Petrom sells Russian upstream licenses

Seller and buyer agreed not to release sale price and terms of the transaction. Ring Oil has 40 mn boe of recoverable oil and gas reserves under Russia's C1 and C2 classifications, and 970 mn boe of oil and gas reserves under the C3 classification.

Petrom began exploring in Russia after it bought into Ring Oil in 2006. The Lugovaya-1 exploration well in the southern Saratov region (Kamenski license) showed test flows of 2,500 bpd of light sweet oil in one zone and two additional gas bearing formations, Petrom said in August 2009. Petrom's parent OMV said in August it has a potential buyer for the Russian assets, after saying in May it plans to switch focus to the Caspian region and the Middle East.

The move confirms the intention of Petrom's and OMV's management to focus on the Caspian Region for E&P activities that can be brought into connection with the group's activities in Turkey and the Nabucco pipeline. As the transaction value was not disclosed and we do not suppose that Petrom made a sizeable profit on the sale, we qualify the news as neutral.

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