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Oil

With the largest petroleum reserves in Eastern Europe, Romania was a major oil producer and exporter throughout much of the twentieth century. The oil extraction industry, developed primarily by German, United States, British, and Dutch companies, was the forerunner of the country's belated industrialization.

During the Great War the Germans needed lubricants very badly. These were the only oil-fields from which they could get them in any quantity. They would have benefited by the products of the Roumanian wells for as long as they occupied the oil region. Then they would have destroyed the industry themselves so as to prevent the Allies from making use of it.

In October 1916 a section of von Falkenhayn's army was sweeping forward like a great flock of vultures to the rich prey they expected to find at Ploesti, the centre of the immensely rich oil region of Roumania. There in the valleys of the Prahova, Dimbovitza, of Teleajen and Buzeu the earth sweats through the pores of the soil the surplus blood from her vast arteries. Covetously, with hungry eyes eager for the prize, the Germans were quickly advancing counting on the rich spoil they would find in the great store of oil, petrol and benzine of which they were so desperately in need.

The British Government had sent out Colonel Sir John Norton Griffiths, D.S.O., a well-known engineer and member of Parliament, a man of great energy and determination, to aid and advise them in this crisis. For Roumania it was a stern and tragic decision to take, and nothing but the supreme gravity of the moment could have justified it, forced upon them as it was by the relentless advance of the enemy. It was a terrible and heart-breaking undertaking to have to deliberately sanction the destruction of a vast industry, and never perhaps in the history of the world had there been an act of self-sacrifice so moving as the immolation of a country's treasure at the height of its prosperity on the altar of dire and tragic necessity, while her people starved and cried for bread. But the exigencies of the situation demanded it, and as Vandervelde said, "to destroy war it is necessary to carry war to its logical conclusion." The Government had given orders that all the workmen employed there, young and old, without distinction of nationality, were to be evacuated, so that no one capable of repairing the wells should fall into the hands of the enemy.

To leave the oil-wells untouched would have been a crime. The enemy was so close on their heels that the work of destruction had to be effected with the utmost speed. The benzine and petrol was poured through the open sluices and pipes until it flooded the factories and ground to a depth of several feet. Into this were hurled machinery tools, dynamos, after having been first smashed to pieces.

By 1950 oil satisfied nearly half of Romania's total energy needs. Peak production was reached in 1976, gradually declining in subsequent years, as many of the country's 200 oil fields began nearing depletion and discovery of new reserves waned. Increasingly large quantities of crude had to be imported, and in 1979 imports surpassed domestic production for the first time. Despite an accelerated exploration program, with average drilling depths increasing to 8,000 to 10,000 meters, oil output declined from 308 barrels per day in 1976 to 227 in 1986. Beginning in the late 1970s, Romania became one of only ten countries producing offshore oil-drilling rigs. In 1988 seven such platforms were operating in the Black Sea under the supervision of the Constanta-based Petromar enterprise to develop hydrocarbon reserves in the continental shelf.

During the 1970s, Romania invested heavily in developing an outsized oil-refining industry just as domestic petroleum production was beginning to decline and the world market price for crude was skyrocketing. Some observers estimated that by 1980 the country was losing as much as US$900,000 per day by exporting oil products derived from imported crude. But because these products found a ready market in the West--they accounted for 40 percent of exports to the West in the late 1980s--Romania continued largescale processing of imported crude to earn hard currency. By 1988 domestic crude output had fallen to 9.4 million tons, while refining capacity stood at some 30 to 33 million tons annually. To keep the refineries running, ever larger volumes of crude had to be imported--first from members of the Organization of Petroleum Exporting Countries (OPEC), but after the outbreak of the Iran-Iraq War, from the Soviet Union. Soviet crude deliveries reached about 6 million tons in 1986. Under the terms of a barter arrangement, Romania was to receive at least 5 million tons of Soviet crude annually during the 1986-90 period in exchange for oil-drilling equipment and food products.

The natural gas industry was unable to offset depletion of known reserves, and output declined from 1,216 billion cubic feet in 1976 to 940 billion cubic feet in 1986. Some Western experts believed that Romanian reserves could be exhausted as early as 1990. After it had begun importing gas from the Soviet Union in the mid-1970s, Romania obtained incrementally larger shipments; in 1986 it imported 2.5 billion cubic meters of Soviet gas. For its participation in projects to develop Soviet gas resources, Romania was expected to receive shipments of at least 6 billion cubic meters annually after 1989. In addition, as payment for transit rights for a 200-kilometer gas pipeline across Dobruja to Bulgaria, Romania would be receiving an unspecified amount of Soviet gas for a twenty-five-year period.



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Page last modified: 11-07-2011 03:05:16 ZULU