Romanian natural gas producer Romgaz (BVB: SNG, controlled by the state) announced on August 1 that it completed the takeover of all shares of ExxonMobil’s local subsidiary that holds 50% of the concession agreement for the deep water zone of Neptun XIX offshore block – located some 200km from the shore, in the Romanian Black Sea.

If everything goes according to expectations, the production will begin in mid-2027 at an initial rate of 6 billion cubic meters per year.

It is the second new offshore operation after BSOG already started production in June in its shale water Black Sea perimeter at an initial rate of 1 billion cubic meters per year.

The transaction involving the 50% stake in Neptun XIX was conditioned upon fulfilling the conditions precedent provided in the sale purchase agreement concluded on May 3, 2022, between Romgaz and the seller.

“We are determined to proceed to the development-production phase in the shortest time, together with our partner,” said Romgaz CEO Aristotel Jude.

Romgaz’s partner, the owner of the other 50% stake in Neptun XIX offshore block, is OMV Petrom, which is becoming the operator of the concession contract after ExxonMobil pulled out of the agreement by selling out its participation.

The investments related to the exploration stage of the concession contract will begin after OMV Petrom decides in this regard - an event expected by OMV Petrom CEO Christina Verchere in mid-2023, only after the Romanian authorities provide clarifications in regard to the new Offshore Law.

“The offshore law brings some improvements that we welcome, but we need clarification regarding free market principles based on the transfer of operating responsibility,” Verchere stated while unveiling the outstanding Q2 financial results last week.

ExxonMobil and OMV Petrom explored the deep-sea Neptun block, where preliminary results indicated reserves of 42-84 billion cubic meters of gas (Romania’s annual consumption is around 11 billion a year), but the companies postponed the decision to go further away with the extraction stage.

(Photo: Flyingrussian/ Dreamstime)

iulian@romania-insider.com