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Romania's OMV Petrom to invest 70 mln euro in new offshore drilling campaign
Romania's top oil and gas group, OMV Petrom [BSE:SNP], said on Monday it plans to invest 70 million euro ($83.5 million) into a new drilling campaign in the shallow waters of Istria block in the Black Sea, seenews.com informs.
The campaign includes the drilling of two wells by the end of this year and a further two by mid-2018, OMV Petrom said in a press release.
The wells are planned to be drilled to depths of up to 2,000 meters below sea level.
"Although the producing fields in the Black Sea have a production history of 30 years, they continue to provide a significant part of the group’s total production,” executive board member and responsible for Upstream Peter Zeilinger said. "The current drilling campaign is in line with our strategy to exploit the full potential of our core portfolio and to make production more efficient in order to manage the natural decline."
Exploration in the Romanian continental shelf of the Black Sea started in 1969. The first hydrocarbon discovery was made in 1980, and the first production in the Black Sea started in 1987. Currently, OMV Petrom has exploration, development and production operations in the shallow waters (Istria block) and exploration operations in partnership with ExxonMobil in deepwater areas (Neptun Deep).
OMV Petrom's net profit tripled year-on-year to 1.21 billion lei ($311million/265 million euro) in the first half of 2017 on the back of increased oil prices, strong refining margins, higher demand for the company's products and strict cost discipline.
Sales rose 25% to 9.26 billion lei during January-June, spurred by significantly higher crude oil prices and higher volumes of petroleum products, natural gas and electricity but partially offset by lower average selling prices for natural gas. The downstream segment contributed 73% of total sales, downstream gas accounted for 24% and upstream for 2%.
In July, the group signed a contract for the sale of its Dorobantu wind park to Transeastern Power B.V. for 23 million euro. The transaction is pending approval from Romania's competition authority and is expected by end of this year. The main rationale for the sale is that wind power activities are not part of the strategic directions of the company.
Also in July, OMV Petrom broke ground on a new 60 million euro unit at its Petrobrazi refinery and inaugurated a new railway section inside the refinery following a 1.7 million euro investment.
Romania sold Petrom to OMV in late 2004. OMV holds a stake of 51.01% in OMV Petrom, the Romanian state, via the energy ministry owns 20.64%, Fondul Proprietatea owns 12.57%, and 15.78% is in free float on the Bucharest Stock Exchange and the London Stock Exchange.
Shares of blue chip OMV Petrom traded 1.20% higher at 0.2945 lei as at 1024 CET on the Bucharest bourse.