Page 9 - Euroil Week 06 2020

EurOil POLICY EurOil
OMV Petrom irked by Romania’s delay in changing offshore law
ROMANIA
OMV’s partner ExxonMobil wants to leave the project.
THE Neptun Deep offshore gas project in Roma- nia will be postponed again, one of the reasons being US group ExxonMobil’s intention to sell its 50% stake in this project, OMV CEO Rainer Seele said in Vienna on February 6. OMV’s Romanian subsidiary OMV Petrom owns the other half of the Neptun Deep project.
OMV Petrom CEO Christina Verchere, speaking in Bucharest, expressed stronger concerns, saying the project might be dropped unless Romania amends the Offshore Law within a reasonable period of time. The anxi- ety might reflect the political turmoil in Bucha- rest, not favourable to negotiations on such a delicate issue like the statute of the offshore resources.
Meanwhile, OMV Petrom will pay €27mn to its parent group to take over OMV Offshore Bulgaria, which owns a 30% stake in the Han Asparuh offshore perimeter in Bulgaria’s Black Sea waters, which is adjacent to the Neptun Deep perimeter. This creates favourable conditions for Total, the operator of Han Asparuh perimeter, to take an interest in Exxon’s participation in Nep- tun Deep.
The sale of ExxonMobil’s stake is still at a
preliminary stage and no new partners have emerged yet, Seele stressed in Vienna, implying that this somehow alleviates the urgency of the Offshore Law amendments.
This is the latest of a series of delays caused by changes in the regulatory framework, namely the tax hikes under emergency decree (OUG) 114/2018, that have since been abrogated, and the new Offshore Law, also adopted in 2018, which is expected to be amended. Speaking of the concerns regarding the existing legal frame- work in Romania and its impact on the Neptun Deep project, Seele said that they are currently “somewhat alleviated” [by the abrogation of OUG 118 provisions] and that the final invest- ment decision might be taken within a year after the Offshore Law is amended.
However, Verchere mentioned for the first time the option of abandoning the project.
“We need changes to the Offshore Law. In the absence of amendments to the offshore law, for the first time I am afraid that we will move from “when” to “if ”. And this would be a huge loss for Romania,” Verchere said at a press conference in Bucharest as the company released its financial results for 2019. ™
PROJECTS & COMPANIES
Creditors back Premier’s North Sea deals
UK
A court hearing on the transactions will take place on March 17.
UK-FOCUSED Premier Oil secured backing from creditors to acquire a raft of North Sea assets from BP and Dana Petroleum.
The company needed at least 75% of its cred- itors to back its plan to buy $870mn in offshore UK assets from BP and South Korea’s Dana Petroleum. It ended up securing backing from 80%. However, Premier still needs to get final approval from the Scottish Court of Session, with a hearing currently scheduled for March 17.
Premier announced in early January it had agreed to buy BP’s shares in five fields in the Andrew area, collectively netting 18,000 bar- rels of oil equivalent per day, along with the UK major’s 27.5% stake in the Shell-operated Shear- water production hub. It also took a 25% share in the Tolmount gas field from Dana, raising its share in the 14bn cubic metre (bcm) field to 75%.
Premier’s largest creditor Asia Research and Capital Management (ARCM) sought to block the transactions in court, however, viewing them as risky considering the firm’s $2bn of debt. The asset management firm owns 15% of the
producer’s debt with a short position for almost 17% of its stock.
ARCM conceded ahead of creditors’ meeting on February 12 that the majority would likely support Premier’s position. But it still has hope of a court ruling in its favour in March.
The hearing will not simply be a “rub- ber-stamping” exercise, ARCM said, as the court will consider issues “beyond the outcome of the vote at the creditors’ meetings.” ARCM also said it would provide “substantial evidence and sub- missions” to convince the court to block the deal.
Rather than buying more assets, ARCM has called on Premier’s management to consider divestments to shore up its financial position.
Creditors this week also approved a scheme this week that would allow Premier to delay debt repayments and issue new shares.
“The plan put forward by Premier Oil is the most credible and deliverable proposal to deliver value for the company’s stakeholders,” a repre- sentative of the ad hoc creditors’ committee told Reuters. ™
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