The Romanian state-run company, which posted EUR1 billion revenue last year, holds 25% in three blocks in partnership with a Polish and a British company. Geological surveys suggest there are both natural gas and oil in the blocks.
“We can only calculate the oil reserves at this stage, which we estimate at 2 million to 5 million barrels in each block,” says Maciej Karabin, geologist with Discovery GeoPolska, a company that holds 50% of the license and is the operator of the blocks.
If the reserves are confirmed, the oil in the three blocks alone should be worth $130 million to $340 million at the current oil price. Romgaz would get a quarter of it, that is $32 million to $85 million.
Although the output would be relatively low, opening a new line of business would help Romgaz diversify its streams of revenue, at a time when domestic demand for natural gas and electricity is flat at best.
Romgaz is the second largest company by market capitalization, 13.8 billion lei (over EUR3 billion), on the Bucharest Stock Exchange. Capitalization has gone up 1.7% since the beginning of the year. (EUR1=RON4.4799)
(English version by Loredana Fratila-Cristescu)