Romania OMV Petrom, Petrofac Sign Production Enhancement Deal

Petrofac, an international oil & gas facilities service provider, will manage all aspects of the fields’ activity in Ticleni on behalf of Petrom, the Romanian company said in a statement.

The agreement, effective immediately, targets cumulative production enhancement out of Ticleni oilfield by at least 50% over the next five years, Petrom said.

Ticleni, a mature onshore field which has been operating for some 60 years, has more than 1,000 wells, of which around 300 are currently producing a total of approximately 4,500 barrels of oil per day (around 2.5% of Petrom’s daily output on the local market).

„In order to unlock our E&P potential, given the complexity of operating mature fields as well as the complexity of our portfolio in Romania, we will focus our efforts on the re-development of six to eight major fields until 2015,” said Mariana Gheorghe, CEO of Petrom.

„In parallel, in order to maximize production on other mature fields, we decided to enter partnerships with internationally reputed companies. The partnership with Petrofac (…) is an example in this regard,” she added.

Petrom will supervise the operations and will pay Petrofac per barrel of oil produced, including an enhanced tariff for incremental production.

In a separate statement Monday, Petrofac said will book the initial five years’ of estimated contract revenues into backlog in relation to the contract, which equates to $270 million.

With around 12,000 employees, Petrofac operates out of six strategically located operational centers, in Aberdeen, Sharjah, Woking, Chennai, Mumbai and Abu Dhabi and a further 19 offices worldwide.

Petrom, majority owned by Austria’s oil and gas group OMV (OMV.VI), provides 60% of OMV’s overall production, which stands at 317,000 barrels of oil equivalent per day.

According to OMV estimates, Petrom’s oil resources in Romania amount to 20 billion barrels, with a recovery factor of 25%.

On the Bucharest Stock Exchange Friday, Petrom closed up 2% at RON0.306 a share.