Largest in decades: OMV Petrom hits a hat-trick with new crude oil discoveries

Romanian oil and gas company OMV Petrom has made three new oil and gas discoveries, including its largest in decades.

The three finds in southern Romania were drilled beteen June 2022 and April 2023 and together hold recoverable resources of more than 30 million barrels of oil equivalent, which amounts to around 75% of OMV Petrom’s 2022 production, the company said on Tuesday.

“Romania has been producing crude oil and natural gas for over 150 years, and under these conditions, identifying new resources requires a significant effort,” said the company’s head of exploration and production, Cristian Hubati.

“The new discoveries will contribute to reducing the decline of our production and to the continuity of the supply of essential products for the economy.”

The largest of the three discoveries was in southern Romania’s Verguleasa exploration area, where identified resources totalled around 20 million boe, the company’s largest crude find in decades.

This discovery is in the vicinity of another production area, which will offer synergies by facilitating a faster start of production, said the company.

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In the Targoviste exploration block, a find with 6 million boe was made.

Successful testing was carried out in April 2023 and preparations are under way for pre-exploitation work, the company said.

A third discovery, in the Targu Jiu exploration block, holds natural gas resources of around 7 million boe, equivalent to almost one-third of Romania’s natural gas production in 2022, the company added.

Tax hike

The discoveries will help offset OMV Petrom’s recent announcement about having to pay additional “solidarity contribution tax” to the Romanian state.

Romania’s parliament approved the new tax on 12 May, applying to companies that produce and refine oil, whereby they must pay 350 new leu ($326) for each tonne of oil processed in 2022 and 2023.

As a consequence, OMV Petrom estimates a solidarity contribution of 1500 million new leu ($326 million) for the fiscal year 2022, to be paid at the end of June 2023.

For the first quarter of 20223, the amount of the solidarity contribution is estimated at 380 million new leu. The contribution for the full year 2023 will be paid at the end of June 2024.

OMV Petrom, a subsidiary of Austria’s OMV Group, also holds a 50% stake in the Neptun Deep gas field in Romania’s Black Sea waters.

The company filed for a declaration of commercial last December for the field, which holds estimated recoverable reserves of between 42 billion and 84 billion cubic metres of gas, in water depths of up to 1700 metres.