Direct Petroleum Bulgaria to Drill for Oil, Gas at Deventsi Field

State-owned gas supplier Bulgargaz will have the opportunity to buy cheaper gas extracted from the Deventsi deposit from the second half of 2013, according to Delyan Dobrev, Minister of Economy, Energy and Tourism.

Speaking Wednesday at the opening of a forum on investments and innovations in the energy sector, Dobrev made clear that natural gas extracted from the Deventsi field would be 35% cheaper than imported gas.

Dobrev announced that Bulgaria's Council of Ministers would take a decision Wednesday to grant a concession for oil and gas production in the northern village of Deventsi, Cherven Bryag municipality, to Direct Petroleum Bulgaria AD.

Bulgaria's Energy Minister explained that the company was scheduled to start oil and gas production at the Deventsi field in the second half of 2013, adding that the output was expected to equal the volumes produced by Melrose Resources, meaning that at least 10% of the domestic consumption of natural gas would be provided by a local source.

In the beginning of August, the Bulgarian government granted Melrose Resources a 6-year concession for natural gas extraction at the Kavarna Iztok field.

The gas field in question is located in Bulgaria's Black Sea continental shelf and the exclusive economic zone and has a total area of 3.97 square kilometers.

The Kavarna Iztok field is the third field developed by Melrose Resources in Bulgarian Black Sea waters after the Kaliakra and Kavarna fields.

"After 2020, the output will cover the greater part of our consumption" Dobrev emphasized.

He specified that Bulgargaz had signed a preliminary contract for purchasing 80% of the volumes of gas extracted from the field at a price which was 35% lower than the price of imported gas.

Dobrev assured that the step would guarantee greater stability of gas supplies in critical moments.

Bulgaria's Energy Minister also made clear that the adoption of the concession granting decision by the government would enable the company to start drilling and launch the construction of a gas pipeline connecting the Deventsi field to the national gas transmission grid.