OMV Petrom SA (SNP) completed talks with the Romanian mineral resources regulator for an extension of its exploration licenses in the country and is waiting government approval, after giving up 25 percent of the initially contracted permits, according to a regulatory official.
Petrom, which has been in talks with the authorities to renew exploration licenses for 14 onshore oil and gas blocks, seeks a three-year extension of the permits and plans to stop exploring some blocks and portions of other blocks because of poor results it got during testing, Alexandru Patruti, the head of Romania’s Mineral Resources Agency said.
“We agreed with Petrom to extend some licenses until September 12, 2014,” Patruti said in a phone interview from Bucharest yesterday. “We signed the addendum to the contract and are waiting for the government’s approval,” he said, adding that the licenses Petrom gave up will be auctioned off “sometime in the future.”
The Romanian licenses, which OMV AG (OMV), central Europe biggest oil company, holds via Petrom, are due to expire on September 12 and were granted to Petrom before it was sold to OMV in 2004. A failure to renew the licenses or a renewal delay would have “a material adverse effect on Petrom’s business, results of operations and financial condition,” OMV said in May in the prospectus of a planned share sale.
Petrom’s “sustainable-exploration strategy has yielded tangible results and its ongoing projects absolutely need a three-year extension of the exploration period,” the regulator said in a draft law on its website. “It’s essential for Petrom to be granted adequate time to systematically explore the blocks to maximize its changes of obtaining oil and gas in a reasonable period of time.”
Petrom shares rose as much as 3.2 percent to 0.308 lei in early trading on the Bucharest Stock Exchange, the biggest intraday gain in almost two weeks. The shares were trading at 0.304 lei at 10:56 a.m. local time, while OMV shares rose 1 percent to 25.5 euros in Vienna.
Petrom, Romania’s biggest oil company, and Exxon Mobil Corp. (XOM) said in July they will start drilling the first deep-water well in the country by the end of the year or the beginning of 2012, after the government extended a block exploration concession in the Black Sea by five years.
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