The postponement of a decision regarding Neptun Deep investments comes in the context in which OMV Petrom’s natural gas output in the first quarter of 2019 plunged by 8%, compared with the same period in 2018.
“The current legislative environment does not provide the necessary prerequisites for a multi-billion investment decision. We remain keen to see the Black Sea developed and we will continue the dialogue with the authorities to understand the way forward,” the company said in its report.
“At the end of March 2019, the Government approved the Emergency Ordinance no. 19 to amend the Emergency Ordinance 114/2018 following consultation with market players. We consider Emergency Ordinance no. 19 a much-needed development towards the return to a liberalized gas market. According to our preliminary assessment, the net impact of these measures on OMV Petrom Group’s 2019 Operating Result is around EUR (40) mn,” the report also reads.
In the fall of 2018, OMV Petrom said it had decided to postpone an investment decision on its Black Sea exploration project until 2019 because the Romanian government took too long to set the framework conditions for the offshore law. The exploration of the Black Sea Neptun block is a joint venture between OMV’s Romanian subsidiary Petrom and U.S. major ExxonMobil, and includes the first deep-water exploration well in Romanian waters.
“In Romania, daily hydrocarbon production was 147.9 kboe/d, down 5% yoy. Total production stood at 13.3 mn boe. Crude oil and NGL production in Romania was 6.0 mn bbl, broadly in line with Q1/18, mainly reflecting natural decline, which was almost compensated by the contribution of new wells. Gas production in Romania was 7.3 mn boe, 8% lower than Q1/18, being influenced by natural decline, surface maintenance works and unplanned workovers,” as per the report.