Bloomberg News

Romania to Become Net Exporter of Gas by 2020, Sterling Says

February 05, 2013

Romania may become a net exporter of natural gas by 2020, with major discoveries possible this year amid forecasts that put the country’s total Black Sea reserves at 600 billion cubic meters.

“This is the most active year for exploration and drilling yet in the Romanian Black Sea,” Marc Beacom, general manager of the Romanian unit of Sterling Resources (SLG) Ltd. of Canada, said in an interview in the Bulgarian capital Sofia today. “I assume with all the drilling that will take place in 2013 we will see major discoveries.”

As much as $30 billion will be needed to develop the 600 billion cubic meters of reserves for their lifespan, Beacom said, citing a study by Purvin & Gertz Inc. Operating expenditures for production may reach $25 billion and tax and royalties to the government $45 billion, he said

“It’s basically a guess and until we start drilling wells and proving it, we won’t know what it’s going to be, it’s very early days,” Beacon said.

Exxon Mobil Corp (XOM:US) and OMV Petrom SA (SNP) said a year ago that they discovered what may be their biggest gas find in the Black Sea after exploring the Neptun block, located 170 kilometers (106 miles) off the Romanian coast at about 1,000 meters depth.

Reducing Interest

Sterling agreed in October to sell to Exxon and Petrom a strip of its Midia block that is next to the two companies’ Neptun block. The strip amounts to 11 percent of Sterling’s Midia and Pelican concession.

“We hope to complete the deal soon,” Beacom said. “They need to go through the steps of getting government approval.”

Sterling has no plans to sell any other blocks. The company is looking for partners to take a stake in the remaining blocks, and “has put out offers to companies to negotiate,” he said.

“We have prospective companies,” Beacom said, declining to identify them. “We want to reduce our interest in the remaining blocks. We’re too small a company and we just have too big an exposure.”

To contact the reporter on this story: Elizabeth Konstantinova in Sofia at ekonstantino@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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