OMV Petrom to become operator of Romania’s Neptun gas field upon Romgaz entry

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Highlights

State-controlled company has bid for ExxonMobil stake

OMV Petrom ‘committed’ to Black Sea development

FID on 84 Bcm field expected in Q1 2022

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OMV Petrom would become the operator of Romania’s undeveloped Neptun gas field in the Black Sea if state-controlled Romgaz is successful in its bid to take over the 50% stake currently held by US major ExxonMobil.

In a joint statement April 23, OMV Petrom — which is majority owned by Austria’s OMV — and Romgaz said the development of Romania’s Black Sea gas was “essential” to Romania’s security and .

Romgaz at the end of March submitted a binding bid for ExxonMobil’s upstream in Romania, which includes its 50% operating stake in Neptun, after the US company invited bids on Feb. 15 with a deadline of end-March.

“In case of acceptance of the Romgaz offer by ExxonMobil, OMV Petrom will act as operator for Neptun block,” the companies said.

Aristotel Jude, general manager of Romgaz, added: “We are ready to act as equal partners to make this strategic project happen. If our offer is accepted, OMV Petrom will become the project operator.”

Romania could become a more significant regional gas exporter if it moves to further develop its vast Black Sea gas resources, including Neptun, which is estimated to hold up to 84 Bcm of gas.

OMV Petrom CEO Christina Verchere said: “The Black Sea is a unique opportunity for Romania and we are committed to contributing to its materialization.”

Romgaz was reportedly the only bidder for ExxonMobil’s Romanian upstream business, though neither company would give further comment on the process when contacted by S&P Global Platts.

Speculation about ExxonMobil looking to exit Neptun began to circulate in July 2019, with the US major finally confirming it was ready to sell its 50% stake in November of that year.

Romgaz had long been trailed as a likely candidate and enjoys government support for taking ExxonMobil’s stake at Neptun. And in November last year, a senior official at OMV Petrom said the company was “ready” to take over as the operator of Neptun.

FID in Q1 2022

Neptun was discovered in 2012, but its development has been on hold for a number of years after Romania implemented legislative changes considered unfavorable by the developers in 2018.

Romania is due to publish its revised offshore law soon in an attempt to improve terms for Black Sea gas developments.

As a result, OMV Petrom said in February it expected the final investment on Neptun to be taken in the first quarter of 2022.

Neptun had been expected to start producing in 2021 at a rate of some 6 Bcm/year if the FID had been taken as planned in the second half of 2018.

But the controversial offshore law enacted that year prompted ExxonMobil and OMV Petrom to the FID.

Romania is currently the EU’s second-largest gas producer after the Netherlands, but could overtake the Netherlands and become the EU’s number one gas producer if Black Sea gas is exploited.

Author

Stuart Elliott

Editor

James Leech

Commodity

Source: Platts

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