CAPITAL: Bucharest

MONETARY UNIT: Leu

REFINING CAPACITY: 499,037 b/cd

OIL PRODUCTION: 130,065 b/d

OIL RESERVES: 1.4 million bbl

GAS RESERVES: 13 tcf

Romania`s government approved investment incentives to save a deal in which Elf Aquitaine SA of France would explore in the Black Sea.

The government said it would allow Elf to keep its books in euros to ensure a more accurate exchange rate with the Romanian leu. It also granted the French company tax breaks on imports of exploration equipment.

Elf had signed a preliminary contract with the Romanian national oil company, SNP Petrom SA, to lease an offshore block covering 10,000 sq km in the Black Sea, but the government delayed the deal for 5 months.

Elf would be operator and hold a 70% share. It was selected because Petrom lacked money for deepwater exploration and drilling.

In other licensing action, Ramco Energy PLC, Aberdeen, acquired the working interest in Romania`s Block VI from Clyde Expro Ltd.

The production-sharing agreement was now owned 51% by state firm Petrom and 49% by Ramco. The license gave exploration and production rights to structures below existing Petrom fields on the 1,781 sq km block.

Also in 1999, the US Trade and Development Agency gave Romania`s Oil Terminal Co. a $185,000 grant to fund a feasibility study on upgrading the facility in readiness for receiving Caspian oil.

The study would develop technical details, implementation guidelines, costs, and schedules related to upgrading.

OIL Terminal, Romania`s sole oil terminal based in the Black Sea port of Constanta and one of the biggest in southeastern Europe, had a crude oil storage capacity of 1.7 million cu m. It could transfer 24 million tonnes/year of crude and 10 million tonnes/year of products.

TDA earlier provided a $650,000 grant to study the feasibility of a Constantople-Trieste pipeline for the anticipated inflow of Caspian oil. That study suggested the pipeline could be economically viable.

Processing activity

The Romanian government threatened to cancel the sale of the country`s biggest oil refinery, Petromidia SA, to Akmaya ve Sanayi Ticaret AS because the Turkish company failed to meet a payment deadline.

Akmaya had agreed early in 1999 to buy 65% of the refinery and petrochemical plant for $465 million, including $226 million for upgrades, and pay Petromidia`s $260 million debt.

After Akmaya failed to meet the deadline, Trade Minister Radu Berceanu said the refinery might be offered for sale again.

In 1997 Akmaya unsuccessfully bid for Turkey`s state-owned petroleum retailer as part of a plan to diversify into the oil industry. It said it wanted to refine Caspian Sea oil at Petromidia for the Turkish market.

But Akmaya said the government failed to deliver on promises of tax and tariff reductions.

Separately, OAO Lukoil Holding, Russia`s biggest oil producer, agreed to pay the $34 million debt of Petrotel, a Romanian oil refinery.

Lukoil bought 62% of Petrotel in 1998 and invested nearly $10 million to renovate the plant. The purchase terms didn`t include an obligation to pay Petrotel`s debts.

Meanwhile, OMV AG, Austria`s largest oil and gas company, planned to invest $98.3 million to build 100 gasoline stations in Romania by the end of 2003.

In 1998, Romania had 1,000 gasoline stations for 23 million people, while OMV had 566 in Austria, which had a population of 8.1 million.