Royal Dutch Shell Exploring Off the Bulgarian Coast
The first official component of a five-year agreement between Royal Dutch Shell and the country of Bulgaria that was signed last February began taking shape on October 20. That was when oil exploration began in the 1-14 Silistar block for Shell Exploration and Production, a company subsidiary.
The move was announced by the Bulgarian energy ministry, with the seismic exploration located in a vast area of the Black Sea. Encompassing 2,663 square miles, this is the largest block of offshore deposits off the Bulgarian coast.
In mid-2015, Bulgaria opened up bidding on the Silistar and Teres 1-22 blocks in an effort to eliminate the dependence on 95 percent of its gas imports from Russia. In the past, the country has been vulnerable to the political whims of Russian leader Vladimir Putin and wanted to avoid the continuation of balancing basic needs with political agendas.
Bulgaria is currently spending approximately $1 billion each year to import gas. One problem in continuing this delicate balance surfaced in 2009, when the country was cut off for two weeks from bringing in any oil during the height of a Russian-Ukranian conflict. Bulgaria is the poorest country within the European Union.
For the Silistar block, Shell ended up being the only bidder just over a year ago and after four months’ worth of negotiating, the deal was signed on February 23. The ensuing delay before exploration could begin was related to getting approval on a number of environmental issues and regulations.
An investment of $20.5 million had previously been pledged by Shell for these seismic surveys. If the deposits end up reaching the predicted amounts from past assessments, the potential of having access to 84 billion cubic meters worth of gas will go a long way in helping Bulgaria rid itself of those Russian shackles.