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23.02.2016 14:08- From left to right: Kamelia Slaveikova, Eileen Wilkinson, Boiko Borisov, Temenuzhka Petkova
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The Bulgarian Ministry of Energy and Shell Exploration & Production (LIX) B.V. signed Tuesday a contract for deep water offshore oil and gas exploration in the Silistar block. The exploration site is situated in the Exclusive Economic Zone of Bulgaria in the Black Sea.
The duration of the contract is five years, with the possibility for the company to extend it two times with two years each time. The expected investment is EUR 18.6 m, while Shell is to pay the Bulgarian state a bonus of EUR 4.9 m after the signing of the contract, Bulgarian energy minister Ms Temenuzhka Petkova said.
The planned 2D and 3D seismic tests however are to start after Shell acquires all the necessary regulatory and environmental permits, Eileen Wilkinson, regional VP of Shell, stated. Ms Wilkinson declined to comment on the timeframe of further activities, as the initial evaluation would take a few years to be completed.
“Once we have all the approvals, only then we will commence our geological evaluation – studies and seismic acquisition. That will take some years and, as the minister of energy said earlier, we have five years in which to do our initial exploration phase. It is too early to speculate on the timing beyond doing that geological evaluation”, Wilkinson said.
Ms Kamelia Slaveikova, CEO of Shell Bulgaria, who was also present at the ceremony deemed the signing as a crusial point of the company’s history in Bulgaria.
Local production and the planned Balkan gas hub
Connecting Bulgaria’s gas system to those of the neighbouring countries and the prospect for local oil and gas production are the basis for the Bulgaria’s energy source diversification, energy minister Petkova said. In her view the expected production from the Silistar block could also feed the planned natural gas hub in Bulgaria. The large-scale project under the name “Balkan” was announced in late 2015 and a work group between Bulgarian and European Commission experts is currently assessing its feasibility before pitching it to potential investors and partners.
Shell however is not the only international oil and gas company to delve into the Bulgarian offshore gas exploration field. In 2012 a consortium of Total, OMV and Reposol was granted a permit for research in the Han Asparuh Block, in the deep waters off the Bulgarian Black Sea coast. First exploration drilling in Han Asparuh is expected to take place by mid-2016, Ms Petkova said.
Bulgarian PM Boiko Borisv went on to give a positive outlook on the development of local oil and gas production in Bulgaria.
“There have been may sceptics to talk about it, but eventually Total, Repsol and OMV entered in the exploration of Han Asparuh, now we have Shell for Silistar. So, Han Asparuh, Silistar, Galata, Azerbaijan, the LNG terminal in Greece and, hopefully Russian import, we will have all those sources of gas for the Balkan gas hub. We need company of the scale of Shell, one that can invest, so that we could have five-six sources of gas for our gas system. Bulgaria has a great interest in this, as it involves transit fees”, Mr Borisov commented.
Borisov went on to elaborate that such projects would allow Bulgaria to invest in the upgrade of its gas transmission system so that it could up its transmission capacity.
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