In Q1 2022, Romgaz Romania signs the contract to take over 50% of Exxon Mobil’s participation in the Neptun Deep offshore gas project on the Black Sea

By Edwig Ban
Sources close to the energy sector inform that the Romanian state gas producer Romgaz (SNG.BX) will pay up to $ 1.07 billion to Exxon Mobil (XOM.N) for the 50% participation in an offshore gas project on the Black Sea.
The other half of the Neptun Deep offshore project is owned by the Romanian OMV Petrom (ROSNP.BX), the majority controlled by the Austrian OMV (OMVV.VI).
In the next period, the transaction will have to obtain the agreements of the Supreme Council of National Defense (CSAT) and the National Agency for Mineral Resources (ANRM).
At the same time, for the investments in the Black Sea gas perimeters to start, it is necessary to modify the offshore legislation, so that the investors benefit from the fiscal facilities necessary to recover the investments and to ensure long-term predictability of the activity. The Minister of Energy, Virgil Popescu, declared the other day that at the beginning of the Parliament session (February) the governing parties agreed that the amendment of the Law for offshore investments will be on the priority agenda.
We remind you that in the middle of December 2021, the Extraordinary General Meeting of Romgaz Shareholders approved the takeover of ExxonMobil’s 50% stake in the Neptun Deep deep gas project.
“In the meeting of the Extraordinary General Meeting of Shareholders of SNGN Romgaz SA was approved the acquisition transaction by the Company of all shares issued by (representing 100% of the share capital of) ExxonMobil Exploration and Production Romania Limited holding 50% of the acquired rights and obligations through the Concession Agreement for oil exploration, development and exploitation in the perimeter of the XIX Neptune Deep Water Zone “, it is shown in a document of the Romanian company.
At the same time, it was approved the conclusion of the sale-purchase contract of all the shares issued by (representing 100% of the share capital of) ExxonMobil Exploration and Production Romania Limited, which is to be concluded by S.N.G.N. Romgaz SA, as buyer, with ExxonMobil Exploration and Production Romania Holdings Limited, ExxonMobil Exploration and Production Romania (Domino) Limited, ExxonMobil Exploration and Production Romania (Pelican South) Limited, ExxonMobil Exploration and Production Romania (Califar) Limited and ExxonMobil Exploration and Production Romania (Nard) Limited, as sellers.
Also, in the meeting of the Ordinary General Meeting of Shareholders, it was approved the contracting of loans from one or more credit institutions, in a total amount of 325 million euros, in order to cover a part of the purchase transaction price by S.N.G.N. Romgaz S.A. of all shares issued by Exxon Mobil Exploration and Production Romania Limited.
The Minister of Energy specified that 10 billion cubic meters will be extracted from the Neptun Deep perimeter annually, given that Romania’s consumption is around 12 billion cubic meters at present. Romania’s gas production (mainly onshore) is now still around 10 billion cubic meters but is expected to decline in the next period, as some tanks run out.
Romgaz and OMV Petrom are not the only companies investing in the Romanian Black Sea area. Black Sea Oil and Gas is about to start production from another perimeter. Initially, the gas extraction should have started this year, but some works were delayed, the minister explained. “I think they will start pumping gas in the first quarter of 2022… One billion cubic meters will be produced, ie 8-9% of Romania’s consumption,” said Virgil Popescu.