OMV optimistic on approving billion euro investment in Romania soon

The OMV logo is seen at a gas station in Vienna, Austria, June 12, 2018. REUTERS/Heinz-Peter Bader

VIENNA (Reuters) - Austria’s OMV is confident Romania will establish an acceptable framework for its Black Sea exploration project in the autumn and that it will be able to give the green light for a billion euro investment soon after, its upstream chief said.

The exploration of the Black Sea Neptun block is a joint venture between OMV’s Romanian subsidiary Petrom and U.S. major ExxonMobil and includes the first deep-water exploration well in Romanian waters.

In 2012, the firms said they had discovered 1.5-3 trillion cubic feet (42-84 billion cubic meters (bcm) of gas reserves at the ExxonMobil operated Domino-1 well, located around 170 km offshore.

OMV needs reliable framework conditions regarding taxes and royalties before it can give the final nod on such a major investment, Johann Pleininger told Reuters in an interview. “It would be a billion euro investment.”

OMV also needs the guarantee that it can export surplus gas, he said. Unlike other countries in the region, Romania is almost entirely energy independent.

The state imports less than 10 percent of its gas needs from Russia, with the rest produced locally, largely by state producer Romgaz and Petrom.

“I trust the Romanian government to make a sensible proposal that will be accepted by industry,” he said, adding he expected a decision in the autumn. The investment decision could follow “either this year or in the first quarter next year,” he said.

OMV owns a 51 stake in OMV Petrom and the Romanian state holds 20.6 percent.

Reporting by Kirsti Knolle; Editing by Mark Potter