BSOG hails first gas from Midia Gas project
Private equity-backed Black Sea Oil & Gas announced on June 15 it had launched production at the Midia Gas Development (MGD) project in the Romanian Black Sea.
MGD, which comprises the Ana and Doina fields and has been undergoing development for years, will deliver 0.5bn m3 of gas this year, with output set to ramp up to a 1bn m3 annual average during the first three years of its 10-year life. It is the first new offshore field in Romania to come online in the last 30 years.
The Ana and Doina fields were among a number of offshore gas discoveries made in Romania in recent decades, but development of the country's Black Sea resources has been stifled by changes in legislation in late 2018 that among other things increased taxes on projects and impose restrictions on where and at what price their gas can be sold. The government is now working to undo some of these changes to encourage investment.
"It has been a long and challenging journey to finally reach this significant milestone for the country," BSOG CEO Mark Beacom said in a statement. "A number of firsts were achieved in Romania, all during a global pandemic and, more recently, conflict in Ukraine that threatened to impact Black Sea operations."
BSOG, which counts private equity group Carlyle and the European Bank for Reconstruction and Development among its shareholders, owns a 70% interest in the concussion containing Ana and Doina, while partners Petro Ventures Resources and Gas Plus Dacia have shares of 20% and 10% respectively.
MGD will cover up to 10% of Romanian gas demand, while also providing infrastructure that other Black Sea developers can utilise to further resources into production. The project's launch comes at a time when Romania and other EU countries are scrambling to find alternatives to Russian gas in the wake of Moscow's invasion of Ukraine.
Romania's other main offshore gas project is Neptun Deep, co-owned by OMV Petrom and ExxonMobil, although the latter is set to transfer its 50% stake to Romgaz shortly. The partners have not yet taken a final investment decision, having repeatedly delayed the move because of the new regulations. But Romgaz CFO Razvan Popescu told Bloomberg in late May that the company was eager to develop the field quickly in light of soaring gas prices in Europe, targeting first supply no later than 2026.