGE 91

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Black Sea Oil & Gas Region Industry Takes Action in the Face of Uncertainty

In Romania, the sudden legislative changes brought a lot of uncertainty for the offshore, onshore, and infrastructure projects. In Bulgaria, exploration campaigns are underway, while the government is standing at the infrastructure crossroad. Ukraine and Georgia are opening new onshore and offshore licensing rounds, but investors donâ&#x20AC;&#x2122;t know what to expect from new markets. Despite all the uncertainty, the industry in the region is not afraid to take action. The first offshore project was launched in Romania, BRUA and other major infrastructure projects are under construction, while low-cost onshore production projects across the region are booming.

The recent Global Oil and Gas Upstream Capital Expenditure Outlook by Key Countries and Companies to 2025 summarized new planned and announced upstream projects for 2019 2025 period. Romania ranked 3rd in Europe with an estimated USD 4.7 billion in spending following Norway and UK. Pelican South block announced by ExxonMobil and OMV with 2,427 US mln estimated project cost is among largest upstream project by Capex. In Ukraine American, Canadian, and Ukrainian companies will invest USD 430 million in oil and gas fields exploration. The 7th annual Black Sea Oil & Gas conference in Bucharest, 23 - 24th of October, gathers international oil & gas 92

companies, governmental and regulatory representatives, and local project owners for an intense 2-day program covering regulatory changes, updates on development and production projects, and technological challenges in the Black Sea. If you are interested to meet all regional stakeholders in one place and get the latest industry updates directly from them book your calendar for this event. Among attending companies: OMV Petrom, Black Sea Oil & Gas, Romgaz, Ukrtransgaz, Ukrgazvydobuvannya, Serinus Energy, Trident Acquisitions, White Stream, EBRD, Grup Servicii Petroliere and Transgaz. More information about the event â&#x20AC;&#x201C; https://www.globuc.com/blackseaoilgas

World Conference for Inspection and Maintenance Robotics 2019 The global Inspection & Maintenance Robotics community will gather in Rotterdam for the second edition of the World Conference for Inspection and Maintenance Robotics.

22-23 October 2019 De Doelen Rotterdam, The Netherlands

The conference will focus on the use of robotics for Inspection, Maintenance, Repairs and Cleaning in the following industry segments: Oil and Gas Road & Rail Chemical Public & Civil Infrastructure Energy Ports & Maritime Infrastructure Aerospace Water Infrastructure

Join us and register now: https://www.sprintrobotics.org/conference/ 93

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Participants Panel Discussion Synergies at IT & Engineering – Inclusive Teaching & Learning “It for All”

Synergies at IT & Engineering – Inclusive Teaching & Learning In April this year representatives of the Energy and Utilities Sector, the IT Sector and the Academic World met for a round-table discussion at the occasion of the Crystal System Group Ltd. course opening ‘IT for All’ at the Polytechnical University of Bucharest, Faculty of Power Engineering. The discussions were moderated by Crystal System’s General Manager, Mr. Costin Avram. 94

All Images are taken at Politehnica Bucharest Faculty of Power Engineering

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Announcing course results “IT for All” and price award e-Bikes for the top 5 “Champions”

bjective of the roundtable discussion was to identify the actual and future needs and expectations of the corporations in the Energy & Utility Sector related to ‘Students ready to Work’ with regard to soft-skills and hard-skills related to IT knowledge and Software Experiences. The main findings of the discussion related to the needs in the Energy and Utility Sector are: • More focus on automation software and relevant applications; • Cybersecurity not only related to technical challenges but also increasing regulations like GDPR; • (Enterprise) Performance Management Concepts and Systems; • Deeper understanding of functional requirements and technical tools to improve the corporate process management; • Forecasting in the energy sector becomes more and more a challenge due to decentralized power generation and Universities and IT Sector shall recognize this and offer higher education focused on this subject; • Understanding of the End-to-End

idea to understand and connect business & IT. Beside of the needs also gaps in the educational sector were identified: • Students often have a lack of basic tool knowledge, even if it is just about office applications like Microsoft Excel and the proficient use of it; • Improve creative thinking at the Universities to enable and train students to understand better the larger picture of their future profession – which equals the before mentioned End-to-End idea. The solutions discussed are: • Programs like ‘It for All’, offered by Crystal System Group Ltd. shall start earlier in the educational system, i.e. transferring basic knowledge in office applications and their use at Highschool level, i.e. Macro Programming, Pivot Tables, Database Basics etc.; • Force the approach of inclusive learning and avoid that each engineering faculty is teaching and learning on its ‘island’. Following the panel discussions, the participants were guided to the IT Teaching & Learning Room Crystal System installed at the Faculty of Power 95

