Romania’s OMV Petrom has signed a production sharing agreement with authorities in the former Soviet republic of Georgia that will extend the company’s exposure to offshore projects in the Black Sea.
Authorities in Georgia have been unsuccessfully trying to attract international investors to explore its Black Sea offshore sector since 2006 after US independent Anadarko Petroleum — since acquired by Occidental Petroleum — conducted 2D seismic studies and identified four prospective structures in the southern part of the Georgian maritime sector.
The PSA, agreed this week, covers large offshore Block II encompassing almost 5300 square kilometres in the centre of the Georgian sector of the Black Sea in water depths of between 400 metres and 2000 metres.
OMV Petrom will this year undertake geoscientific and environmental studies and prepare for a large offshore 3D seismic campaign in 2022 for a detailed evaluation of the block’s potential.
Georgia’s Prime Minister Irakli Garibashvili, who attended the signing ceremony in the capital of Tbilisi, said the government is “ready to provide support to OMV Petrom in the successful implementation of the project”.
The PSA will run for 25 years, with an option to extend it for another five years, according to Georgia's Agency for Oil & Gas, with the sides to discuss drilling options after new seismic information is collected and legacy seismic data is re-interpreted.
Head of the agency Giorgi Tatishvili said earlier that authorities expect OMV Petrom to commit to spending up to $30 million during the exploration phase.
OMV Petrom said in Wednesday's statement that “the cost of the drilling stage depends on the results of [seismic and other] studies”.
Other governmental officials in Georgia have hailed OMV Petrom’s existing exposure and experience in offshore oil and gas projects in the Black Sea and the company’s readiness to invest in the country, the economy of which has been hit by the Covid-19 pandemic.
Georgia has still to identify potential investors in its offshore Block I, located closer to its maritime border with Russia. It is also hoped that OMV Petrom may conduct exploration work on Block III, which lies closer to Turkey. According to the agency, the deadline for submission of bids for Block III is 11 May 2021.
Black Sea opportunities
In Romania, OMV Petrom has exploration, development and production operations in the shallow waters of the Black Sea at the Istria block and exploration operations in partnership with US supermajor ExxonMobil in deep-water Neptun Deep block.
In a joint venture with French supermajor operator Total, OMV Petrom is also active in exploration and appraisal activities in the Han-Asparuh Block in Bulgaria..
In February, OMV Petrom said that it is considering a joint venture with Ukraine’s state gas importer and distributor Naftohaz Ukrainy to explore and develop several shallow and deep-water offshore blocks in that country’s sector of the Black Sea.