A new partnership in oil and gas exploration will accelerate exploration in the Black Sea offshore area, particularly in the Khan Asparuh block, which is located in the country's exclusive economic zone in the deep offshore basin.
The new deal includes NewMed Energy Balkan, a subsidiary of the Israeli company NewMed Energy, in addition to the existing major exploration participant OMV Petrom. According to the agreement, the two parties will own equal stakes, with OMV Petrom operating the project through OMV Offshore Bulgaria. The transfer of the Israeli unit's stake has been approved by Bulgaria's Council of Ministers.
The new step in Bulgaria's drive for its own production was also commented on by Energy Minister Zhecho Stankov, who said he was counting on this cooperation to unlock the block's production potential. The Israeli company's participation is news because, until now, there had been no public indication that it would participate after previous European companies such as TotalEnergies and Repsol withdrew from the project.
According to Yossi Abu, who is CEO of NewMed Energy Balkan, the company believes "in the potential of operations in Bulgaria, both because of the high probability of discovery and the proximity to key markets." The entry of fresh capital into the project means that new exploration drilling worth tens of millions of leva is imminent.
Capital Weekly reached out to OMV Petrom for further comment, but the company declined.
The hope for gas
In recent years, Bulgaria has attempted to put its sluggish policy on offshore hydrocarbon exploration in the Black Sea into motion. Two years ago, TotalEnergies said its best hopes of finding natural gas were focused on the eastern part of the Khan Asparuh and that it was seeking support for a well that would cost between USD 80-100 million. The block itself is 13,700 square meters and is located next to the large Romanian Neptun field and adjacent to Turkey's Sakarya field, which is believed to be the largest in Turkey's history.
The Khan Tervel block, which covers an area of just over 4,000 sq km and is located south of Khan Asparuh, had seen a series of unsuccessful tenders for gas exploration. Then, late last year, it emerged that, in the latest attempt, four companies had bought the papers, two had submitted bids and Shell Exploration and Production (96) B.V., a subsidiary of Shell, would be awarded the permit. It was selected on account of its proposed work and investment program, environmental and training funds, and a proposed bonus for the state, which was not announced. The work program provides for comprehensive geological and geophysical work, including new 3D seismic surveys, seismic data processing and interpretation, area potential assessment and more. However, at present, the company is not yet included in the list of exploration permit holders, which means that the procedure has not been completed.
The beginning of the studies
Bulgaria has been hoping to develop domestic gas production since 2012 when a consortium composed of French Total, the Austrian OMV and the Spanish Repsol received a permit for oil and gas exploration and prospecting in the Khan Asparuh block. In return, the companies committed to invest 1 billion euro in exploration activities and paid a record 40 million euro bonus to the government.
During the first two years, the consortium conducted a seismic data collection campaign in the western part of the block. On this basis, three exploration wells - Polshkov-1, Rubin-1 and Melnik-1 - were drilled between 2016 and 2019, which showed the existence of an oil system in the deep waters of the Black Sea, but no proof of commercial quantities was found.
The consortium subsequently turned its attention to the eastern part of the block, where it made a second 3D acquisition campaign in early 2020. Analysis of the data from this actually warranted exploration drilling. In mid-2023, the chairman of the parliamentary energy committee at the time, Delyan Dobrev, announced that between 210 bcm and 510 bcm of gas could be expected there, and Total is betting on two sections - Vineh and Krum. He even proposed that Bulgarian Energy Holding enter the project as a partner, but the idea did not materialize. Less than a year later, in the spring of 2024, the French pulled out and transferred their 57.14% stake to their Austrian-Romanian partner.
A new partnership in oil and gas exploration will accelerate exploration in the Black Sea offshore area, particularly in the Khan Asparuh block, which is located in the country's exclusive economic zone in the deep offshore basin.
The new deal includes NewMed Energy Balkan, a subsidiary of the Israeli company NewMed Energy, in addition to the existing major exploration participant OMV Petrom. According to the agreement, the two parties will own equal stakes, with OMV Petrom operating the project through OMV Offshore Bulgaria. The transfer of the Israeli unit's stake has been approved by Bulgaria's Council of Ministers.
