ROMANIA'S OIL TRADE RELATIONSHIPS WITH LIBYA AND THE UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T01017R000404230001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: February 24, 2011
• Sequence Number: 1
• Publication Date: August 15, 1986
• Content Type: MEMO

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DATE 8 k,
DOC NO e(~,Q r L - d~7 / liO
OCR
P&PD I
Central IntdlVnce A n y
15 August 1986
Romania's Oil Trade Relationships with
Libya and the United States
Summary
Largely because of its need for crude oil, Romania
has promoted economic relations with Libya in recent
years. Romania provides construction services and
oilfield exploration and development. Romania also
pays cash and barters military equipment for oil. We
estimate that Bucharest's imports of Libyan-origin
crude oil in 1986 will amount to about 50,000 b/d, or
15-20 percent of its total crude oil imports. Romania
also imports substantial amounts from the USSR, Iran,
Iraq, Syria, Kuwait, Algeria, Egypt, and China.
Drawing upon these imports in addition to its domestic
production of 200,000-240,000 b/d, Romania produces
about 400,000-500,000 b/d of refined petroleum products
annually, of which it exports about 200,000 b/d. In
1984 the United States imported 37,000 b/d and 33,285
b/d in 1985 of refined products from Romania. If
current trends continue, US imports could reach more
than 40,000 b/d this year.
This memorandum was prepared by Centraleast
European Branch, East European Division, Office of European
Analysis. It was requested by Thomas Simons, Deputy Assistant
Secretary, Bureau of European and Canadian Affairs, Department of
State. Comments and questions are welcome and should be
addressed to Chief of East European Division,
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The Oil Issue in a Political Context
Romania has a long standing trade relationship with Libya
based primarily on Romania's interest in crude oil. Economic
relations with Libya became even more important to Romania after
the outbreak of the Iraq-Iran war, which sharply reduced oil
imports from those two countries. Although political differences
have arisen with Libya over Romanian support for moderate Arab
states such as Egypt and continued diplomatic relations with
Israel, they have not impeded what both sides consider mutually
beneficial economic relations. Romanian visitors to Libya
between the spring of 1985 and June of this year have included
President Ceausescu, one of his closest advisers, and the
Romanian Minister of Foreign Trade. Last summer the two
countries signed an ambitious five-year economic, scientific, and
technical cooperation agreement. Following the US airstrikes
against Libya in April, Romania, in a departure from its usual
practice, publicly criticized the United States.
Details of Romania's Oil Trade
Romanian trade with Libya has amounted to approximately
$200-$300 million in recent years, roughly equivalent to
Bucharest's trade with Greece or Yugoslavia and about one-fourth
of total trade with the United States. Direct Romanian liftings
of Libyan oil have been running at about 20,000 to 40,000 b/d
annually in recent years. In addition, some Libyan oil has been
shipped to Romania on Soviet account. We estimate that direct
Romanian liftings will amount to about 20,000 b/d this year, with
another 30,000 b/d shipped on Soviet account. If total Romanian
imports of crude remain at last year's 294,000 b/d, Libyan origin
oil would account for 15 to 20 percent of imported oil.
Romania pays for Libyan crude with cash, military equipment,
and services. Oilfield exploration, development, and maintenance
are among the most important services provided by Romania.
Romanian firms own and operate about 5 oil rigs in Libya. The
Romanians are also involved in the construction of schools,
residences, highways, a port, and, possibly, a canal.
Bucharest is also trying to obtain crude as
some $65 million in overdue credits owed by Libya.
repayment for
Romania also imports oil from Iran, Iraq, Syria, Kuwait,
Algeria, Egypt, China, and the USSR. Most of its imported oil--
ranging between 220,000-300,000 b/d in recent years--arrives by
tanker at the Black Sea port of Constanta, but some may arrive at
the Danube ports of Galati and Braila. With 12 oil refineries
(Table 1) and several ports in Romania, Libyan oil is probably
mixed with crude from other sources. We have no hard information
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Domestic production of crude oil in Romania has been 220,000
to 240,000 b/d in recent years. Drawing upon this production and
imports of crude oil, Romania produces about 400,000 to 500,000
b/d of refined products annually. Romania exported somq 200,000
b/d annually in 1984 and 1985. Of this; the United States
imported 37,000 b/d in 1984 valued at $514 million and 33,285 b/d
in 1985 valued at $458 million. If current trends continue, US
imports could reach more than 40,000 b/d this year. Gasoline and
other light oils are the major petroleum product imports (Table
Problems with Certificates of origin
Romania would be reluctant to forego either Libyan oil or US
export markets because much of Libyan oil is paid for on a barter
basis, thus conserving much-needed hard currency, and because
most refined oil exports to the United States earn hard
currency. Romania could probably isolate Libyan-source oil from
products exported to the United States if it chose to do so, but
this would be costly and Romania would probably regard such a
request as unwarranted interference in its domestic affairs. If
forced to choose between exports to the United States and imports
from Libya, Romania would probably preserve its Libyan oil
supply. Finding other hard currency markets for refined oil
products would likely prove easier than finding other sources of
crude oil on a barter basis. After much initial protest,
however, Romania might accede to the United States request to
provide certificates of origin for crude used in products
exported to the United States, knowing that verification of these
certificates would prove difficult even if US officials had some
access to refineries. In view of the recent Romanian campaign to
restrict access of foreign nationals to industrial enterprises,
we think the regime would be unlikely to allow any US inspection
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Romanian Oil Refineries
Plant Name
Brasov Petroleum Refinery
Cimpina Petroleum Refinery
Darmanesti Petroleum Refinery
Gheorghe Gheorghiu Dej Petroleum Refinery
(also known as Onesti Petroleum Refinery
or Borzesti Petroleum Refinery)
Navodari Petroleum Refinery
Pitesti Petroleum Refinery
Ploiesti Petroleum Refinery Bazi
Creditul Minier
Ploiesti Petroleum Refinery
Columbia Aquila
Ploiest Petroleum Refinery
Concordia Vega
Ploiesti Petroleum Refinery No. 1
Ploiesti Petroleum Refinery Teleajen
Suplacu De Barcau Petroleum Refinery
Location
Brasov
Cimpina
30 kw west-northwest
of the city of
Ploiesti
5 km north of Onesti
Navodari
Pitesti
Ploiesti
Ploiesti
Ploiesti
Ploiesti
Northwest corner of
Romania near the
Hungarian border,
375 km northwest of
Ploiesti
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US Imports of Refined Petroleum Products From Romania, 1983-85
1983
1
98
4
1985
Barrels/
Day
Value*
Barrels/
Day
Value*
Barrels/
Day
Value*
TOTAL
19,601
294,837
37,008
513,983
33,285
458,365
Gasoline and other light oils
15,379
243,559
27,538
382,667
15,797
215,748
Distillate fuels
2,910
38,088
1,126
14,391
1
2
Residual fuel oils
1,312
13,190
1,121
11,672
3,121
29,243
Lubricating oils and grease
NA
NA
7,223
105,253
14,366
213,372
*Thousand $US
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SUBJECT: Romania's Oil Trade Relationship with Libya and the
United States
Distribution:
Original -
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Requestor
NIO
John Danylyk, INR
D/EURA
C/EURA/EE
C/EURA/EE/CE
EURA/PS (1 SOURCED)
CPAS/IMC/CB
DI/PES
D/OEA
DDI
1 - EACH BRANCH
1 - EURA/EE/CE CHRONO
1 - EURA/EE/CE PRODUCTION
1 - AUTHOR
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