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Romania, Certain adoption of a positive investment decision for the Neptun Deep gas block

Making a final positive investment decision for the Neptun Deep gas exploration perimeter, the most important project in the Romanian Black Sea region, seems inevitable, given that the two shareholders, OMV Petrom and Romgaz, will invest about 1.2 billion leva in the project by the end of this year (244 million euros). At the same time, the two companies submitted binding requests to increase capacity at the entry point to the national gas transmission system to be produced from 2027, for which a bank guarantee of 88 million euros was issued.

The project operator, OMV Petrom, has indirectly confirmed that it will make a favorable investment decision for the Neptun Deep project. Namely, the company has announced total investments in research and production of around 590 million euros for 2023, including Neptun Deep.

In addition, Transgaz officials confirmed that the two companies submitted binding requests to increase capacity at the entry point to the national transmission system. They were also required to submit a bank guarantee of 88 million euros, which is in the process of being delivered, according to Transgaz officials. This means that money would be lost if companies decide not to use this capacity.

Investments of 244 million euros planned for this year represent only 6 percent of the total investments in the Neptun Deep block, which are currently estimated at 4 billion euros.

Global inflation and high competition for the procurement of oil services as a result of the explosion of exploration activities (stimulated by high prices) could increase the investment costs of the project and is one of the unknowns in the process of making the final investment decision.

OMV Petrom states that at the moment it has not changed its assessment from the Development Strategy until 2030, according to which it should invest up to 2 billion euros in the Neputun Deep project and that it will make a final investment decision in the middle of this year.

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