Thursday, August 25, 2011

Romania May Auction Black Sea Oil, Gas Blocks Permits Next Year

Romania may auction exploration licenses for six oil and gas blocks in the Black Sea as early as next year after the global crisis kept investors away at previous auctions, said Alexandru Patruti, the head of Romania’s Mineral Resources Agency.

“We have six more blocks to award in the Black Sea, but we will definitely not organize auctions this year,” Patruti said in an interview from Bucharest yesterday. “We haven’t receive any offers for these blocks so far, probably because the drilling requires large investments and we are in a global crisis.”

The eastern European country has enough oil and gas reserves to secure its internal consumption over the next 15 year in a region fueled by Russian resources, according to anenergy strategy draft on the Economy Ministry website. The country, which still has about 159 billion cubic meters of proven gas reserves and 72 million metric tons of oil after more than 100 years of exploitation, hasn’t estimated the reserves from the Black Sea blocks.

Romania awarded exploration licenses for five offshore blocks last year. OMV Petrom SA (SNP), Exxon Mobil Corp., Petro Ventures Europe BV and OAO Lukoil are among the companies searching for oil and gas in the Black Sea waters.

The Balkan nation may also have a “significant potential” for developing shale-gas fields as the country already awarded a license to Chevron Corp. (CVX) to explore three blocks in the southeastern region of Dobrogea, Patruti said.

“Normally, when a country has conventional oil and gas reserves, it should certainly have unconventional reserves also,” Patruti said. “These are yet to be confirmed, but I assume there is a huge potential.”

Eastern Europe may hold as much as 7.1 trillion cubic meters of shale gas, according to Energy Information Administration’s estimates. Poland, which according to EIA, may have about 5.2 trillion cubic meters of shale gas, already granted 86 exploration licenses, while Ukraine, Hungary and Bulgaria are among other countries in the region which decided to press ahead with shale exploration.

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; 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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