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Lukoil Announces Black Sea Exit

Exxon Wants USD 1.2bn for Its Stake in Neptun Deep Project

After the US Co. ExxonMobil had announced its intention to sell its 50% stake in Neptun Deep project in the Black Sea, the turn of Russia’s Lukoil came recently to announce that it plans to sell its 87.8% interest in EX-30-Trident block, in the Black Sea. Romgaz, which is partner with the Russian company in this block, has confirmed that it had received a notification in this regard. While OMV Petrom postpones a decision regarding the Black Sea investment, the US Co. Black Sea Oil & Gas is the only one determined to start Black Sea gas exploitation. Gas deposits in the Romanian Black Sea are estimated at around 200 billion cubic meters, according to an estimate by BP.

According to sources in the oil and gas market, the US company ExxonMobil wants to sell its 50% stake in Neptun Deep project for USD 1.2 billion. Several companies had been interested in taking over its stake, including Poland’s PGNiG, and Russia’s Lukoil, but they have both withdrawn.

ExxonMobil requested the National Agency for Mineral Resources to extend the deadline for submission of the geological research report for 2021, in conditions in which it had to be handed over in this period. Based on this report, a final research report is prepared and then it moves to the next stage, of field development. Investments made so far in Neptun Deep Block by OMV Petrom – ExxonMobil amount to around USD 1.5 billion, according to public information.

 

Lukoil to withdraw from the EX-30-Trident block

Lukoil Overseas (whose majority shareholder is the parent company Lukoil) is titleholder, together with the Romanian company Romgaz, in the EX-30-Trident Block, in the Black Sea. It has an area of 1,006sq km and in 2012 exploration works identified a deposit of 30 billion cubic meters, the second largest after the one discovered in 2012 by OMV Petrom – Exxon Mobil, estimated at 42-84 billion cubic meters of gas.

In late October last year, the Competent Regulatory Authority for the Black Sea Petroleum Offshore Operations (ACROPO) sent to Lukoil Overseas the approval for the beginning of drilling operations in the Trident block.

 

BSOG to bring the first gas to shore in 2021

Petroleum company Black Sea Oil & Gas (BSOG), owned by Carlyle International Energy Partners and the European Bank for Reconstruction and Development, is the only Black Sea titleholder that has so far made the final decision to invest in the exploitation of offshore Romanian gas.

In September this year, the company launched works to lay the pipeline that will bring to shore gas from Midia block, following to begin production next year, estimated at one billion cubic meters of gas per year, the equivalent of 10% of Romania’s gas consumption.

BSOG and Transgaz signed in August last year the order for the commencement of works for the projects of the two companies for taking over production coming from the Midia Gas Development Project into the National Transmission System (NTS). Transgaz project ‘NTS Expansion Vadu-T1’ consists of building a pipeline with a diameter of Ø20” (Dn 500), designed to carry gas at a pressure of 55 bar, with a total length of approximately 24.37 km, which will connect the Black Sea Coast to the National Transmission System – T1 pipeline on the Black Sea Coast – Corbu – Sacele – Cogealac – Gradina direction, completion being estimated for 2021.

Even if they decided to start the investment, BSOG representatives mentioned that it did not mean that they dropped the request addressed to Romanian authorities, to create a friendlier business framework for investors in the oil and gas industry.

“We still insist that the revocation of the hostile measures such as the supplemental tax and Central Market Obligation that were imposed in November 2018 is essential in order to try and regain investor confidence in developing the Black Sea. We are seeing some efforts by the government to address these issues but without the full cooperation of all political parties, Romania will lose out on this tremendous, time-limited opportunity for the country. Our project is moving forward on the basis that these measures were to be resolved,” said on the occasion of launching the pipelaying works BSOG CEO Mark Beacom.

Together with Midia block, BSOG portfolio also includes Pelican block.

 

Turkey announces discoveries of 450bcm

While Romania risks losing its Black Sea investors amid stalling the amendment of the Offshore Law in line with the requests of titleholders, Turkey in August announced the discovery about 150 kilometres off its coast and near the area where the maritime borders of Romania and Bulgaria intersect, a deposit estimated at 320bcm of gas.

Subsequently, in October, Turkey announced that the field was estimated at 450 billion cubic meters.

Turkey’s President mentioned on this occasion that drillship Fatih would start in November operations at other wells on the same block, Kununi drillship joining the operations.

Turkey plans to start using these resources as soon as 2023 and relies on annual deliveries of 15bcm as of 2025.

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