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Petrom and Exxon begin Black Sea drilling

Romania’s biggest oil company Petrom has once again joined forces with Exxon to drill a new deepwater well in the Black Sea, representing the third project of its kind.

The Ocean Endeavour rig is drilling the Pelican South-1 well around 155 kilometers offshore in the Romanian sector of the Black Sea, in the Neptun Block which Petrom and Exxon jointly hold.

The move is part of a search for resources that will hopefully result in the country gaining energy independence by 2020, and comes after Exxon and Petrom began drilling operations in the Neptun block in 2011.

In a statement, Petrom said the Pelican South-1 well will "test a new geological structure" on the Neptun Block.

Petrom and ExxonMobil already own the Domino-1 well, representing the first deepwater exploration well in Romanian waters. In 2012, Petrom’s majority owner OMV AG made a preliminary estimate for the Domino-1 well of gas accumulation ranging from 42 billion to as much as 84 billion cubic metres.

Currently, data from previous drilling of other wells in the Neptun block is being evaluated, but it is hoped that discoveries in the Black Sea may be a major boon to Romania's quest for energy independence, as the country currently imports around 20 per cent of its natural gas from Russia.

Gabriel Selischi, a member of Petrom’s board responsible for exploration and production, said he is "encouraged" by the positive results so far, in shallow and deep waters.

"However, much of the activity in the Black Sea deepwater area is of a frontier, pioneering nature, involving high investment risks and therefore requiring a stable investment framework," he added.

Romania is also aiming to boost royalties for any oil and gas produced from next year, from its current range of three per cent to 13.5 per cent, which would bring the fees closer in line with other EU countries and boost both budget revenue and fund investments.

Earlier this year, Prime Minister Victor Ponta confirmed that the taxes will differ for onshore and offshore fields, which will have a direct impact on investment plans in those areas.

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