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OMV Petrom continues Black Sea investments with EUR30M drilling campaign

posted onJuly 2, 2019
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Romanian energy giant OMV Petrom, kicked off a new offshore drilling campaign in the Black Sea. Two new wells, located in the shallow waters of the Istria block, will be drilled at over 2,000 meters below the seabed, in water depths of approximately 50 meters, by the end of the year, requiring investments of over EUR30 million euro ($34.1M), the Bucharest-based company announced on Monday (July 1).

This offshore drilling campaign comes in continuation of investment projects for offshore production in the shallow waters of the Black Sea. Between 2014 and 2018, OMV Petrom invested over 350 million euro, including drilling ten new production wells and sidetracks, upgrading the gas compressor system and modernising production facilities. 

“We are committed to Romania and we invest significant amounts to secure Romania’s energy supply. The Istria block in the shallow waters of the Black Sea has a history of over 30 years of oil and gas production. Although fields are mature and reached their plateau production years ago, sustained investment and adequate engineering solutions enable us to unlock additional resources and to mitigate production decline”Peter Zeilinger (pictured), member of OMV Petrom’s Executive Board responsible for Upstream said in a statement.

OMV Petrom CEO

(PHOTO: Peter Zeilinger, member of OMV Petrom’s Executive Board responsible for Upstream)

The largest South East European energy company started exploration in the Romanian continental shelf of the Black Sea in 1969. The first hydrocarbon discovery was in 1980, and the first production in the Black Sea started in 1987. Currently, OMV Petrom has exploration, development and production operations in the shallow waters (Istria block) and exploration activities in partnership with ExxonMobil in deepwater areas (Neptun Deep).

Oil and gas production in Istria block currently amounts to approximately 25,000 boe/day. In 2018, it accounted for around 17% of the Group’s domestic production. The production comes from five producing fields: Lebăda East (discovered in 1979), Lebăda Vest (discovered in 1984), Sinoe (discovered in 1988), Pescăruș (discovered in 1999) and Delta (discovered in 2007).

Southeast Europe's largest energy company and Romania's largest private investor 

OMV Petrom operates more than 200 commercial oil and gas fields onshore and offshore and its annual oil and gas output stood at 58.3 million boe (barrel of oil equivalent) in 2018. The company has a 4.5 mn tons annual refining capacity and also operates a gas power plant of 860 Mwh. 
On the oil products retail markets, OMV Petrom is present in Romania and neighboring countries through 790 filling stations under two brands – Petrom and OMV. 

OMV Petrom is the largest contributor to the state budget, having paid about 27.8 bn euro in taxes and dividends between 2005-2018 and the  largest private investor in Romania. During this period, it invested approx. 14.5 bn euro.  

In May, the company published its results for January – March 2019. Its consolidated sales  were up 11 percent over the same period of 2018 to RON 5.4 billion, while net profit rose 35 percent to RON 1.15 billion. The first three months report also reveals that Downstream Oil sales accounted for 70 percent of total sales, while Downstream Gas sales accounted for 28 percent and upstream sales of 2 percent. 

OMV Petrom HQ

(PHOTO: PetromCity, inaugurated in 2010, is located in northern Bucharest and serves as the company headquarters)

The Romanian national oil company Petrom was founded in 1991. In 2004, OMV Aktiengesellschaft, one of the largest listed industrial companies in Austria, acquired in a privatisation process 51.01% of Petrom. 

OMV  Aktiengesellschaft has a strong base in Romania and Austria as part of the Central and Eastern Europe core region as well as a balanced international portfolio, with Russia, North Sea, Middle East and Africa as well as Asia-Pacific as further core regions. The Romanian State, through the Ministry of Energy, holds 20.64% of OMV Petrom’s shares, investment fund Fondul Proprietatea owns 9.9985%, and 18.35% is traded freely on stock exchanges in Bucharest and London.

OMV Petrom share price

(OMV Petrom share price 01/07/2018-01/07/2019 Graph Source: BVB)

Petrom’s shares started trading on the Bucharest Stock Exchange (BVB) in 2001. The company has a weight of approximately 17% in BET (BVB's benchmark index) and a weight of approximately 30% in BET-NG index (the energy and related utilities sector index).

The sharpest increase has been registered at the beginning of 2005, when the share price boomed following the closure of the privatisation contract.

In 2016, the company's global depositary receipts (GDRs) admitted to trading on the London Stock Exchange.

OMV Petrom's shares closed up 0.25% in yesterday's trading session on the BVB.