"We are very excited about drilling our first well in Romania by October and look forward to seeing the results and deciding where the next wells will be drilled," said Martin Macfadyen, general manager of Enterprise Oil Exploration Ltd.
Macfadyen said the well, 150 kilometers east of the main Black Sea port Constanta in an area which the company has code-named Rapsodia, would be drilled 4 kilometers deep at a cost of $8.5 million.
Enterprise will hire a semi-submersible floating rig from a foreign company to perform the drilling, he said.
"We don't expect too many technical problems. The well will provide a tremendous amount of data and satisfy our geological intention in examining all appropriate strata," he said.
Romania and Enterprise have concluded a production-sharing agreement for two blocks in the Black Sea near the Swan field where production began in 1987. The agreement was signed for the Romanian government by state-owned Rompetrol SA.
Under the deal Enterprise, and partner Canadian Occidental Petroleum Ltd., will invest over $25 million for exploration at the two offshore blocks over the next five years.
But Macfadyen said his company had decided to drill four wells in the area and that the initial contractual commitment of $25 million would be almost doubled.
"We are encouraged by the prospectivity of the area and we plan to do more work there. At this stage a rough estimate of the costs is something in the region of $45 million," he said.
Under the agreement, oil production will be shared with the Romanian state, but details of the split are confidential. After dictator Nicolae Ceausescu was ousted in December 1989, cash-strapped Romania put out to international tender 16 blocks for exploration and production-sharing agreements.
Offshore oil accounted for 15 percent of Romanian output of 6.6 million tons, or about 130,000 barrels per day, in 1993.
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