Bulgaria signs offshore oil exploration deal with France’s Total

Written by on August 29, 2012 in Business - No comments

Bulgarian Economy and Energy Minister Delyan Dobrev signed on August 29 the contract granting French firm Total a five-year exploration licence for the Khan Asparoukh 1-21 block on the Bulgarian Black Sea shelf.

Total, which will prospect the area together with Austria’s OMV and Spain’s Repsol, is expected to invest more than one billion euro over the period, mainly in two high-depth oil and gas wells. Total has agreed to pay 40 million euro of its fee up front, Dobrev said.

With that payment, the Economy Ministry’s concession revenue this year will reach 180 million leva, three times the target set by the Finance Ministry, Dobrev said. Part of the money, as much as 30 per cent, could be set aside for a cultural heritage fund that would be used to finance archaeological digs, he said.

Neighbouring Romania estimates gas reserves ranging from 40 billion to 80 billion cubic metres in its own Black Sea shelf near the Khan Asparouh block, which Bulgaria hopes will hold comparable amounts. If those hopes are proven true, it would go a long way towards ensuring Bulgaria’s energy independence, Bulgarian officials have 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, and it is hoped that the Khan Asparoukh field will result in a drastic increase in domestic production. Bulgaria’s annual gas consumption is about three billion cubic metres.

The Khan Asparoukh 1-21 block covers an area of 14 440 square km and expectations are not just for gas finds, but oil too, Dobrev has said in the past.

(Photo: veetec/sxc.hu)

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