Directors in Romania’s state-controlled oil and gas producer Romgaz have approved the purchase of ExxonMobil's 50% stake in the Neptun Deep offshore gas exploration and development project in the Black Sea.

In its disclosure statement to the Bucharest Stock Exchange, Romgaz said the transaction will be structured by it taking full control over one of the US supermajor's wholly owned subsidiary in Romania.

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Romgaz will pay $1.07 billion for the subsidiary, following protracted talks, due diligence studies and an independent evaluation of the assets, held by a ExxonMobil subsidiary.

Romgaz' directors have authorised the company to proceed to signing the share purchase agreement with the US major and paying a $106 million deposit once the deal is rubber stamped by Romgaz’ shareholders at an emergency general meeting and by “competent corporate bodies” at ExxonMobil.

Romgaz has yet to announce the date for the EGM.

The Romanian government holds a 70% stake in Romgaz, with the balance of its shares traded on the Bucharest Stock Exchange, with the current market capitalisation of the producer assessed at about $3.3 billion.

Romgaz will have to pay the balance to ExxonMobil once the deal obtains necessary regulatory approvals from authorities in Romania, according to the directors’ decision.

According to reports in Bucharest, once the deal is completed, operatorship in the Neptun Deep project will be transferred from ExxonMobil to Romania’s OMV Petrom that holds the other 50% interest in the project.

ExxonMobil and Romgaz have worked together on this large block in the Black Sea since 2008. The asset is estimated to have recoverable reserves of between 42 billion to 84 billion cubic metres of gas.

Up too 2019, the US company was responsible for exploration in the deep-water areas of the block, while Romgaz explored the tract’s shallow waters.

The Neptun Deep project remains on hold pending while Romania’s government tries to secure legislative approval to ease the tax burden on Black Sea offshore developments.

Romania had the highest effective tax rate on offshore gas production among relevant European states at 23%, more than four times higher than average, according to a study by consultancy PwC Romania and quoted by Reuters recently.