Romania's Romgaz Interested in 20% Stake in Neptun Deep Offshore Gas Project

Source Reuters
Company Romgaz ExxonMobilOMV Group 
Tags Deal Rumours, Upstream Activities
Date February 18, 2020

Romania’s Romgaz said it has agreed with OMV  Petrom and Poland’s PGNiG to make a joint offer for  Exxon Mobil’s 50% stake in a long-stalled offshore natural gas project in the Black Sea if the U.S. company decides to  sell.

State-owned Romgaz would then be interested in holding a 20%  stake in the Neptun Deep project, Chief Executive Adrian Volintiru said.

Exxon confirmed in January it was weighing an exit from the Neptun Deep project. The other half of the project is owned by Romania’s OMV  Petrom, which is majority-controlled by Austria’s OMV.

“We have the appetite to acquire 20% of Neptun Deep should  Exxon decide to  sell,” Volintiru told an energy seminar organised by financial daily Ziarul Financiar, and said Romgaz had signed a joint binding  agreement with OMV  Petrom and PGNiG to partner in buying  Exxon’s stake.

Romania’s economy minister said on Monday he was confident Romgaz would be part of a consortium to  buy Exxon’s stake.

Romgaz also holds a 12.2%  stake in a separate offshore joint venture in the Black Sea led by Russia’s Lukoil.

Several gas producers have spent a decade and billions of dollars preparing to tap Romania’s Black Sea gas, but they were blindsided by price caps, taxes and export restrictions pushed forward by a previous centre-left government.

Romania’s current Liberal minority government is running the European Union country on an interim basis after it lost a no confidence vote earlier this month. Prior to the no confidence vote, it had begun undoing some of the legal and tax changes that had raised concerns with investors.

Whereas Neptun Deep is still awaiting an investment decision pending legal changes, another Black Sea oil project, Black Sea Oil & Gas (BSOG), controlled by private equity firm Carlyle Group LP, has been almost finalised. It could start producing roughly 1 billion cubic metres of gas per year in 2021 with some delays, BSOG told the same seminar.

“It’s vital to us that by the time we start producing first gas these things (tax and legal changes) will be resolved,” BSOG chief executive Mark Beacom told the conference. “We have two years to get this sorted.”

Meanwhile, Romgaz’s Volintiru said the company was also hopeful about new onshore gas discoveries. In 2017, Romgaz announced its biggest find in three decades in the Caragele field, in the central Romanian county of Buzau, with an estimated 25-27 billion cubic metres of gas.

“We have hopes that somewhere in Bucovina in eastern Romania there could be a very large field, comparable to Caragele, but we need to do some more digging to confirm,” Volintiru said. (Reporting by Luiza Ilie; Editing by Susan Fenton)

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd