Romania Insider

Media: Exxon may try to bypass RO Govt. in the sale of offshore gas project in Black Sea

US energy group ExxonMobil, which is currently negotiating the sale of its 50% stake in the biggest offshore gas project in the Romanian Black Sea – Neptun Deep, may try to bypass the Romanian Government in this process, local G4Media.ro reported.

One of the potential buyers of this stake is Russian group Lukoil, and the Romanian officials are worried that such a deal would jeopardize the country’s energy independence plans. Romanian economy minister Virgil Popescu warned ExxonMobil that it should respect the Romanian legislation that stipulates the Government must approve the license transfer.

“I have repeatedly stated publicly that a priority of my mandate is that the Black Sea exploitations be carried out as soon as possible. These operations also represent a strengthening of national security, not just economic development. I would like Exxon to continue operations in Romania. If they want to leave for internal reasons, I recommend that they comply with the Romanian legislation they used when they entered, namely Government decision for the license transfer,” Popescu wrote in a Facebook post on Monday, January 6.

“I would also like Romgaz, a company of the Romanian state, to be part of the future consortium that will operate this perimeter. The Black Sea operations are a matter of national security and I recommend that no one test us with this,” he added.

Prime minister Ludovic Orban also said on Monday evening that his Government would like the investor that will replace Exxon in this project to come from one of Romania’s partner countries within the EU and NATO. “Of course, we can’t decide for Exxon to whom they will sell their stake,” he added, according to Digi24.ro.

Polish oil and gas group PGNiG is also interested in taking over ExxonMobil’s stake in the Neptun Deep project and Romanian state-owned gas producer Romgaz could join it for a consortium. However, the negotiations with Lukoil are more advanced, according to sources in the energy sector quoted by Agerpres.

ExxonMobil could bypass the Romanian Government by selling its offshore firm in the Bahamas (ExxonMobil Exploration and Production Romania Limited Nassau) and not the firm registered in Romania that owns the license. Thus, the Romanian state would have no say in this transaction, according to G4Media.ro. Romania could challenge the transaction in international courts, but this would further postpone the project’s development.

ExxonMobil and Austrian-owned Romanian oil company OMV Petrom own stakes of 50% each in the Neptun Deep offshore gas perimeter. ExxonMobil, which bought its 50% stake in this project in 2008, also operates the project. The two groups have invested close to USD 1.5 billion in exploration activities to assess the economic viability of the project, after they found reserves of gas estimated at between 42 and 84 billion cubic meters, in 2012. Exxon and OMV Petrom have delayed the decision to move on with the commercial exploitation of the project after regulatory changes in recent years that negatively impacted energy companies and offshore development. Some of those regulations have been sweetened in the meantime.

[email protected]

(Photo source: OMV Petrom on Facebook)

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Romania Insider

Media: Exxon may try to bypass RO Govt. in the sale of offshore gas project in Black Sea

US energy group ExxonMobil, which is currently negotiating the sale of its 50% stake in the biggest offshore gas project in the Romanian Black Sea – Neptun Deep, may try to bypass the Romanian Government in this process, local G4Media.ro reported.

One of the potential buyers of this stake is Russian group Lukoil, and the Romanian officials are worried that such a deal would jeopardize the country’s energy independence plans. Romanian economy minister Virgil Popescu warned ExxonMobil that it should respect the Romanian legislation that stipulates the Government must approve the license transfer.

“I have repeatedly stated publicly that a priority of my mandate is that the Black Sea exploitations be carried out as soon as possible. These operations also represent a strengthening of national security, not just economic development. I would like Exxon to continue operations in Romania. If they want to leave for internal reasons, I recommend that they comply with the Romanian legislation they used when they entered, namely Government decision for the license transfer,” Popescu wrote in a Facebook post on Monday, January 6.

“I would also like Romgaz, a company of the Romanian state, to be part of the future consortium that will operate this perimeter. The Black Sea operations are a matter of national security and I recommend that no one test us with this,” he added.

Prime minister Ludovic Orban also said on Monday evening that his Government would like the investor that will replace Exxon in this project to come from one of Romania’s partner countries within the EU and NATO. “Of course, we can’t decide for Exxon to whom they will sell their stake,” he added, according to Digi24.ro.

Polish oil and gas group PGNiG is also interested in taking over ExxonMobil’s stake in the Neptun Deep project and Romanian state-owned gas producer Romgaz could join it for a consortium. However, the negotiations with Lukoil are more advanced, according to sources in the energy sector quoted by Agerpres.

ExxonMobil could bypass the Romanian Government by selling its offshore firm in the Bahamas (ExxonMobil Exploration and Production Romania Limited Nassau) and not the firm registered in Romania that owns the license. Thus, the Romanian state would have no say in this transaction, according to G4Media.ro. Romania could challenge the transaction in international courts, but this would further postpone the project’s development.

ExxonMobil and Austrian-owned Romanian oil company OMV Petrom own stakes of 50% each in the Neptun Deep offshore gas perimeter. ExxonMobil, which bought its 50% stake in this project in 2008, also operates the project. The two groups have invested close to USD 1.5 billion in exploration activities to assess the economic viability of the project, after they found reserves of gas estimated at between 42 and 84 billion cubic meters, in 2012. Exxon and OMV Petrom have delayed the decision to move on with the commercial exploitation of the project after regulatory changes in recent years that negatively impacted energy companies and offshore development. Some of those regulations have been sweetened in the meantime.

[email protected]

(Photo source: OMV Petrom on Facebook)

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