OMV Petrom greenlights Neptun Deep Black Sea gas project
(Reuters) - Romania's OMV Petrom will develop the long-awaited Neptun Deep Black Sea gas project and expects first output by 2027, it said on Wednesday as it announced its final investment decision.
The company, majority controlled by Austria's OMV, will develop the project jointly with state-owned gas producer Romgaz.
One of the European Union's most significant natural gas deposits, OMV Petrom estimated the deep water project would cost 4 billion euros ($4.36 billion) to be split evenly between the two companies, with most of that to be spent in 2024-2026.
Neptun Deep is expected to hold recoverable volumes of around 100 billion cubic metres (bcm) of gas.
The company first announced it had discovered 42-84 billion bcm of gas in the Black Sea in 2012.
A final investment decision has been postponed several times in the last decade as previous governments introduced punitive taxes and regulatory restrictions, with delays felt most keenly in 2022, after Russia's invasion of Ukraine triggered an energy crisis.
Action by Romanian lawmakers last year paved the way to unlock investment in the Black Sea, where the EU state has an estimated 200 bcm of gas that promises to help diversify supply in the region, ensure Romania's transition to green energy, and bring in billions in revenue.
"This final investment decision is a major step forward in delivering OMV Petrom's Strategy 2030," the company said in a statement. "The project is expected to increase the company’s 2030 EBIT by 50%."
"Production at the plateau will be approximately 8 bcm annually, for almost 10 years," it said, which would almost double Romania's gas output.
Potential for more
In 2022, Black Sea Oil & Gas, controlled by U.S. private equity firm Carlyle Group LP, launched Romania's first offshore development in three decades, extracting 1 bcm of gas per year, or roughly 10% of the country's consumption.
Unlike other countries in the region, Romania relies less on Russian gas. It produces about 90% of its required gas locally through Romgaz, OMV Petrom and BSOG.
Its natural gas storage facilities have been filled close to 64% and will have no issue reaching the European Union's 90% level this year, former Energy Minister Virgil Popescu said earlier this month.
The potential for further gas discoveries in Romania's Black Sea was huge, producers have said, but the government needs to improve regulation to speed up development.
The mineral resources agency has not auctioned off new concessions in 12 years and has repeatedly delayed plans to tender 28 new perimeters, including six offshore.
Earlier this month, OMV Petrom said it discovered new crude oil and natural gas deposits equal to about three quarters of its overall 2022 production onshore in southern Romania, the largest find it has made in decades, holding over 30 million barrels of oil equivalent (boe) of recoverable resources.
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