Bulgaria’s upstream gas ambitions at crossroads

Bulgaria's plan to develop the large Han Asparuh gas field in Bulgarian Black Sea waters is at a key turning point, as Romania's OMV Petrom seeks a new partner following TotalEnergies' exit from the project.

OMV Petrom has replaced TotalEnergies — which had a 57pc stake in the project — as operator, OMV Petrom said in February. The exploration agreement's initial term expires in November this year but is expected to be extended by another two years, Kostadin Sirleshtov, managing partner at law firm CMS in Bulgaria, said at the Black Sea oil and gas conference in Vienna last week. Han Asparuh is located close to the Neptun Deep project in the Romanian Black Sea sector, on which OMV Petrom and Romgaz took a final investment decision in mid-2023. They expect first gas from Neptun Deep in 2027.

OMV Petrom is unlikely to be alone in the block for long, Sirleshtov said. But Sirleshtov has his doubts that Bulgaria's state-owned energy holding company BEH will join the project. BEH lacks experience in the upstream sector, making it difficult even to assess the exploration and development risks involved, Sirleshtov said.

Three under-development fields in Bulgaria, including Han Asparuh, have potential to produce a combined 20bn m³/yr of gas over the next decade if developed, delegates at the conference heard.

Bulgaria should learn lessons from offshore projects in nearby countries such as Romania and Turkey and should ensure that fiscal stability is in place before a discovery is announced, Sirleshtov said.

Some regulatory changes under consideration aim to streamline progress on upstream projects. There are plans to unite exploration and production licences under one agreement, shortening the period between exploration and production. There is a further plan to shorten environmental impact assessment procedures and the appeals process for them.

The Bulgarian government's recent appointment of a caretaker energy minister — Vladimir Malinov, the former head of gas system operator Bulgartransgaz — might lead to progress on other upstream projects. The procedure for tendering the Hen Tervel offshore block neighbouring Turkey is with Malinov for signing off. Sirleshtov expects it to be tendered by the end of this year. Exploration is yet to start on Bulgaria's largest onshore block, Vratsa West, because of environmental issues, Sirleshtov said.

Bulgartransgaz plans further midstream investments. The operator in March launched a procurement tender for the vertical gas corridor, which aims to increase transit capacity to the Greek and Romanian borders.

Bulgarian spot gas trading liquidity has increased recently, although the lack of clearing services hampers forward liquidity, traders have said. Some 89 firms have Bulgarian gas trading licences.

By Natasha Fielding