site.btaUPDATED Energy Minister, Shell Sign Black Sea Oil and Gas Exploration Deal

Energy Minister Zhecho Stankov and Eugene Okpere, Executive Vice President Exploration, Strategy & Portfolio of Shell, signed on Tuesday a contract for oil and gas exploration in Bulgaria’s exclusive economic zone in the Black Sea, on behalf of Shell Exploration and Production. The signing ceremony took place at the Council of Ministers building, in the presence of Prime Minister Rosen Zhelyazkov.

The upcoming surveys will span Block 1-26 Khan Tervel, covering approximately 4,000 sq. km.

Stankov said the agreement is extremely important. “With its signing, we are taking a significant step toward uncovering the deep Black Sea’s potential for future gas supplies,” he said. This is expected to be “the cheapest gas” Bulgaria will use, as it would not include additional fees, and the country would also earn concession payments. 

Prime Minister Zhelyazkov noted that the project holds “great political significance,” as it positions Bulgaria among the region’s active players exploring the uncharted potential of the Black Sea basin. Developing the country’s own deposits, he said, carries “enormous potential,” while acknowledging the time needed to see tangible results.

According to Stankov, the gas to be discovered in the onshore and offshore territory of the deep Black Sea will be the cheapest gas, because there will be no transit fee for delivery reaching up to 30%. In addition, for future discoveries in the territory, Bulgaria is also expected to receive concession payments, which he said could be up to 30%.

"This is also a potential that shows, after three failed attempts to sign this contract, that Bulgaria has the necessary political confidence and stability for foreign investors to venture into long-term development plans that will have an impact on our and Europe's energy security and diversification of natural gas sources," Prime Minister Zhelyazkov said.

Okpere described the signed contract as a fundamental milestone in the relations between Shell and Bulgaria.

In March, Stankov signed a document with OMV Offshore Bulgaria and NewMed Energy Balkan for continued exploration in Block 1-21 Khan Asparuh, also located in Bulgaria’s Black Sea offshore area.