Naftogaz, OMV Petrom Team up for Black Sea Ops
Ukrainian producer Naftogaz has signed a memorandum of understanding with the Romanian arm of Austria's OMV on joint exploration and production projects in the Ukrainian Black Sea. The two countries share a boundary.
Naftogaz has applied for 36 special permits to explore the Black Sea, after the government decided last November to let the company explore the country's offshore zone without having to go through a tender. The Ukrainian firm will start analysing opportunities to co-operate with OMV Petrom at these areas, it said on February 15.
"Attracting international investors is an important contributor to achieve gas independence for Ukraine by 2030," Naftogaz's chief operating officer Otto Waterlander said in a statement. "We believe OMV Petrom is a valuable and reputable partner who brings investment capacity, expertise and relevant experience in the region."
OMV Petrom is a seasoned Black Sea operator and has said it is eager to expand in the region. Its main offshore project is the 84bn-m3 Neptun Deep gas discovery in Romanian waters, where it is partnered with ExxonMobil. The pair have repeatedly delayed taking a final investment decision on the project, however, because of extra taxes and sales restrictions imposed by Romanian authorities in late 2018.
Undeterred by these difficulties, OMV Petrom recently kicked off a new offshore drilling campaign off Romania. It also completed the takeover of Austrian parent OMV's stake in the Han Asparuh block in Bulgarian waters adjacent to Neptun Deep last September, and is also negotiating a production-sharing contract to explore off the coast of Georgia.
Ukrainian authorities auctioned off rights to a 9,500-km2 area of the Black Sea in 2019, awarding a licence to London-based Trident Resources. But the award was cancelled, after the government said bidders had not been given enough time to size up the asset. The government had wanted to restage the contest, but that plan was put on hold as a result of the coronavirus crisis. It then decided to grant access to Naftogaz instead.
Naftogaz has claimed before that the Ukrainian Black Sea could hold 1-2 trillion m3 of gas – enough to support 10bn m3/year of annual gas production. But drilling is needed to prove reserves and assess how much gas is commercially recoverable.