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OMV Petrom possibly interested in BSOG offshore project
OMV Petrom (BVB: SNP), the most important oil and gas company in Romania, is reportedly interested in Midia Natural Gas Development (MGD) project, the only new offshore gas exploitation in the Black Sea that is furthermore reportedly open to strategic investors, according to Profit.ro.
As the MGD shallow water project has already reached the production stage (1 bln cubic meters per year) and is not far from OMV Petrom’s Neptun Deep project, the takeover would make sense, economically - depending on the price, though.
MGD’s shareholders, the Carlyle investment fund and the European Bank for Reconstruction and Development (EBRD), are reportedly preparing a “data room” in an attempt to bring strategic investors as partners or buyers for the project.
The Neptun Deep offshore project, developed by OMV Petrom with Romgaz, has climbed up on the priority list of the company's main shareholder OMV, the head of the Austrian group, Alfred Stern, said, quoted by Profit.ro.
Stern explained that part of the group's strategy, which focused on chemistry and petrochemicals, was influenced by the latest developments in the energy market.
"Indeed, the current crisis made us think, and we made some changes and adjustments. The Neptun Deep project in the Black Sea was already an important project for us. But as you can imagine, it has moved even higher on our priority list at this point," Stern said.
Neptun Deep has moved upwards and downwards on OMV's priority list over the past years, as the Austrian group has expected better financial and commercial terms.
The Romanian authorities had to defer the calendar of the concession contract concerning the deadline for declaring the project as commercial. However, OMV Petrom will eventually have to make a commitment in this regard by the end of the year, minister of energy Virgil Popescu said.
As regards the final investment decision, it shouldn't be expected sooner than mid-2023, OMV Petrom CE Cristina Verchere said.
Profit.ro speculates about the Romanian authorities - whose permit is needed for the transfer of MGD from one investor to another, in part or in whole - being interested in bringing the project under the ownership of a local company (OMV Petrom or Romgaz). But the indebtedness of Romgaz already came under pressure after the takeover of the 50% stake in the Neptun project from ExxonMobil, while OMV Petrom accumulated a large pile of cash after the record profits this year.
The Supreme Council of National Defense (CSAT) needs to clear the deal.