“We’ll commence new drilling in the Black Sea in 2013,” said Jaap Huijskes, OMV Executive Board Member responsible for Exploration and Production.
Huijskes said Romania would like that OMV’s production in the Black Sea went to local consumers to reduce the state’s dependency on Russian imports. The outcome, however, will depend on the price offered and on the taxation level on the Romanian market, the OMV official said.
Drilling will depend on the taxation system and on royalty levels, Huijskes added.
In 2004, Romania has implemented a set of fixed royalty fees for oil and gas companies ranging between 3.5% and 13% of the production value. The fees were supposed to apply until December 2014, but the government has already announced plans to modify taxation in the field as of mid-2013.
OMV’s local unit OMV Petrom (SNP.RO) and US oil giant ExxonMobil have signed an agreement in 2008 to explore deepwater portions of the Neptun block, some 170 kilometers offshore Romania. Under the deal, Petrom operates the initial work program, while ExxonMobil helps fund the program and provide expertise in evaluating the deepwater seismic data. Drilling started at the end of 2011.
In February this year, the two companies reported a significant gas discovery at their joint Domino-1 deepwater well in the Neptun block. Preliminary estimates for the accumulation range between 42 to 84 billion cubic meters of natural gas, which would exceed by three to six times Romania’s annual consumption.
ExxonMobil recently announced plans to invest over $1.2 billion in drilling works at the Neptune block over the next two year.