OMV Petrom greenlights offshore Black Sea gas project Neptun Deep
BUCHAREST, June 21 (Reuters) - Romanian oil and gas group OMV Petrom, majority-controlled by Austria's OMV, on Wednesday said it has made the final investment decision to develop long-awaited Black Sea deep water gas project Neptun Deep.
The company, which will develop the project jointly with state-owned gas producer Romgaz, said it expected first gas output by 2027.
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It estimated the project will cost 4 billion euros ($4.36 billion), to be split jointly between the two companies, with the spending seen mostly in 2024-2026.
Neptun Deep is currently expected to hold recoverable volumes at around 100 billion cubic metres (bcm) of gas.
The company first announced it had discovered 1.5 to 3 trillion cubic feet of gas in the Black Sea in 2012, one of the European Union's most significant natural gas deposits.
A final investment decision has been postponed several times in the last decade as previous governments introduced punitive taxes and regulatory restrictions, with delays felt most keenly in 2022, after Russia's invasion of Ukraine triggered an energy crisis.
Romanian lawmakers reversed changes last year, paving the way to unlock investment in the Black Sea, where the EU state has an estimated 200 bcm of gas which would diversify supply in the region, ensure Romania's transition to green energy, and bring billions in revenue.
"This final investment decision is a major step forward in delivering OMV Petrom's Strategy 2030," the company said in a statement. "The project is expected to increase by 50% the company’s 2030 EBIT."
In 2022, Black Sea Oil & Gas (BSOG), controlled by U.S. private equity firm Carlyle Group LP, launched Romania's first offshore development in three decades, extracting 1 bcm of gas per year, or roughly 10% of the country's consumption.
($1 = 0.9165 euros) (Reporting by Luiza Ilie; Editing by Varun H K)