Romanian oil and gas company OMV Petrom has announced that it will invest around EUR 400 million in the re-development of mature oil fields up until 2015. A scheme at Suplacu in North-Western Romania has now entered the implementation phase and alone will carry a EUR 200 million investment over the next two years, according to an OMV Petrom statement published today (March 29 ). The Suplacu fields have been exploited for 50 years and currently account for 10 percent of OMV Petrom's daily Romanian oil production.

The firm emphasized the importance of re-developing older oil fields, which account for a significant part of OMV Petrom's production, and indicated that in recent years, production decline had been reduced to 1 percent/per year. “We operate very mature fields and over the last years we have been able to reduce the production decline rate to roughly 1 percent per year. At present we supply approximately 40 percent of the oil and gas demand in Romania. Field redevelopment projects are, and will be, essential to keep production stable,” said OMV Petrom CEO Mariana Gheorghe.

Via the use of modern equipment, technology and techniques, OMV Petrom hopes to increase recovery rates for oil and gas, make operations more energy efficient and limit environmental impact. Currently, the average reserves recovery rates for the 238 fields the company operates are 25 percent for oil and around 49 percent for gas. “Basically, with the help of new technologies, we will be able to extract more from fields that have been in production for decades. We believe there is still potential in these mature fields,” said OMV Petrom Director Domestic Assets Gabriel Selischi.

The Suplacu field re-development project includes additional drilling, application of new methods to increase the recovery of hydrocarbons, construction of a new gathering park and water treatment plant as well as the modernization of the gas combustion and air compression systems.

At the end of 2012, OMV Petrom had four re-development projects with the engineering phase underway and two (one of which was Suplacu) that had passed final investment approval. The six fields account for 40 percent of OMV Petrom's total oil production and the expected EUR 400 million investments are estimated to result in additional reserves of 70 mn boe.

As of the end of 2012, OMV Petrom exploited proved oil and gas reserves of approximately 775 mn boe in Romania and Kazakhstan, but with the vast majority in Romania, with a maximum annual refining capacity of 4.2 mn t. The company operates 800 filling stations under two brands, Petrom and OMV, in Romania, the Republic of Moldova, Bulgaria and Serbia.

In 2012, the Group’s turnover was nearly EUR 5.9 billion and EBIT was over EUR 1.2 billion. OMV, holds a 51.01 percent share in OMV Petrom. Romania's Ministry of Economy holds 20.64 percent of OMV Petrom shares, the Property Fund has 20.11 percent, the European Bank for Reconstruction and Development (EBRD) – 1.62 percent and 6.62 percent is free floating on the Bucharest Stock Exchange.

Liam Lever, liam@romania-insider.com