NIS and RAG start Exploratory Drilling in Hungary

NIS a.d and RAG Hungary Kft (the Hungarian subsidiary of Austrian Rohöl-Aufsuchungs Aktiengesellschaft) have started to drill a test well (“RAG Pirto-1”) in the south Hungarian “Kiskunhalas” Block. The anticipated drilling depth is nearly 3 000 meters.

Another two test wells are to be drilled this year, for which the two partners jointly allocated a €10 million budget for 2012. If the prospecting is successful in detecting commercial deposits of hydrocarbons, their extraction may start as early as 2013.

NIS and RAG signed in December for joint exploration for the exploration and appraisal of Kiskunhalas block in the south of Hungary. In the event of discovering commercial conventional resources, NIS gets 50 per cent share in the future production of this block, while RAG is to become the project operator.

NIS is one of the largest, vertically integrated oil and gas companies in Southeast Europe, dealing with exploration, production and refining of crude oil and natural gas, as well as with the sales of a broad range of petroleum products.The main shareholders of the Company are Russian energy company Gazprom neft and the Government of the Republic of Serbia.

RAG, which carries out E&P activities in Austria, Germany, Hungary and Poland is also one of Europe’s largest operators of underground gas storage,  serving the Austrian market and providing users in the larger Central European region with storage capacity of 5 BCM targeting up to 6 BCM by 2014.