After being cut off from Russian gas supplies since November 16, Austrian energy company OMV is ramping up efforts to develop a major gas field in the Romanian sector of the Black Sea. The project, which has faced delays for years due to Romania’s unfavorable tax laws, is now set to move forward with the arrival of the Transocean Barents semisubmersible drilling platform in Constanta, Romania. The platform is scheduled to begin drilling in January on the Deepwater Neptune block, which holds an estimated 100 billion cubic meters of gas reserves.
Cristina Vercere, CEO of OMV Petrom, OMV’s Romanian subsidiary, described the drilling rig’s arrival as a significant milestone for the development of Romania’s first deepwater offshore gas project, a venture OMV is undertaking with its partner Romgaz. Vercere emphasized that the Neptun Deep project is strategic for both Romania and the European Union. The platform had to be dismantled in order to pass through the Bosphorus Strait, but it will be reassembled in Romania before drilling commences.
The Deepwater Neptune block is jointly owned by OMV and the Romanian state-owned company Romgaz. Although a large deposit was discovered in 2011, development had been delayed due to Romania’s strict tax policies on oil and gas companies. In recent years, Romania revised its tax regime, prompting OMV to reconsider the project and approve a final investment decision in 2023. Together with Romgaz, OMV plans to invest 4 billion euros in the project, with first gas expected by 2027. The field is expected to produce around 3 billion cubic meters of gas annually.
This project marks a significant development for Europe, as it is the first large gas field to be brought online in decades. For Romania, the project is crucial as production from older fields in the country has been steadily declining.
OMV had been one of Gazprom’s largest customers in Europe, importing around 5.7 billion cubic meters of gas annually under an Austrian contract. However, in 2022, Gazprom ceased deliveries under a German contract, prompting OMV to seek arbitration in Stockholm. In November, OMV won a 230 million euro compensation award, which it chose to apply to current payments under its Austrian contract. This non-payment led Gazprom to stop gas deliveries to OMV on November 16. Despite this, gas flows to Austria have remained unaffected, as alternative suppliers at the Austrian Baumgarten hub have stepped in to sell the displaced volumes, with Slovak company SPP reportedly involved in the transactions.
