France’s Total granted oil, gas exploration licence in Bulgaria

Written by on July 12, 2012 in Business - No comments
Photo: veetec/sxc.hu

French oil and gas group total was awarded a licence to prospect for fossil fuels in Bulgaria’s exclusive economic area of the Black Sea, the Cabinet said on July 12.

Total will work together with Austria’s OMV and Spain’s Repsol, Economy Minister Delyan Dobrev said.

The Government decided to open a tender for the Khan Asparouh 1-21 block in October 2011, targeting large Western companies. Total won the tender in competition with ExxonMobil and UK’s Melrose Resources, which has three other exploration licences for areas of Bulgaria’s Black Sea shelf.

“Domestic extraction will drastically lower the price of gas and help us in future negotiations for gas imports,” Prime Minister Boiko Borissov said.

Bulgaria imports most of its natural gas from Russia via three companies that are partially or fully owned by Gazprom. The issue of gas imports prices has always been a sensitive one for Bulgaria, which relies heavily on Russian deliveries, and negotiations with Gazprom tend to get very protracted.

Gas extracted locally costs about 40 per cent lower than imports, according to Dobrev. “This is our hope for diversification [of energy sources],” he said.

Bulgaria’s annual gas consumption is about three billion cubic metres. While the size of possible reserves under Bulgaria’s Black Sea shelf is unknown, Romania’s shelf reserves are estimated at between 40 billion and 80 billion cubic metres. A comparable find under the Bulgarian part of the Black Sea seabed could lessen the country’s reliance on imports for decades.

The Khan Asparouh 1-21 block covers an area of 14 440 square km and expectations are not just for gas finds, but oil too, Dobrev said. Concession fees for extraction will be decided at a later date and will depend on the size of the oil and gas reserves, he said, as quoted by Focus news agency.

(Photo: veetec/sxc.hu)

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