Black Sea Discovery Could Cover Romania's Natural Gas Needs for 20 years

Executives from ExxonMobil and OMV-Petrom recently held two important official meetings with the Prime Minister of Romania, Victor Ponta and Romanian President Traian Basescu to discuss the operating prospects of natural gas deposits recently discovered on the continental shelf of the Black Sea.

The talks reviewed technical matters and tried to establish a timetable for the start of the operations and sale of natural gas from the recent discovery.

Following discussions, Cotroceni Traian Basescu said he was "pleased that the companies maintain their intentions of exploration and exploitation of energy resources in the Black Sea."

Prime Minister Ponta had said earlier at the beginning of the weekly cabinet meeting that as the vague estimate period in which it can be extracted natural gas to be become a predictable period of a maximum 5- 6 years, and that at the meeting with representatives of the two companies, ExxonMobil and OMV-Petrom agreed "they will invest in the next period up to one billion dollars in Romania."

The investment will be used to implement appropriate technological structure exploitation of the newly discovered gas reserves, but also in the transport system to the shore.

Exxon Mobil Exploration and Production Romania Limited (EEPRL), a subsidiary of Exxon Mobil, together with Petrom started in December 2011 the drilling exploration at Domino 1 well, the first exploration well in the deep waters of the Romanian sector of the Black Sea. The natural gas deposit was discovered in the Neptune block, at 170 kilometers from shore in waters with a depth of about 930 meters.

According to officials of the two oil companies, the preliminary estimates are about 42-84 billion cubic meters of gas, e.g. up to six times more than the annual consumption of Romania.

According NAMR President Alexandru Pătruţi, "An eventual start of exploitation can be done only a few years."

Romania was awarded the perimeter areas where ExxonMobil and OMV-Petrom discovery occured following a historic decision of the International Court of Justice (ICJ) in The Hague in February 2009.

The ICJ ruled on the Romanian-Ukrainian dispute relating to the delimitation of the continental shelf around Snake Island, giving Romania almost 80% of the disputed area. Romania has thus obtained the sovereign jurisdiction and sovereign rights, especially operating on an area of continental shelf and exclusive economic zone of 9,700 square kilometers.

Follow the decision, the Romanian state leased several exploration blocks to E&P companies for 30 years. Among licensed companies, OMV - Petrom and Exxon Mobil International Limited proved to be the most interested in achieving tangible results.

NAMR's Patrut says that "the royalties obtained by Romanian state after concessions is a percentage of production that estimated between 3.5 and 13.5% of the production value, depending on the size of the deposit."

According to statistics, the Romanian natural gas production has decreased every year having peaked in the '90s.  Annual consumption is 14.2 billion cubic meters of gas and 30% of this amount is imported at a price three times higher than domestic gas paid, an estimated 515 EURO thousand cubic meters, one on the highest prices in region for Russian gas.

For Romaina, the prospects of achieving independence from Russain sources, even for a period or 20 years, has great geo-politics implications.

Silviu Molnar       

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