Exxon, OMV find up to 3 trillion cubic feet of Romanian gas

OMV AG, central Europe’s biggest oil company, said it discovered what may be its biggest gas find in a Black Sea well it is exploring together with a unit of Exxon Mobil Corp. Shares soared in Vienna trading.

“The exploration well encountered 70.7 meters of net gas pay, resulting in a preliminary estimate for the accumulation ranging from 1.5 to 3 trillion cubic feet (42 to 84 billion cubic meters),” OMV said in a statement today.

The Domino-1 well, which is operated by the Exxon unit, is located in the Neptun Block, 170 kilometers (106 miles) offshore in water about 1,000 meters deep, according to the statement. Drilling operations started at year-end 2011 and the total depth of the well is expected to be more than 3,000 meters below sea level. OMV Petrom and Exxon each hold 50 percent in the well.

“This may be the biggest find in OMV’s history,” Chief Executive Officer Gerhard Roiss told reporters in Vienna today.

OMV shares soared after the announcement, climbing as much as 5.8 percent and trading up 3.1 percent at 28.45 euros at 1:54 p.m. in the Austrian capital. Petrom shares rose 5.9 percent to 0.413 leu at 3:15 p.m. in Bucharest.

Multi-Billion Dollar Investment

The companies are planning new 3D seismic acquisition during 2012, Jaap Huijskes, who heads exploration and production at OMV, said.

While “it is too early in the data evaluation and exploration process to determine whether the Neptun block will ultimately prove to be commercially developable or not,” the companies would need to spend “multiple billions of dollars to develop” Domino-1, he said, adding that potential first production would be “toward the end of the decade at the earliest.”

Exxon’s Romania unit head Ian Fischer said in August that the first drilling of the well may cost about $150 million euros and that the companies may invest between $3 billion and $10 billion to operate the block if the testing proves to be successful, according to Mediafax. OMV today declined to comment on specific amounts.

Appraisal wells and 3D Seismic “will take some time, the Black Sea is not off the coast of Aberdeen, it takes some time to get rigs into the Black Sea and it takes time to get seismic vessels into the Black Sea,” Huijskes said, declining to specify a time frame.

Setting up the rig for the initial drilling took one year as it had to be dismantled to pass under bridges in the Bosphorus Straits, said CEO Rois.