The Contribution of the Oil & Gas Industry to the Romanian Economy 2022
The role of the oil gas sector in Romania has been exponentially increased since the beginning of this decade The scientific approach used by Ec. Dr. Laurian Lungu to highlight the direct economic dimension of this sector in the context of the Romanian economy needs no further elaboration and points out how crucial this industry is becoming.
The total impact of our industry in the economy (i.e., including direct, indirect, and induced effects) is more than significant, increasing from 3.1% of GDP in 2020 to 4.1% of GDP in 2021 and approximately 8% of GDP only in the first half of 2022. The above figure underestimates the true impact of the sector in the economy, given that some of the companies were not part of the survey. Apart from the increase due to economic recovery after pandemic and the effect of sustained investments during the last 10-15 years, a significant part of this gain is attributed to the rise in oil and natural gas prices all over the world. However, the positive impact on the economy by oil and gas sector in Romania facilitated new instruments built by the state in order to alleviate the numerous symptoms of a complicated decade from multiple perspectives.
The need for this sector in difficult times has been proven with historic recurrence since its beginning. The energy crisis was perceived as a more serious threat than anything else by a significant number of Europeans, while Romanians already had schemes of compensation that were financed through the taxation of this sector. The threats to the security of supply and blockages in weak energy mixes are, fortunately, not significant concerns for Romania at this moment due to its local production of oil, but most importantly, natural gas.
Natural gas is arguably the most important energy source now, playing a significant role in maintaining the security of supply for most countries around the world. The popularity of natural gas as a fuel source is due to its clean burning characteristics, affordability, and versatility. Thus, the security of supply of natural gas is critical for ensuring the reliability and availability of the European economy. A secure natural gas supply provides predictability, consistency, and can meet the public and industrial demands of its users without disruptions. This can be achieved through a combination of factors such as a robust and flexible infrastructure, reliable supply sources, and many other aspects that are part of our constant dialogue with the authorities.
We hope to see that Romanian production will only increase in the next years, especially through offshore and deep onshore projects that will consolidate this country’s role in the new energy security architecture of its region. Through this industry, Romania has the potential and responsibility to make a greater impact in reshaping eastern European security in all its dimensions and improving the living standards of Romanians. This is mainly done through taxes from major contributors of this industry, which are a vital source of revenue for Romania, providing the resources necessary to fund public services, promote economic growth, reduce income inequality, pay for government debts, and foster social stability.
This study reconfirms that the natural gas industry remains a strategic sector for Romania. We assure you that we understand our role well and we remain aware of the expectations that concern us, which we want to honor in the future, defending the interests of Romanians, today and in the future. Our involvement is not limited to the economic contribution we make every year, but we want to continue to be a solid and real teammate, a provider of energy security and balance, both in the context of the geopolitical turmoil we are going through and in the context of the transition to decarbonisation. For over 150 years, without ceasing, we remain a pillar of stability and partnership in our country.
In closing, we assume a clear message: we are here to build the future together with all those who believe in Romania.
Signed by
FPPG Board
