The move comes with great risks, as the chance of actually finding something is one in five, with costs to match, but the Russians say it makes sense considering that they seek to consolidate their position in SE Europe.
“We’re only waiting to get the approval of the Justice Ministry and then the government decision to get to work in the Black Sea,” says Constantin Tampiza, former general manager of Lukoil Romania, and the current local representative of the president of the Russian group, Vagit Alekperov. “We have two blocks totaling about 2,000 square kilometers, where investments will amount to some $200-$300 million in the exploration phase alone. This phase could take well over three years.”
The exploration stage entails a thorough investigation of the block in question. If information gathered indicates potential hydrocarbon deposits, the next step is drilling a well, which may cost up to EUR100 million.
“We will work with Romanian companies and if we are successful, investments could reach billions of dollars,” Tampiza added.
The largest local company specializing in maritime drilling is Grup Servicii Petroliere, controlled by Romanian businessman Gabriel Comanescu.
There is one more reason to this resource rush, though. “Downstream (refining and gas stations) is losing money everywhere in the world. Profit comes from upstream (exploration and production). The point is to develop only in those countries where demand is not oversaturated,” Tampiza believes.
He thinks Romania falls into this category, as demand should grow once road networks develop.
Lukoil, which ranks third on the local fuel retail market, posted over EUR1 billion sales last year, an increase of about 38% on 2009, but losses increased to EUR39.4 million. The company has about 300 gas stations in this country. “No one in the downstream business is making any profit,” Tampiza concluded.
(English version by Loredana Frățilă-Cristescu)