According to a document sent to shareholders of natural gas producer Romgaz, who has agreed to buy ExxonMobil’s 50 % stake in Neptun Deep gas project in the Black Sea, the final investment decision on the project is expected within a year, most likely during the last quarter of 2022.
In terms of risks, Romgaz refers directly to anticipated amendments to the offshore hydrocarbon law. An improved version of the legislation would lead to increased profitability of the investment in the Neptun Deep project. If the amendments are delayed, there is a risk of postponing the adoption of the final investment decision and the start of investments in the development of the Neptun Deep perimeter and, implicitly, the start of exploitation of the deposit is delayed.
Romgaz will pay 1.06 billion dollars to take over a 50 % stake in the Neptun Deep offshore gas project in the Black Sea from the US company ExxonMobil. The Board of Directors approved the deal on 2 November, while its shareholders will vote on it on December 9. Romgaz will have to pay a deposit in the amount of 106 million dollars upon signing the share purchase agreement.
Romgaz will use loans to finance a part of the acquisition, in the amount of 325 million euros. It has already sent a call for offers to eight banks, four of which submitted bids in line with the company’s requirements and they were invited to resubmit a final, revised and improved binding offer. Romgaz is ready to repay the loan within five years, in quarterly installments.
This is by far the largest takeover deal ever signed by a Romanian company. The transaction is backed by the Romanian Government, which holds 70 % stake in the company. It comes at a time when Romania is struggling to ensure its energy independence in the context of rising gas and energy prices.
ExxonMobil announced in November 2019 its intention to sell the stake in the Neptun Deep project, which holds the largest offshore gas reserves found in Romania’s Black Sea section (40 to 80 billion cubic meters). Romanian OMV Petrom, a part of Austrian OMV Group, holds the remaining 50 % in the project. The two operators have invested close to 1.5 billion dollars in exploring the perimeter but have postponed a decision on its commercial exploitation due to the new offshore law adopted in late 2018.
