Left without Gazprom, Austrian OMV will drill a large field in Romania

Having been left without Russian gas since November 16, Austrian OMV is launching a campaign to develop a large field in the Romanian sector of the Black Sea. The development has been postponed for many years due to the unfavorable tax legislation of Romania.

The Transocean Barents semi-submersible drilling platform, contracted by the Austrian OMV, has arrived in Constanta, Romania. In January, it will begin a drilling campaign on the Deepwater Neptune block, whose reserves are estimated at 100 billion cubic meters of gas.

"The arrival of the drilling rig marks an important step on our way to developing the first deepwater offshore gas project in Romania together with our partner Romgaz. Neptun Deep is a strategic project for Romania and the EU," said Cristina Vercere, CEO of OMV's Romanian company, OMV Petrom.

In order to pass under the bridges in the Bosphorus Strait, a drilling rig was dismantled on a drilling rig. In Romania, it will be returned to its place, after which the drilling campaign will begin.

The Deepwater Neptune block belongs equally to OMV and the Romanian state-owned company Romgaz. A large deep-water deposit was discovered in 2011 and planned to be launched in the late 2020s. However, the Romanian parliament tightened the tax legislation for oil and gas companies, and OMV postponed the adoption of a final investment decision indefinitely. In 2022-2023, the tax regime was changed. OMV reports that they plan to invest 4 billion euros together with Romgas and receive the first gas in 2027.

Annual production is estimated at 3 billion cubic meters. On the one hand, this will be the first time for Europe that a large field has been put into operation over the past few decades. On the other hand, in Romania itself, production at old fields is declining.

Until recently, OMV remained one of Gazprom's largest customers in Europe. Annual deliveries amounted to 5.7 billion cubic meters per year under the Austrian contract. However, in 2022, Gazprom stopped shipping gas under a German contract and OMV filed for Stockholm arbitration. In November, as the company stated, the arbitrators awarded it 230 million euros in compensation, which OMV decided to withdraw from current payments under the Austrian contract. Due to non-payment, Gazprom stopped deliveries on November 16, although flows to Austria have not changed. The dropped volumes are sold at the Austrian Baumgarten hub by other partners of the Russian company. Reuters reported on Slovak SPP.