Sofia extends Total’s Black Sea permit

Bulgaria has opted to extend an exploration permit for one of the country’s most prospective offshore oil and gas projects.

France’s Total, Austria’s OMV and Spain’s Repsol were awarded the right to explore for hydrocarbons at the 1-21 Khan Asparuh block in the Black Sea in August 2012. The permit was due to expire later in 2017, although the government said in a statement last week it would provide a 135-day extension, following a request by Total. The French major is looking to shore up a discovery it made at the site in late 2016.

The 14,200-square km block is situated in the western region of the Black Sea in water depths of up to 2,200 metres.

Under the terms of the original permit, Total and its partners were obligated to spend over 1 billion euros (US$1.1 billion) on exploration work over a five-year period. The investors also had to pay a 40 million euro (US$43 million) signature bonus to Sofia.

They wrapped up 7,740 square km of 3D seismic survey at the site in January 2014, having already completed the shooting of 3,000 km of 2D seismic in October of the previous year.

Total had planned a first exploration well at the block in 2015, but pushed this back after the rout in global oil prices in late 2014. It was not until May last year that drilling work finally began.

The Polskov-1 well, situated some 128 km off the coast of Bulgaria, was spudded by a Globetrotter-class vessel built by UK-based Noble.

Total reported that the well had yielded a deepwater discovery last October, although the French major has so far not outlined its plans to develop the site. The company owns a 40% stake in the 1-21 Khan Asparuh block, while OMV and Repsol each have 30%.

Bulgaria is eager to expedite offshore oil and gas activity to strengthen its economy and curb its reliance on imports. In October last year, Royal Dutch Shell announced the launch of seismic work at Bulgaria’s offshore Silistar block. The Anglo-Dutch major has pledged to invest 18.6 million euros (US$19.5 million) in research at the site within the next five years.