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Razvan Popescu (Romgaz): I don’t see any long term problem in financing the Neptun Deep project
Romgaz will need a mix of financing for the Neptun Deep project, but this must be chosen with much care and it will not be a long term problem due the dominant position of the company on the Romanian market, stated the Romgaz general manager, Razvan Popescu at a conference regarding the market for mergers and acquisitions.
He said that at present, Romgaz and OMV Petrom estimate, in total, investments of about 4 billion euro in Neptun Deep, and said that the transaction through which Romgaz took over the shares of ExxonMobil in this project is a historic one for the Romanian state and it meant sustained work for a long period of time.
‘ It covered about one year and a half (…).And this transaction was based on the development strategy of the company, which wanted to increase its portfolio of resources and reserves both offshore and onshore. This transaction was included in the governing programme and observed all corporate agreements, of the Romanian state and of the company. For a state company, I don’t think it was fair to make only our company employees to work, without any experience in M&A and especially for such transaction. So, the use of consultants and help we received both from fiscal consultants, financial consultants, legal consultants were clearly defining for the transaction, as well as the number of hours of work and the effort included. We have to understand that one year and a half a team of Romgaz worked more than 12 -14 hours a day together with the foreign consultants to reach such results’ explained the manager of Romgaz at the conference organized by Deloitte and ZF.
He also mentioned the fact that, during the transaction, the consultants were Deloitte, for the evaluation side and for the fiscal part, for the British law, the Dentons Lawyers’ House and for the Romanian law, Suciu Popa.
The Romgaz manager said that, as regards financing, this went well, it was made in house and during the financing the company had judicial and financial consultancy.
When referring to other acquisition plans of Romgaz, he said that a company ‘of this level and this magnitude’ must be active on the market, must always look around.
‘If there is an opportunity to increase the resource and reserve portfolio which is in fact the basis for any company in oil&gas, it is normal to be open to opportunities, with a high degree of return of investments. So, clearly, we look around and if something is there, it should be viable economically and fit in the future plans we have for the development of Neptun Deep’ said the Romgaz head.
He also added that the company strategy is created with a view to continuing the development of the resource portfolio, but mostly on the mitigation of the effects of climate change with a focus on resilient hydrocarbons. That is why the company wants to invest in green energy and, at the moment, wants to start a solar park.
Romgaz finalised in August 2022 the takeover of ExxonMobil Romania, which owns 50% of the deep gas perimeter Neptun Deep.
OMVPetrom owns the rest of 50% of Neptun Deep and is the operator of the perimeter.
In the deep gas perimeter Neptun Deep could be 100 billion cubic metres of gas and the final decision for investments for their extraction could be taken at mid-year, according to Christina Verchere, CEO of OMV Petrom.