A gas project off Romania’s coast in the Black Sea has become the centre of a dispute between the country and its Central and Eastern Europe (CEE) neighbour Austria.
The diplomatic standoff involves geopolitical and energy issues around the Neptun Deep gasfield, and also Austria’s steadfast opposition to Romania’s entry to the Schengen area, a border-free travel zone.
Austrian energy company OMV is involved in the strategically important Neptun Deep gasfield, which from 2027 could yield 10bn m3 gas per year. OMV and the Romanian state each own 50% of Neptun Deep.
OMV goes legal over dispute
Romanian Prime Minister Marcel Ciolacu says his government will not amend its own law governing offshore gas sales, as long as Austria blocks Romania’s Schengen entry.
The standoff has already led to OMV taking Romania to an international arbitration court after it modified the law, which gives the government veto powers over private contracts in emergency situations.
Ciolacu has threatened to sue Austria to court for up to 2% of Romania’s economic output in damages, after being kept outside Schengen for over a decade beyond its initial accession date.
Romanian Energy Minister Sebastian Burduja said the dispute should not be viewed as “tit for tat” but also suggested that Austria’s veto was politically motivated.
Romania secure regarding Neptun’s future
The company believes that the future of Neptun Deep, which represents a USD 4bn investment to cut dependence on Russian gas, is secured due to its critical role in Romanian and EU energy security. However, the ongoing war in Ukraine could disrupt construction, which is scheduled to begin next year, ahead of the operational target date of 2027.
Romania argues that the project is crucial for regional security and energy diversification, emphasizing its significance for the entire region, including Austria.
OMV, which employs around 8,000 people in Romania, has reportedly lobbied the Austrian government in private for Romanian and Bulgarian accession to the Schengen area.
The EU’s employment rate reached a record high of 70.9% in the fourth quarter of…
Greece has announced plans to repay its first bailout loans a decade ahead of schedule,…
Despite their export-driven economies and strong manufacturing bases, Central and Eastern Europe (CEE) countries may…
Slovenia is at the centre of a strategic struggle between France and the US, as…
The EU’s internal market is still falling short of its founding promise. Despite decades of…
An outbreak of foot-and-mouth disease (FMD) has prompted mass animal culls and tightened border controls…