1. Romanian Natural Gas Regulatory Authority (ANRGN) Dan Pantilie President ANRGN Budapest, Hungary May 19, 2004 4 th Annual Meeting of the Energy Regulators Regional Association

2. © Energy Regulators Regional Association 4 th Annual ERRA Meeting Budapest, Hungary, May 19, 2004 Slide 2 Key Events and Activities in 2003 Through May 2004  In 2003, the market opening degree was 30%, 54 companies were declared eligible;  The framework- contract for natural gas supply to captive customers was updated several times during 2003, due to the development of a liberalized market;  For 2004, the market opening degree has been established at 40%, 76 companies have been declared eligible, from which 52 have changed their supplier;  The consumption threshold for eligibility has been reduced from 4 million c.m. natural gas/year to 3 million c.m. natural gas/year;  ANRGN issued ’’Norms on preventing the abuse of dominant position’’.

3. © Energy Regulators Regional Association 4 th Annual ERRA Meeting Budapest, Hungary, May 19, 2004 Slide 3 Key Events and Activities in 2003 Through May 2004  By the Government Ordinance no. 11/2004, ANRGN has passed under the coordination of the Prime-Minister, so that the autonomy of ANRGN has been increased;  In December 2003, ANRGN issued the new ’’Criteria and methods for approving prices and establishing regulated tariffs in natural gas sector’’;  In compliance with the new methodology, ANRGN issued ’’Regulated durations for depreciation of tangible and intangible assets’’;  Related to this methodology, ANRGN approved the “New tariffs for underground storage” (different for each company and storage facility: Romgaz-Medias and Depomures-Tirgu Mures), calculated by a “revenue-cap” system;  In March –April 2004, ANRGN issued the ’’Regulation for granting temporary license in natural gas sector’’ and the ’’Framework – Contract for Natural Gas Underground Storage’’.

4. © Energy Regulators Regional Association 4 th Annual ERRA Meeting Budapest, Hungary, May 19, 2004 Slide 4 Key Anticipated Issues & Activities for the Next Year  Starting with January 1, 2005, the opening degree will be 50%, subsequently on July 1, 2007, the natural gas market will be fully open;  The “Natural Gas Law” will be approved in a Government Session by June 2004 and then submitted to the Parliament;  The Government Decision for approving the “Regulations on access to the transport and distribution systems” will be adopted by 30 June 2004;  The “Regulation on access to the natural gas underground storages” will be adopted by 30 June 2004;  The “Technical Code for liquefied natural gas (LNG)” will be adopted by 30 June 2004;  The Government Decision for approving the “Regulation on access to the up- stream pipelines in the production fields” will be adopted by 31 Decembre 2004;  The revision of the “Regulation for programming, functioning and dispatching the natural gas national transport system” will be adopted by 30 September 2005..

5. © Energy Regulators Regional Association 4 th Annual ERRA Meeting Budapest, Hungary, May 19, 2004 Slide 5 Key Issues and Status of Tariff Methodologies and Levels  Starting with July 1, 2004, new tariffs for transmission services, calculated by a “revenue-cap” system, shall be implemented;  Starting with January 1, 2005, new tariffs for distribution services and also differentiated supply prices will be implemented for 11 categories of customers. Both of them shall be calculated based on “price-cap” system;  Starting with July 1, 2007, new tariffs for transmission shall be implemented. They will be based on „entry-exit” system, differentiated by the transmission distances and reserved capacities.