Shell and Bulgaria’s government signed a deal on April 15 that gives major oil rights to explore the Black Sea. This is a big step as Bulgaria can boost its energy production and rely less on imported gas. As per the agreement, Shell can explore up to 4,000 square metres in the Block 1-26 Khan Tervel field. Zhecho Stankov, Bulgaria’s Energy Minister, said, “With this contract, we are taking a significant step toward uncovering the deep Black Sea’s potential for future gas supplies.”
Shell’s Black Sea deal, which includes 3D seismic testing, will help assess the area’s potential for hydrocarbons.
How Shell Landed the Black Sea Deal?
Last year in June, the bidding process was initiated by Bulgaria’s energy minister for oil and gas exploration in the Khan Tervel field of the Black Sea. The deal provides an exploration permit for five years that can be extended twice up to two years. To join the bidding, applicants had to meet revenue requirements and have software to interpret seismic data for the project activities.
Initially, four companies were interested in the Black Sea exploration deal. However, only two companies participated in the bidding process and submitted a full proposal for the deal. Shell won the contract with its strong exploration plan, environmental protection measures, and dedication to building local skills.
Eugene Okpere, executive vice president of Shell’s exploration, strategy, and portfolio, said, “Our first and most important activity is to safely start operations to acquire the 3D seismic we need to image the subsurface to determine the potential of gas.”
Bulgaria’s Bid For Energy Independence
Bulgaria, once fully reliant on Russia for energy, is now working to diversify its gas sources and find cheaper alternatives to reduce dependence.
The country’s energy minister points out that the contract could help Bulgaria achieve energy independence. If viable resources are found, up to 30% of the profits will go to the state through concession fees, as there will be no transit fees for delivery. Shell will also pay an annual fee and a bonus during the five-year exploration period.
In another step toward energy independence, Bulgaria signed an agreement with OMV Offshore and NewMed Energy in March to explore Block 1-21 Khan Asparuh in the Black Sea.
Inside Shell’s Black Sea Deal
Under the deal, Shell’s exploration program will involve extensive geological and geophysical work, including new 3D seismic surveys and thorough data analysis. These efforts are aimed at assessing the true potential beneath the Black Sea seabed for deepwater exploration.
In addition to the exploration, Shell has committed to funding training programs to teach Bulgarian experts in oil and gas exploration and production. This initiative will boost local jobs and help build long-term skills in Bulgaria’s energy sector.
Shell is also dedicated to conducting all its Black Sea exploration activities while following strict safety and environmental guidelines.
