The prospect holds an estimated 100 billion cubic meters of gas, roughly equal to Norway’s annual output. European natural gas prices have more than tripled in the past 12 months amid concerns over Russian supplies.
“Given what’s happening in the European Union, and the necessity to have gas flowing sooner than we expected, we’re trying to look at different approaches,” Romgaz Chief Financial Officer Razvan Popescu said in an interview in Vienna late on Tuesday. “We’re looking at various metrics as the gas price has gone through the roof.”
With Petrom having the final say as the development’s operator, the partners are considering relying more on existing Black Sea infrastructure and dividing the project into two or three stages to bring gas to the market earlier, Popescu said.
“Neptun production should start no later than 2026,” he said. “That was the initial estimation in Exxon’s plans but maybe there will be a way to speed it up because we all know the necessity to have European gas flowing.”
Romania is one of the few EU member countries with significant domestic gas production, but still relies on Russia to cover about a quarter of its needs.
Romgaz, which is awaiting final regulatory approval to complete its takeover of Exxon’s stake, is planning to sell international bonds to help finance the project, Popescu said. The company is considering five- to seven-year bonds, with a first potential tap of 500 million euros ($534 million) seen around mid-2023, followed by another sale of a similar size a year later, according to the CFO.
After a long-delayed change of offshore exploration rules finally passed into law this month, Romgaz and Petrom, the country’s largest oil and gas company, are due to make their final investment decision on Neptun Deep by the end of 2022.
The Black Sea offshore gas resources offer a huge opportunity for Romania to continue to be energy independent, to bring additional budget revenues and to create jobs.
In 2008, OMV Petrom entered a Joint venture with ExxonMobil for the exploration of the Neptun Block in the deepwater sector of the Black Sea. The block covers an area of approximately 7,500 square kilometers in water depths ranging from 100-1,700 meters.
Over 1.5 billion USD were invested between 2008 and 2016 in exploration and appraisal activities in the Neptun Deep block. The exploration included two 3D acquisition campaigns and two exploration drilling campaigns, with eight exploration and appraisal wells drilled.
In 2012, Domino-1, the first deepwater exploration well in Romania, confirmed the existence of a natural gas reservoir.
In January 2016, the second exploration drilling campaign in the Romanian deepwater sector of the Black Sea was successfully completed, with seven wells drilled, the majority of them having encountering gas.
In 2017, extensive engineering activities took place in preparation for the potential final investment decision.
Currently, we continue to evaluate the technical and commercial viability of the project.