Exxon in Talks with Lukoil on Romanian Exit: Update
(adds comments from ExxonMobil)
ExxonMobil is now in talks to sell its stake in the delayed Neptun Deep gas project off Romania to Russia’s Lukoil, sources in Bucharest told Romanian news outlet G4Media on January 6.
News first broke that in the local media in July that ExxonMobil was looking to pull out of Neptun Deep, where the US major and its Austro-Romanian partner OMV Petrom are targeting 84bn m3 of gas. The project has stalled, with OMV Petrom blaming Romania’s weak investment climate for its reluctance to take a final investment decision.
Romania’s energy ministry suggested in November that state gas firm Romgaz could replace the company at Neptun Deep. Another interested party is Poland’s PGNiG, according to G4Media.
Citing its sources, the news agency said ExxonMobil invited several companies to bid for its 50% stake in the project in November and is now negotiating a sale with Lukoil. The next step in talks is for Lukoil to gain access to technical and financial information about the gas field.
“We are providing information to third parties that may have an interest, but no agreements have been reached and no buyer has been identified,” an ExxonMobil representative told NGW. “We plan to continue to perform our role as operator in advancing the project, including continuing to pursue permits.”
Neptun Deep is to play a core role in Romania’s plan to establish itself as a regional gas supplier. The country is currently a net importer.
ExxonMobil announced in November it would quit the European upstream business, as part of plans to shed non-core international assets to focus more on its US operations, as well as select, major projects in Guyana, Mozambique, Papua New Guinea and Brazil. In September the company agreed to sell its Norwegian upstream business to Eni-owned Var Energi for $4.5bn.
Lukoil is no newcomer to Romania. The company is partnered with Romgaz at the offshore EZ-30 Trident block, where the pair discovered 30bn m3 of gas in 2015. In October last year it secured regulatory approval to drill another well in the area.
Lukoil was also involved in exploring Romania’s EX-29 East Rapsodia contract area but withdrew in 2016 after a well came up dry.