Larger than most of its neighbors in southeastern Europe, Romania has the most extensive natural gas reserves in the region along with major oil reserves in the southern and eastern Carp-athian foothills. Offshore exploration is finally beginning to bear fruit, as operators develop fields in the Black Sea.

Petrom SA, the largest Romanian oil and gas group, owns exploration licenses for 17 onhshore and offshore blocks in Romania, with a total area of 22,818.5 sq miles (59,100 sq km). State-controlled Romgaz Medias produced 206.6 Bcf of natural gas in 2008, providing one-third of the nation’s annual consumption.

Romania hosted the Black Sea Energy & Economic (BSEE) Forum in Bucharest, Sept. 30 to Oct. 2, 2009. Organized by the Atlantic Council, the BSEE Forum brought together representatives from government and the private sector to discuss regional issues. Romanian President Traian Basescu participated in the forum, continuing his government’s efforts to posit the country as a regional energy hub based on its strategic location and domestic resource base.

Pipelines

The European Union is backing the Nabucco natural gas pipeline project, which will connect European markets to Caspian resources. The US $11.2 billion pipeline, named after Babylonian King Nabucco (Nebuchadnezzar), is proposed to start in Turkey, near that country’s border with Georgia or Iran, and run through Bulgaria, Romania, and Hungary, ending at Baumgarten, Austria.

The Nabucco consortium is led by Austria’s OMV. Other shareholders include Bulgaria’s Bulgargaz, Germany’s RWE, Hungary’s MOL, Romania’s Transgaz, and Turkey’s Botas.

The project is an alternative to Russia’s South Stream pipeline project, sponsored by Gazprom, Eni SpA, South Stream AG, and Gaz de France. This US $10.5 to 15 billion project is planned to run from Russia across the Black Sea, through Bulgaria and Italy.

Ambassador Richard L. Morningstar, US special envoy for Eurasian energy, expressed support for the Nabucco project at the BSEE Forum.

Onshore

The first well was drilled in Romania more than 150 years ago. In 1857, some optimistic souls drilled wells at Bend, northeast of Bucharest, to 492 ft (150 m) with wooden rods and auger-type bits. [This was two years before Edmund Drake drilled his 69.5-ft-deep (21 m) well at Oil Creek, near Titusville, Pa.] According to the Museum of the Romanian Oil Industry, which was established in 1957 to coincide with the centenary celebrations of Romania’s oil industry, Bucharest was the first city in the world to be lit by oil (1859).

Fast forward to August 2009, when natural gas producer Romgaz tendered $54 million in drilling contracts.

Earlier this year, Toreador Resources Corp. announced that it was divesting its E&P assets in Romania, transferring petroleum rights to privately held, Houston-based independent Amromco Energy LLC and Romania-based Lotus Petroleum, in exchange for overriding net production interests.

Offshore

The first offshore drilling platform was installed in 1975, and exploration off Romania’s Black Sea coast began in 1976, but the first offshore oil production did not begin until 1987.

In February 2009, the International Court of Justice in The Hague published a ruling on the maritime border between Ukraine and Romania, ending a 40-year dispute between the countries. The ruling delimits the continental shelf area and exclusive economic zone for each country. The ICT recognized the rights of Romania over 3,745 sq miles (9,700 sq km), nearly 80% of the 4,633 sq miles (12,000 sq km) maritime area it was disputing with Ukraine.

Petrom operates five producing fields in Romanian waters: Lebada Est, Lebada Vest, Sinoe, Pescaru, and Delta. The company recently started production at its extended-reach Delta 6 and Lebada Vest wells on Histria XVIII block. Romania’s offshore production stands at 32,000 boe/d or about 18% of Petrom’s domestic production. Austria’s OMV holds a majority share (51.011%) of Petrom.

In late 2008, ExxonMobil Exploration and Production Romania Ltd. announced an agreement with Petrom to jointly explore the deepwater Neptun block (EPMag.com, Dec. 3, 2008). In August 2009, Petrom announced the start of the 1,158 sq miles (3,000 sq km) 3-D seismic acquisition program, using Fugro-Geoteam’s GeoCeltic seismic vessel, built in 2007.

Melrose Resources PLC farmed in to the Pelican XIII and Midia XV blocks off Romania, operated by Sterling Resources, for three-tiered payment of $12 million in 1Q 2009, another $12 million at first development project sanction, and future development costs of $58-$72 million.

Melrose is leveraging its operating experience in the Galata gas field development off Bulgaria, but Sterling will remain operating the Romanian blocks during the exploration phase. Midia XV contains the undeveloped Ana and Doina natural gas fields, which Melrose estimates to contain gross combined probable reserves of 288 Bcf.

Dinu Patriciu, founder and head of Romania’s second-largest oil group, Rompetrol SA, said oil reserves on the perimeter of the Black Sea could be 5 to 10 million tons and natural-gas reserves could be as much as 353 Tcf (Romanian Times reporting from the Black Sea Forum). Kazakhstan’s Kazakh KazMunayGaz acquired a 75% share of Rompetrol in August 2007.