Major Companies Find Bulgarian Black Sea Oil Bid Unattractive

Business » ENERGY | November 25, 2010, Thursday // 20:32
Bulgaria: Major Companies Find Bulgarian Black Sea Oil Bid Unattractive Photo by Sofia Photo Agency.

Major oil companies such as Total and Anadarko did not find the bid to explore for oil in the Bulgarian Black Sea attractive, Diana Yaneva from the economy ministry told Novinite.com (Sofia News Agency).

The bid was announced in March 2010 in the Official Journal of the EU for exploration in Bulgaria's southern Black Sea sector (so-called Silistar block).

The contest was initially thought to be exciting, with major companies like Total, Statoil, and Americans Anadarko expressing interest. But in the end, only four smaller companies actually applied. There were different reasons brandied by Bulgarian media for this development, including deadlines that were allegedly too short for a major companies, or the geological terrain being not the right kind.

According to Diana Yaneva, director of the Underground Resources and Concessions Directorate at the Bulgarian Ministry of Economy, Energy and Tourism (the entity in charge of bids for exploration and drilling permits), who spoke to this site, the actual reason was that the area did not seem lucrative.

"Major companies gave up because of unsatisfactory results in the initial investigations they conducted after the launch of the bid," said Yaneva.

She added: "Those are companies with considerable resources and their expectations are for a large deposit, in order to build infrastructure for processing and sale of end products. At this point no such deposit has been found in that area of the Black Sea."

Yaneva especially stressed on the fact that the energy ministry had led an extensive correspondence with the oil majors and that they have confirmed giving up "because of insufficient geological data and the big risk associated with the investment."

As a side detail, the Underground Resources director revealed to Novinite that the Silistar block had not been adequately carved out and as a result is non-homogenic, as it includes both shelf and deepwater areas. She specified that the officers responsible for this error have been fired from the ministry.

Among the companies who applied is Overgas, a Gazprom-controlled Bulgarian gas distribution company, which has already ventured in gas prospecting and drilling. Another is Prouchvane i Dobiv na Neft i Gaz (PDNG), the heir to the old state-owned oil and gas communist-era company, which is the largest – and until recently the sole – Bulgarian extractor of hydrocarbon fuels (and is owned by the Chimimport conglomerate).

The Bulgarian government is expected to vote to determine the winner from the bid within the next couple of weeks.

For a full report on recent oil developments in the Black Sea, read HERE.

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Tags: Ministry of Economy, Anadarko Petroleum Corp., Total, Black Sea, oil, Overgas, PDNG

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