Oracle Energy Corp., a Canadian oil and gas company, announced it has completed the acquisition of a 20% stake in six oil and gas concessions in Romania from Carpathian Energy, a North-American company.
The value of the deal is approximately around 0.5 million dollars (0.41 million euros) and includes the issue of 917,059 common shares, which were transferred to Carpathian Energy Companie Petrolia SRL.
Oracle Energy and Carpathian Energy are partners in the oil concession agreements signed for the six blocks, which some time ago belonged to Petrom.
The blocks in this deal are Bordei Verde Vest, Nadlac, Catrunesti, Cozieni, Ciumeghiu Est and Ciumeghiu Nord. Procedures for the takeover of the stake belonging to Carpathian Energy by Oracle Energy started as early as the summer of 2004.
Oracle Energy is involved in international projects in Romania, Yemen and Peru.
In the exploration phase, American and Romanian geology experts working with the Carpathian Energy company discovered that only 10% of recoverable reserves had been already used, as Romanian authorities underestimated the potential of these blocks in their calculations.
Romania is regarded by many specialists in the natural resources market as a mature oil province, which means there are low chances for operators in this field of finding new highly productive deposits.
After having invested approximately 400 million dollars (322 million euros) over the last 15 years, many companies have met with failure and quite few of them have discovered deposits that could be put to commercial use, as it happened in the case of Wintershall, a German company, in the Transilvania Sud (Transylvania South) block.
Shell, the Anglo-Dutch giant, Arco (now part of British Petroleum), Total (France), Conoco (the US) and more recently Forest Oil, a US-owned company withdrew from the Romanian market, focusing on other regions. Tullow Oil (Ireland) operating in the oil and gas exploration and drilling sector, also announced it planned to leave the Romanian market.
The biggest players on the Romanian gas and oil exploration market are Petrom, now part of the OMV Austrian group portfolio, and Romgaz Medias, a natural gas producer, which is a state-owned company.
Lately, the Rompetrol group has expanded its operations in this area in a bid to create an integrated chain of oil operations in Romania.
Oil and gas exploration after 1990
* Romania is viewed as a mature oil province, with low chances of new highly productive deposits being discovered by operators in this sector
* Foreign companies have invested over 300 million euros in the sector but many met with failure
* Shell, Arco, Total, Conoco, Forest Oil all withdrew from the Romanian market
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