“If you don’t take chances, you can’t win,” says Constantin Tampiza, former general manager of Lukoil Romania and currently the local representative of the Russian group’s chairman, Vagit Alekperov.
Last year, Lukoil was awarded the exploration rights for two blocks on the Black Sea’s continental shelf, with an area of about 2,000 square kilometers. Once they get all the necessary authorization, the Russians say they could invest about $200-300 million into exploration and, if results are good, the figures could reach billions of dollars.
The exploration phase can take longer than three years. If surveys indicate the block may hold hydrocarbon deposits, the next step is drilling a well, which may cost up to EUR100 million.
Lukoil is the second company trying its luck in the Black Sea, behind the Americans at ExxonMobil, who are working with the largest company in Romania, Petrom. The two companies have already completed the data collection phase and have decided to drill the first deep exploration well, meaning their information points to potential hydrocarbon deposits.
The cost of such a probe can exceed EUR100 million and, in most cases, more than one well is required, so investments can grow rapidly. Besides, ExxonMobil said recently that if exploration is successful, total costs up to production can reach between $3 billion and $10 billion.
So far, no one has ventured to estimate the Black Sea’s hydrocarbon potential, but the presence of oil giants willing to spend hundreds of millions of euro on virgin territory might be a clue that the deep waters are host to “a big fish.”
The beginning of deepwater exploration could also be good news for Romanian providers of drilling services or equipment. Constantin Tampiza said recently he intends to hire local companies. One of the most visible is Grup Servicii Petroliere, an offshore drilling company controlled by Gabriel Comanescu.
Aside from the Black Sea, shale gas is like a magnet for international oil giants – Chevron recently announced that Poland and Romania are on their radar for investments. Shale gas is just regular gas, only trapped in shale rock, and as such is harder and more expensive to drill than conventional gas. This non-conventional gas has become more important given the decline of production in the North Sea and of the nuclear power industry, after Germany decided to shut down all its reactors.
(English version by Radu Bostan)