Engineering and explained the Concept and Methodologies trained by Crystal. For the course ‘It for All’ enrolled just after two week 740 students out of which 249 could be trained and 128 students passed at the end (11.07.2019) the exams. Those students who passed the exam received their Certificate of Completion and the five best students received electrical bicycles. The representatives of the Energy & Utility sector concluded that the approach of Crystal System Group Ltd. to invest in ‘Inclusive Teaching & Learning’ at Universities across South Eastern Europe and to bring together students from Economics, Engineering and IT in common classroom is the right way, generates synergies and should be supported with all means. Especially the Energy sector, which sees itself in a structural change from centralized power generation into decentralized power generation as well as confronted with an increasing competitive market environment due to the liberalization of the market. For more information about inclusive learning and the university programs of Crystal System please contact: Crystal System Group Ltd. Mr. Frank Nagorschel, Director Marketing - frank.nagorschel@ crystal-system.eu

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Trenchless Romania Conference & Exhibition th 4 Edition Smart Cities Need Trenchless Technology! 96

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The only event focusing on trenchless technologies in Romania, Trenchless Romania Conference & Exhibition reached its 4th edition on the 13th of June 2019 at the Caro Hotel in Bucharest. The event brought together manufacturers and distributors of equipment and technologies dedicated to the no-dig sector for horizontal directional drilling (HDD), pipejacking, pipe bursting, micro-tunnelling, pipe rehabilitation (CIPP) and other trenchless technologies that are ideal solutions for installing underground utilities in urban areas with heavy traffic, but also very suitable for other applications.

epresentatives of the Austrian Embassy in Bucharest were also present and they manifested their desire for continuing the close collaboration with the companies at the conference. Trenchless Romania Conference & Exhibition 2019 was supported by the International Society for Trenchless Technology (ISTT), German Society for Trenchless Technology (GSTT) and Austrian Association for Trenchless Technology (AATT). Also partners of the event were ARA (Romanian Water Association), ARSCM (Smart City and Mobility Association), APPFE (Partnership Association for Projects and European Funds), Petroleum Club of Romania and AHK (RomanianGerman Chamber of Commerce). Together with them ADUC (Association of Construction Equip ment Distributors), ARACO (Romanian Construction Contractors Association), PSC (Construction Companies Associ ation), APMCR (Manufacturers of building materials Association) manifested their support for the conference. The opening of the event was made by Mark Andre Haebler, President of AATT and board member of ISTT. “Ambition, loyalty, integrity and an open mind. I like Bucharest since the

first time I travelled into this wonderful city, I’ve met extraordinary people here and some of them became very good friends. I bring greetings from AATT association and also from Jari Kaukonen, President of ISTT. It is nice to see new participants each year and I’m happy to be a part of this trenchless day. I’m also pleased that in Romania the trenchless industry continues to grow. Romania is a very good country, if we provide rapid and sustainable construction and rehabilitation methods the economy will benefit, the country and also the employers of this wonderful country. It takes more education and training for our professionals so Romania can play a leading role in trenchless methods in the Eastern European market,” Mark Andre Haebler stated. Special guests were also Klaus Beyer - Executive Director of GSTT and Cristian Dragu, Vicepresident ARSCM (Smart City and Mobility Association) that gave their opinion regarding smart solutions for local authorities. The event was organized into 4 panels. The first panel was dedicated to the official opening and was followed by two panels with technical presentations from the area of pipeline technologies and systems for rehabilitation of water and sewage networks. Presentations included local and international project exposures for direct pipe and rehabilitation of gas 97

