Why the Black Sea is a hotspot for business? Aleksandrs Popovics, Senior Petroleum Economist at Wood Mackenzie, answers Globuc questions about trends and challenges in the Black Sea oil and gas industry.
How do you find the evolution of the Black Sea region in terms of upstream development in comparison with other strategic areas in Europe (eg. North Sea, Mediterranian Sea, Caspian Region)?
Much of the Black Sea basin remains less explored than other strategic areas in Europe. Most exploration to date has focused on the shallow water areas but the 2012 Domino field discovery in Romania proved potential of the deep water. There are a number of factors that impede upstream development of the Black Sea, most notably taxation and political instability, challenging monetisation options and a small service sector.
Should the Black Sea region be in the focus of business development managers?
We estimate the Black Sea basin holds 1.3 bn boe of yet-to-find (YTF) reserves. It is the 6th largest offshore basin in Europe by YTF volume. As such, we expect it could start to emerge as an exploration hotspot.
What are the main projects the companies should keep an eye on in the region?
Two main projects to be watched are both in Romania – the larger deepwater Domino field operated by ExxonMobil and the smaller shallow water Ana and Doina project operated by Black Sea Oil and Gas. Development challenges differ due to locations and sizes of the projects.
How do you see the development on onshore and offshore projects in the next 10 years?
Black Sea countries have mature onshore production. Some additional volumes could become available using enhanced oil and gas recovery and deeper drilling. However, this will be expensive and commerciality could be affected by the current tax terms. Deepwater Black Sea exploration remains promising, and potential offshore discoveries could achieve better returns if developed in clusters rather than on the stand alone basis.
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Senior Petroleum Economist
will be speaking at Black Sea Oil & Gas
Most exploration to date has focused on the shallow water areas but the 2012 Domino field discovery in Romania proved potential of the deep water.
Deepwater Black Sea exploration remains promising, and potential offshore discoveries could achieve better returns if developed in clusters rather than on the stand alone basis.