June 29 (SeeNews) - Romania's top oil and gas group OMV Petrom [BSE:SNP] said on Monday that it will get a licence for oil and gas exploration in the Black Sea block II in Georgia only if the negotiations on a production sharing contract are successfully finalised.
If the negotiations are successfully concluded, OMV Petrom will obtain the rights to conduct oil and gas exploration activities in Block II, located on the shelf and within the economic zone of the Georgian offshore Black Sea, it said in a statement filed with the Bucharest Stock Exchange.
On Friday Georgia's State Agency of Oil and Gas said that OMV Petrom has been selected as the winner of an international tender held by Georgia's economy ministry for the Offshore Block II.
"We continue our plans to expand our upstream activities in the Black Sea region. This is another milestone, after signing a contract to enter the Han Asparuh exploration license in offshore Bulgaria. It is a natural continuation of our more than 40 years of experience in the Romanian Black Sea waters," Peter Zeilinger, OMV Petrom member of the executive board, responsible for Upstream, said.
The exploration block covers a total area of 5,282 square km.
Before starting drilling, OMV Petrom will carry out two-and three-dimensional seismic exploration works on the perimeter, the agency said in a social media post. Drilling costs will depend on the exploration results, it added.
The agency also said that the cost of the similar 'Domino-1" project in Romanian territorial waters, belonging to OMV Petrom, was $1.5 billion (1.34 billion euro).
Currently, OMV Petrom has exploration, development and production operations in the shallow waters of the Black Sea, in the Istria block and exploration activities in partnership with ExxonMobil in deep-water areas, in the Neptun Deep perimeter. Oil and gas production in shallow waters amounts to approximately 25,000 boe per day. In 2019, it accounted for around 17% of the group’s domestic production.
In December 2019, OMV Petrom signed a contract to acquire a stake in the Han Asparuh exploration licence in Bulgaria. OMV Petrom acquired the participation held by OMV Offshore Bulgaria in the Han Asparuh exploration licence in Bulgaria by acquiring all its shares from OMV Exploration & Production. The transaction is expected to be concluded in mid-2020.
OMV Petrom is the largest energy company in Southeast Europe, with an annual group hydrocarbon production of 55.4 million boe in 2019 and a refining capacity of 4.5 million tons annually. The group is also present on the oil products retail market in Romania and neighboring countries through 800 filling stations, at the end of March 2020, under two brands – OMV and Petrom.
Austria-based OMV Aktiengesellschaft holds a 51.011% stake in OMV Petrom. The Romanian state, through the energy minister, owns 20.639% of OMV Petrom, Fondul Proprietatea holds 9.998%, and 18.352% is the free float on the Bucharest Stock Exchange and the London Stock Exchange.
OMV Petrom's shares were trading flat to 0.32 lei ($0.07/ 0.07 euro) on Monday on the Bucharest Stock Exchange as at 0921 CET.
(1 euro=4.8421 lei)