Shell exploration secures offshore rights for Bulgaria as the European nation, like many, looks to reduce its energy reliance on nearby Russia.
The deal was signed Tuesday by the Bulgarian Energy Minister, Temenuzhka Petkova, who commented: “The agreement signed today make the most important step towards the diversification of sources of gas,”
Shell Exploration Secures Offshore Rights For Bulgaria
The deal secures Shell rights to explore in the Bulgarian waters of the Black Sea, for a duration of five years.
As part of the agreement, the oil and gas supermajor has agreed to invest €18.6 million (US$20.5m) over the five year term, with the aim of discovering gas in the 6893 sq km Bulgarian Silistar block.
A further €4.9 million (US$5.4m) will be paid as a ‘State Bonus’ to the Bulgarian Government, with the aim of building facilities along the country’s costal region, and expand Mining and Geology facilities at two universities.
Speaking at the agreement signing ceremony, Shell VP Middle East and North Africa exploration, Eileen Wilkinson, said: “This process can be quite long and with much uncertainty.”
“Before we start exploration activities, we’ll receive all the regulatory and environmental approvals required.”
Bulgaria’s Russian Energy
Over recent years, European nations that have traditionally relied upon Russia for their Energy needs have started to look elsewhere.
Bulgaria have themselves already experienced the misfortune of placing all your energy eggs in the one basket after, an escalated dispute between the two sides in 2009 resulted in, Russia turning off Bulgaria’s national gas supply supply for two weeks.
With the region increasingly looking more volatile, nations are rapidly looking at ways of diversifying energy sources; with gas supplies often being piped cross-continent from as far as Azerbaijan and Norway.
As the down turn in the global oil markets continues, forcing exploration companies to roll back on expensive prospecting and development projects ever further; cheaper, government partnered projects might just be the answer in the near future for both sides.