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Exxon and Petrom present Black Sea exploration project to Romanian president

Representatives of Exxon and Petrom met Romanian president Traian Basescu yesterday, to present offshore oil and gas exploration plans in the Romanian waters of the Black Sea.

At the end of 2008, the two companies had signed a 50-50 JV for the exploration and development of deep-sea hydrocarbon reserves in the Black Sea. The JV began exploration activities on the offshore Neptun block in August 2009. Currently, 17% of Petrom's Romanian oil and gas production come from offshore fields.

Given Exxon's thourough experience with such technologically demanding deep-sea projects, the president expressed his confidence in achieving good results. Petrom was represented by CEO Mariana Gheorghe and OMV's board member for E&P, Jaap Huijskes. The delegation was led by Exxon's exec. VP for E&P, Johnny Lee Hall.

In its last earnings report, OMV mentioned the Exxon-Petrom JV project as main upstream decision for 2011. Although OMV's CFO David Davies declined to comment on the potential cost of the exploration wells to be drilled in case of a positive outcome of the decision, he did confirm that it would substantially increase Petrom's exploration spendings. In our view, yesterday's meeting shows that the consortium is obviously intending to go ahead with the project. Although the exploration costs for Petrom will rise (we estimate by at least 20% from RON 187 mn in 2010), the reserve base and the production will definitely be expanded by the project, albeit in a mid- to long term only. We qualify the news as positive for Petrom.

Sursa: http://www.rciro.ro

Tags: petrom exploration president romanian project exxon black

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