UPDATE 1-Bulgaria signs deal with Shell for deepwater oil and gas exploration

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SOFIA, Feb 23 (Reuters) - Bulgaria sealed a deal with Royal Dutch Shell on Tuesday to explore for oil and gas in an offshore block in the Black Sea in a bid to end its almost total dependence on Russian natural gas.

Shell won a tender for a five-year permit for deepwater exploration at the 1-14 Silistar block that covers 7,000 square km in September and pledged to invest 18.6 million euros ($20.5 million) in seismic surveys.

“The licence that we have been awarded today allows us to evaluate the potential for oil and gas in offshore Bulgaria. This process can be quite a long process and with much uncertainty,” said Eileen Wilkinson, regional director at Shell International Exploration and Production, after the signing.

French oil company Total, together with its partners Austria’s OMV and Spain’s Repsol, plans to start drilling for gas and oil in Bulgaria’s biggest offshore block in the Black Sea, 1-21 Han Asparuh, by June.

Silistar is near a block in Romanian waters where OMV has said it could produce up to 84 billion cubic metres of gas, raising Bulgaria’s hopes it will be able to exploit reserves off its coast to diversify its energy supplies.

Bulgaria is building a gas pipeline with Greece and is overhauling its gas transport network in the hope of becoming a regional gas hub and transporting Russian and Caspian gas, as well as gas it finds at its Black Sea blocks, to central Europe.

At present, the EU’s poorest country meets over 95 percent of its gas needs with imports from Russia’s Gazprom, which also come only via one route - a situation that its allies in Brussels and Washington want to see changed.

“Now nobody can say that Bulgaria is not working actively to diversify its supplies of oil and gas,” Prime Minister Boiko Borisov, who attended the signing, said.

$1 = 0.9094 euros Reporting by Tsvetelia Tsolova; Editing by Radu Marinas and Mark Potter