Total Inks Khan Asparuh Black Sea Exploration Contract With Bulgaria

Total SA and Bulgaria have signed a formal agreement for the exploration and development of the Khan Asparuh block located in the Black Sea.

The five year contract will see Total (as to 40 percent) and consortium partners OMV AG and Repsol SA (each as to 30 percent) explore for gas and oil deposits in the block which spans over 14,400 square kilometers.

“Today’s agreement is a huge step toward Bulgaria’s diversification of energy sources,” Prime Minister Boiko Borissov said after the signing. “It will ensure that future generations will have access to cheaper fuel.”

Total and its partners will pay a 40 million-euro bonus to the government as part of the agreement, as well as annual concession fees,

Patrick Pluen, Total Vice President for Exploration and Production, estimated exploration costs over the five years at around 100 million euros. Work will include drilling of two wells at 5,000 meters and 6,000 meters, below sea level.

“It is a high-risk exploration,” Pluen said. “In our estimates, we can find either oil or gas. There is a probability that we’ll find significant accumulations. In the next year we’ll acquire a seismic image of the area and then we will drill wells and will have a better view and understanding.”

Bulgarian Energy and Economy Minister Delyan Dobrev said he expects the natural gas deposits to be no less than that the discovery of a major gasfield off Romania’s Black Sea coast back in February.

Preliminary estimates according to OMV, which discovered the field along with ExxonMobil, estimated the resource reaxhing upwards of 84 billion cubic meters, which may be its biggest gas find in the Black Sea.

“The Bulgarian block is three times bigger, so we hope these will be the minimal quantities,” Dobrev said earlier.

The Romanian find is now the subject of talks with Bulgaria, since part of the field lies in disputed waters.

Related Reading: Black Swans in the Black Sea? Romania’s Gas and the Southern Corridor