Exxon, OMV’s New Gas Estimate Shows ‘Extremely Good’ Output

Romanian President Traian Basescu said a new estimate of OMV Petrom (SNP) SA and Exxon Mobil Corp. (XOM)’s natural-gas discovery in the Black Sea shows an “extremely good” potential output in the medium term.

The new forecast indicates as much as 100 billion cubic meters of natural gas in a potential deposit, compared with a previous estimate of between 35 billion to 80 billion cubic meters of gas, Basescu, who visited the Black Sea drilling rig earlier this week, said in Bucharest today.

Petrom, Romania’s biggest oil company, and Exxon will continue prospecting next year the Neptun Block, located 170 kilometers (106 miles) off the Romanian shore in water about 1,000 meters deep, which holds another five gas deposits with similar traits, Basescu said in a speech in Parliament.

Romania has significant resources in the Black Sea, I think we can ensure our gas needs and probably the needs of a few of our neighbors, as long as we free industry natural-gas prices,” Basescu told the lawmakers. “Deep-water extraction costs aren’t even close to low levels, but market pricing can make gas production feasible.”

OMV AG (OMV), central Europe’s biggest oil company and the majority-owner of Petrom, said on Feb. 22 that it discovered what may be its biggest gas find in the Black Sea well it is exploring together with a unit of Exxon.

The Domino-1 well, which is operated by the Exxon unit, encountered 70.7 meters of net gas pay, resulting in a preliminary estimate for the accumulation ranging from 1.5 to 3 trillion cubic feet (42 to 84 billion cubic meters), OMV said. Drilling operations started at the end of 2011 and the total depth of the well is estimated to be more than 3,000 meters below sea level.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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