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Romgaz's Popescu: Estimated cost of Neptun Deep project, up to 4 billion euro
The Neptun Deep project in the Black Sea is on the last stretch before the start of works, and the cost estimated together with the OMV Petrom operator is currently up to four billion euros, Romgaz CEO Razvan Popescu told a specialist conference on Tuesday.
"The project in the Black Sea is really on the last stretch before the works start. We are in the process of procurement, the last offers are being made, in order to start it. The operator, as far as I know, will make the final investment decision that Romgaz took on with the acquisition of the stake and the acquisition of the company owned by Exon Mobile. We are prepared for this. We have also budgeted for 2023 expenditure on the Neptun Deep project exactly on the basis of the data that we have assumed together with the OMV Petrom operator and we are ready in every respect to start works in the Black Sea. Romgaz has enough money to support the investment in the Black Sea. At the moment I do not think that this project should necessarily be financed from our own funds, given the fact that in general Oil & Gas projects are financed from debt and bond issues. We have the same plans at the moment. We are looking both at a collateralized loan; we can at the same time look at bonds. For me, from the beginning, the main idea was bonds with different maturities. We're looking at 5, 7, 10 years, probably in euros. I don't see a problem with that in terms of future investment, because even the production we have at the moment can support such an investment. The whole project, together with the operator, we have estimated, at this moment, to up to four billion euros," said Popescu.
According to the Romgaz representative, the company's plans are based on the rehabilitation of existing wells, in order to maintain the production level assumed in the company's strategy.
"We are relying heavily on everything that means rehabilitation operations of the wells to keep the production level within the limit assumed in the strategy, to counter the natural decline in production, given the advanced maturity of the gas reservoirs that Romgaz owns, as well as six deep wells, exploration wells that will be drilled in the Caragele perimeter in the next two years. These are six contingent wells and if they are successful, we still have three more wells budgeted. So, there would be a maximum of nine wells at this point in the deep offshore, which we have also budgeted and have in the plan," said Popescu.
In Popescu's opinion, the price of gas will not be as volatile as it has been in the last period.
"I think things this year will be much more settled than last year. Last year was, however, a turning point, where the paradigm has changed completely in terms of gas transmission in Europe. New supply routes have been found, countries have already made the whole arrangement domestically, so to speak, in terms of gas procurement. They have managed to supply themselves with gas from LNG sources, to find solutions other than the obvious one. I don't think the price will be so volatile either. We see even in the cold period, in February, that it didn't have extreme volatility, meaning we didn't see the prices we saw in the past. From our point of view, the ordinances that have created that security of supply to the domestic customer, mainly, have also played an important role on the market," mentioned Razvan Popescu.