BSOG completes the two well exploration drilling program in the Black Sea

Black Sea Oil & Gas SRL (“BSOG”) together with its co-venture partners announce the completion of a two well exploration drilling program in the XV Midia block, offshore Black Sea.

The drilling campaign was initially scheduled to start in Q4 2017, subject to rig availability. BSOG used the drilling unit “GSP Saturn” for this campaign. GSP Saturn is a four-legged, self-elevating jack-up, with a track record in world-wide operations. It was previously located in Rotterdam, the Netherlands.

The first well on the drilling program, Iulia-1, located in 73m water depth and 115km offshore, was spudded on 8 May 2018 and was drilled up to 2110m (Pontian formation). The second well, Paula-1, located in 88m water depth and 147km offshore, was spudded on 17 June 2018 and was drilled up to 1036m (Dacian formation). The Iulia-1 well did not encounter any (gas bearing) reservoir in the Upper Pontian, and the net pay and volume of dry gas discovered at Paula-1 did not prove commercially viable for testing. Paula-1’s results confirm the potential of the Dacian play which is already associated with Ana and Doina discoveries.

Mark Beacom, BSOG Chief Executive Officer, commented: “This offshore drilling campaign demonstrates the risks that are inherent in trying to find gas resources offshore in the Black Sea where the chance of success is no greater than 25%.  Successful efforts in this drilling campaign would have not only added gas resources to the country, thereby increasing its security of supply, but also made use of the infrastructure that is being proposed for the Midia Gas Development Project (“MGD”). Although the campaign did not deliver the expected gas discoveries, from an operational and HSE point of view, the wells have been successful.”

With respect to the MGD Project, the Concession Holders have been working towards a final investment decision for the last two years. Romania needs discoveries in the Black Sea to be brought forward to successful development in order to realize significant benefits, such as long-term high-quality employment, tax and royalties being paid to the state and energy security for the country. It will also contribute to the possibility of attracting other gas-related investments including gas fired power generation and petrochemical industries. The Offshore Law that was sent back to Parliament on 2 August 2018 needs to address the timely resolution of regulatory processes, gas market structure, fiscal regime and stability to bring these efforts forward to development. Assuming timely resolution for all these issues, BSOG plans to take its Final Investment Decision in Q4 2018.

Source: www.blackseaog.com