pipelines. The conference day ended with the award session for Trenchless Technologies TRENCHLESS ROMANIA AWARDS. Together with the mobility partner Porsche Romania, the guests had the surprise to be picked up at the airport with a VIP Shuttle benefiting of an unforgettable experience. This year the event hosted the 3rd Edition of TRENCHLESS ROMANIA AWARDS, the only ceremony for awarding the projects that use trenchless technologies and products in the trenchless industry. TRENCHLESS ROMANIA AWARDS Gala is also dedicated to the people, the professionals that understand the benefits of using trenchless technology. This year the winner in the category of Trenchless Pipe Rehabilitation was CIS GAZ SA with the project ‘Relining with Primus Line technology the main gas pipeline for OMV Petrom’. In Tunnelling category, the award went to METROUL SA for the project ‘Town to Countryside connectivity design with trenchless BIM’. A special award for the entire activity in promoting horizontal drilling equipment and technology went to Ron Van Dam - General Manager of ROMNED INDUSTRIAL FOUNDATION SRL/Vermeer Romania.

AUGUST’S READING

Technology Innovation to Accelerate Energy Transitions J

apan’s G20 presidency 2019 asked the International Energy Agency to analyse progress in G20 countries towards technology innovation to accelerate energy transitions. The Japan presidency, which began on 1 December 2018 and runs through 30 November 2019, has placed a strong focus on innovation, business and finance. In the areas of energy and the environment, Japan wishes to create a “virtuous cycle between the environment and growth”, which was the core theme of the G20 Ministerial Meeting on Energy Transitions and Global Environment for Sustainable Growth in Karuizawa, Japan, 15-16 June 2019. A first draft report was presented to the 2nd meeting of the G20 Energy Transitions Working Group (ETWG), held through 18-19 April 2019. This final report incorporates feedback and comments submitted during April by the G20 membership and was shared with the ETWG members. This final report is cited in ‘Proposed Documents for the Japanese Presidency of the G20’ that was distributed to the G20 energy ministers, who convened in Karuizawa on 15-16 June 2019. This report, prepared as an input for the 2019 G20 ministerial meeting, is an IEA contribution; it is not submitted for formal approval by energy ministers, nor does it reflect the G20

membership’s national or collective views. The document sets out around 100 ‘innovation gaps’, that is, key innovation needs in each energy technology area that require additional efforts, including through global collaboration.

High-level recommendations for G20 priority action IEA innovation analysis, including in this report, sheds light on key priority actions to accelerate energy technology innovation in the context of the G20. Key recommendations include: • Rigorous tracking of public- and private-sector investment on energy technology innovation is vital to better identify gaps and opportunities to enhance the efficiency of resource allocation. Measurement of progress in clean energy innovation needs to go beyond the flow of investment to also focus on performance indicators. • Cost reduction is the priority. The main goal of innovation is to enable low-carbon technologies to become widespread and self-sustaining so that their expansion can continue without direct government financial support. In this way, innovation will contribute to accelerate the scale-up of low-carbon technology, irrespective of fossil fuel price volatility and independent of climate policy agreements. • The active engagement of the private sector is critical. Mobilising the 98

innovation capacity of the private sector is of prime importance. Traditionally, public-supported research provides a vital source of knowledge and discovery, and the private sector is crucial for bringing new technologies into the market. Businesses, entrepreneurs and investors are best suited to identify, evaluate and support the most promising ideas for commercialisation and to turn innovations into products and companies. Flexible, market-based policy measures that incentivise the private sector to search for the most efficient solutions among businesses and entrepreneurs are needed. • Innovation requires a multidisciplinary, portfolio approach. The most attractive new solutions may be found at the interface of different areas, such as between the energy and digital sectors. As innovation can be an uncertain process, innovation policy frameworks need to ensure that effort is balanced between potentially competing approaches and include public investment in basic research as well as robust intellectual property rules. Flexibility in innovation policy design is also important: the portfolio of low-carbon technologies may change as technology progress and transition pathways evolve. Continuous monitoring and adjustments will be needed. See the report at https://webstore. iea.org/technology-innovation-toaccelerate-energy-transitions