The deepwater western Black Sea could provide a new source of gas for Eastern Europe, according to analyst Wood Mackenzie.

The effect of OMV Petrom’s Domino discovery, made in the Neptun block offshore Romania in early 2012, means that deepwater drilling is about to move up a gear, it said, with as many as 10 wells expected to be drilled by 2018.

Interest in the region’s deepwater gas resources is being driven by the supply diversification concerns of the Central Eastern European (CEE) countries, with demand forecast to grow considerably.

Chris Meredith, upstream research analyst for WoodMac, said, “We’re on the cusp of a ramp-up in deepwater drilling in the Black Sea. Based on commitment wells and submitted drilling programmes, we anticipate 10 wells will be drilled in the next five years, compared with just seven to date.”

He added, “There’s no doubt that Domino had been transformative for the region, stimulating interest in the Black Sea. While the field has yet to be fully appraised, we forecast that production could come onstream by 2019. The size of the discovery is a strong indication of the potential for further significant gas discoveries in the region.”

With rising demand and falling production, countries around the Black Sea are facing increasing gas import requirements. At present more than 90% of its imported gas comes from Russia, under contracts with Gazprom.

WoodMac says that the cancellation of the Nabucco pipeline has increased the urgency for CEE countries to find an alternative solution for diversification of gas supplies, given that the Caspian export route of the Trans Adriatic pipeline (TAP) bypasses many of the countries adjacent to the Black Sea.

With exploration well costs of more than US $100 million and no existing deepwater infrastructure and supporting service sector, the analyst says it’s “reassuring” that the region has attracted companies including ExxonMobil, Total, Shell, OMV Petrom and Repsol. “These companies have the expertise, resources, capability and credibility to give us confidence in the outlook for the region. Deepwater exploration spending by ExxonMobil and Petrom in Romania through to 2015 could reach $1 billion,” said Meredith.

Domino sits around 170 km offshore in a water depth of about 1,000 m (3,281 ft), and is operated by OMV Petrom with ExxonMobil its joint partner. Recoverable reserves are cautiously estimated at up to 3 Tcf of gas.

  • OMV has confirmed that partner ExxonMobil plans to spud an appraisal well (Domino-2) by mid-2014, to be followed by a wildcat well (Neptun Deep) during the second half of the year. The discovery well hit 71 m (233 ft) of net gas pay, and the company is estimating that the field could produce up to approximately 630 MMcf/d of gas.

The Neptun Deep well will follow a 3D seismic survey that has already been completed, with a drilling rig already secured for the campaign. A further well may also be spudded on the Neptun Shallow prospect, on which data processing of 3D seismic is ongoing. ExxonMobil and OMV each hold 50% in the licence.