Petrom to Invest EU400 Million to Boost Output, CEO SaysAndra Timu and Irina Savu
OMV Petrom SA, Romania’s biggest oil company, will invest 400 million euros ($527 million) in the next two years to boost output from nine existing domestic oil and gas fields, the company’s top executive said.
The Bucharest-based company, majority owned by OMV AG, has begun preparing two fields for increased output and will have three more ready for extra production by year-end, said Chief Executive Officer Mariana Gheorghe. She declined to say when Petrom will begin work on improving the remaining four fields.
“We plan to have five of the nine projects in the implementation phase by the end of this year and the investment amount includes the entire process, including the production,” Gheorghe said in an interview in Bucharest today.
Petrom plans to invest more than 1 billion euros ($1.33 billion) in 2013, mostly in exploration and production, as it seeks to focus on field redevelopment projects to mitigate and stabilize declining output. It’s also searching for resources in the Black Sea, where it announced last year a potentially significant discovery in the Neptun block, together with Exxon Mobil Corp.
Petrom’s 2012 oil and natural-gas production totaled 183,000 barrels of oil equivalent a day, down 2 percent from a year earlier, according to its earnings statement released today.
Austria’s OMV said last February that the Domino-1 well, operated together with the Exxon unit, encountered 70.7 meters of net gas pay that resulted in a preliminary estimate of accumulation ranging from 1.5 to 3 trillion cubic feet (42 to 84 billion cubic meters).
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.
“We plan to complete three-dimensional seismic studies of the Domino well by the end of this year so we can start interpreting these data with a clear purpose of better understanding the well and also discover other exploration targets,” Gheorghe said.
Exxon and Petrom, together with Royal Dutch Shell Plc, have also won a production-sharing agreement for Ukraine’s Skifske oil and gas field on the Black Sea shelf, located near Neptun. The companies still need to agree with the Kiev-based government on the terms of a contract.
“We hope to complete discussions with Ukraine this year, that’s the objective, but it takes two to tango,” Gheorghe said.
Petrom may also team up with Repsol SA, Spain’s largest oil producer, for exploration on Romania, Jurnalul National, a Romanian newspaper, reported yesterday citing unidentified people in the energy industry.
Mariana Gheorghe said she won’t comment on the report as Petrom will announce any new partnership should it happen.