OMV Petrom Seeks To Extend Shallow Water Production
Romania’s OMV Petrom announced September the start of a new drilling campaign costing €70mn in the shallow waters of the Istria oil and gas block in the Black Sea, involving four new wells – three in existing fields and one exploration well.
OMV Petrom, the largest oil and gas producer in southeast Europe, said it plans to drill two wells by the end of this year and another two wells by mid-2018. The wells are planned to be drilled to depths of up to 2,000 meters below sea level.
Istria block shallow water oil and gas production amounts to some 30,000 barrels oil equivalent/day, accounting for around 18% of OMV Petrom’s production in Romania. The company’s upstream chief Peter Zeilinger said: “Although the producing fields in the Black Sea have a production history of 30 years, they continue to provide a significant part of the group’s total production. The current drilling campaign is in line with our strategy to exploit the full potential of our core portfolio and to make production more efficient in order to manage the natural decline.”
OMV Petrom has exploration, development and production operations in the shallow waters (Istria block). The name, Istria, derives from a province of Croatia bordering the Adriatic Sea on the opposite side of the Balkans, so far from the Black Sea.
Istria might extend Romania's production, Neptun would raise it
Separately OMV Petrom as operator is exploring Romania’s Black Sea deepwater area (Neptun Deep) in a 50-50% partnership with ExxonMobil. In 2012 both firms estimated their Domino-1 discovery well, in Neptun Deep, had a gas accumulation of 1.5 to 3 trillion ft3 (42bn to 84bn m3) at 100% equity. OMV assessed in 2013 that Neptun might produce 6.5bn m3/yr; both though had said that first production would not be before 2020.
However OMV CEO Rainer Seele voiced further doubts last month about that schedule when he said: “In second half 2018 we shall need to decide on development, but we must decide on how we will market the gas.” Hungary’s refusal to build its section of the BRUA pipeline, intended to take Black Sea gas into central Europe, could have implications for how OMV and ExxonMobil market their deepwater Neptun gas reserves, said Seele.
Austria’s OMV holds a 51.01% controlling interest in OMV Petrom. The Romanian state, via the Ministry of Energy, holds 20.64% of OMV Petrom shares, state fund Fondul Proprietatea holds 12.57%, and 15.79% is free float on the Bucharest and London stock exchanges.
Romania’s gas output could expand into the 2020s, from its 10.3bn m³ level in 2015, if OMV and Exxon were to proceed with Neptun and if US private equity fund Carlyle were to develop its offshore Midia gas field.
Mark Smedley