Romgaz Signs Black Sea Option Agreement with OMV Petrom, ExxonMobil
This week the Romanian government has announced that Romgaz has signed a participation agreement with OMV Petrom and ExxonMobil for the exploration and exploitation perimeters from the Black Sea.
Romgaz will hold a 10% of the exploration and exploitation operations in the Black Sea, the Midia perimeter, located on the continental shore of Romania.
Present at the signing ceremony, the Prime Minister Victor Ponta stated that this agreement offers Romgaz “the possibility to acquire 10% of the benefits related to the exploitation of this area.” “I want to stress that the perimeter that is the object of this agreement is in the neighborhood of Neptun, of which I have heard it represents an extraordinary potential,” said Ponta (…) “It is a strategic option,” pointed out Ponta. At the end of the signing ceremony, Ponta said that Romgaz will be listed on the stock exchange in October, as convened in the negotiations with the IMF.
This is not the first partnership of this type for Romgaz. In November 2012, Romgaz took over a participation of 10% in two exploration and production projects of hydrocarbon from the Black Sea, of which, 8% was from Lukoil Overseas, a branch of the Russian group Lukoil and 2% from Vanco International.
In November 2008 ExxonMobil Exploration and Production Romania Limited and OMV Petrom signed an agreement by which ExxonMobil acquired a participation of 50% in the high depth area of Neptun perimeter. Since that time, the two companies have worked together to acquire 3D seismic data and to evaluate the hydrocarbon potential in the Neptun perimeter. The Neptun area has a surface of around 9.900 square kilometers in waters with a depth between 50 and 1.700 meters.
In October 2012, the consortium ExxonMobil and OMV Petrom has purchased part of Midia block located in the Black Sea from Sterling Resources.
In February of last year, OMV Petrom and ExxonMobil Exploration and Production Romania announced a significant gas discovery in their exploitations from the Black Sea. The preliminary estimates evaluate the natural gas deposit to 42-84 billion cubic meters, which is equivalent to 3 to 6 times the yearly consumption of Romania.
The gas extraction in the Black Sea is scheduled for the end of the decade and the exploitation, estimated to last 10 years, could ensure the energetic independence of Romania with respect to natural gas.
The companies that produce oil and natural gas currently pay royalties between 3.5% and 13.5% of production, depending on the type of the hydrocarbon deposit. These royalty levels were established in 2004 and are valid until December 2014, being established by the privatization contract of the company Petrom with the Austrian group OMV. The drilling operations made by the two companies in the Black Sea begun at the end of 2011.
The execution of the option by Romgaz to aquire 10% of the benefits related to the exploitation of this area is conditioned by the completion of the transfer agreements for the exploration and production rights for a part of the Midia perimeter from the current grant owners is shown in a statement by OMV Petrom. According to the statement, in October 2012 ExxonMobil Exploration and Production Romania Limited (EMEPRL) and OMV Petrom have signed a transfer agreement with Sterling Resources Ltd and Petro Ventures Europe B.V. for the acquisition of a participation of 85% for the rights of hydrocarbon exploration and production related to a part of Midia XV perimeter in the Romanian area of Black Sea. The transfer agreement is not yet finalized, and the conditions for its legal execution, including the approvals of the relevant authorities, are pending completion. When the transfer agreement will produce legal effects, the participation quotas will be: EMEPRL – 42.5%, OMV Petrom – 42.5% and Gas Plus International B.V. (co-owner of the grant for the Midia perimeters) will retain its participation of 15%. Based on the agreed terms, Romgaz has the option to acquire a participation of 10% in Midia Deep from EMEPRL and OMV Petrom. The intent of Romgaz to enter the agreement is caused by the completion of the transfer agreement and by the announcement of a commercial find. The Midia Deep area is near Neptun perimeter.
“This represents a new step in our efforts to sustain Romania’s goal to explore and develop offshore resources, to attain the national energy goals,” stated Mariana Gheorghe, CEO OMV Petrom.
At the same ceremony, John L. Knapp, general manager of EMEPRL said: “We are delighted to proceed in this direction, in the same time acknowledging that the offshore high depth exploration implies high risk investments that need stability and fiscal predictability as well as a good investment environment”. Corin Cindrea, general manager Romgaz, stated that “the signing of this option agreement allows the expanding of our operations in the Black Sea helping us to achieve the strategic goal of our company to increase its resources and reserves portfolio”.
EMEPRL will be the operator of the oil operations in the deep areas of the Midia perimeter. EMEPRL and OMV Petrom are partners in activities on the Romanian shore of the Black Sea, where the two companies have announced, last year, a gas deposit find.
Silviu Monar