Geopolemics.com :: Bulgaria

Countries: Bulgaria
Posted on Wednesday, August 25, 2010 - 01:26 PM
	A doubtful affair Bulgaria, along with Romania, entered the EU in 2007. There are those like us who think that this was a premature step on behalf of the EU. Neither country is really tackling the grave problems of crime and corruption with which they are afflicted. They are rampant in both of them. Their admission is also permitting the entry of migrants into the EU, notably Gypsies, or Romany people. It is generally forgotten that Hitler's Holocaust killed as high a proportion of Europe's Romanies as it did Jews, two million Gypsies. Hence President Sarkhozy of France has got away with targeting Bulgarian and Romanian Gypsies for eviction. They have been settling in Southern France. They are deeply unpopular and are now to go. This matter involves a can of worms, that nobody wants to open. Let us turn to more salubrious subjects. September offers a new oil frontier Bulgaria is being transformed from being an energy consumer to being an energy producer. The opening of new fields in Bulgaria will boost production by 7,500 barrels of oil equivalent per day, Melrose Resources said, as interim pre-tax profits at the Edinburgh-based oil and gas group jumped by more than a third. Melrose, which has operations in Egypt, Bulgaria, Romania and Turkey, said it produced an average of 40,000 boe/d in the first half of this year, driven by its offshore Egyptian assets. The group expects to receive a boost when the first of two Bulgarian fields begins production in September, and the income will help pay down the company’s $459m (£294m) of net debt. For the six months to June 30, pre-tax profit rose 32 per cent to $26.2m – up from $19.8m in the same period last year – on sales that rose from $97.6m to $110m. Bulgarian developments the key Dave Thomas, chief executive, said the Bulgarian fields were crucial to increasing the company’s cash flow. “Cash from operations will grow steeply. As soon as these Bulgarian developments come on, we’re on a strong growth curve – assuming a $70 barrel of oil, [we’re expecting] $240m in cash flow from our operations in 2013,” said Mr Thomas. Melrose plans to maintain current production levels in Egypt, bring two Romanian fields onstream in two years and divest assets in North America. Debt concerns have shadowed the company, which is more highly geared than many of its competitors. According to the company, debt has been cut by $15m in the past six months and Mr Thomas said money raised from the US asset sale would go towards paying down debt. Nick Copeman, an oil analyst at Oriel Securities, said the results were in line with expectations and he does not expect Melrose’s high level of debt to become a problem. “Production was slightly better than expected and the second half will be driven by Bulgaria. As for the net debt, Melrose sells fixed-price gas and if the oil price stays buoyant I don’t see it as an issue,” Mr Copeman said. Azeri gas as the Bulgarian alternative Bulgaria has stepped up efforts to reduce its almost complete dependence on Russian gas by diversifying routes and supplies after a dispute between Russia and Ukraine left it without gas for weeks in early 2009. Under the project, Azeri gas would be transported via a pipeline to Georgia to be compressed and shipped by tankers to Bulgaria's Black Sea port of Varna, said Ivan Drenovichki, executive director of Bulgartansgaz. Azeri state oil company Socar, Bulgartransgaz and the Georgian Oil and Gas Company are set to launch a feasibility study for the project at a meeting planned for 23 September to 24 September, he said to Reuters. "We have an initial agreement to launch a feasibility study. In September we are to take this decision," Drenovichki said."If all goes well and the project proves expedient, first deliveries can start at the end of 2013," he said. Bulgaria's gas consumption averages about four Bcm a year, he said. The study will define the value of the project, which Drenovichki said could cost hundreds of millions of dollars, with over 85% of the funds needed for tankers. Sofia signed a memorandum of understanding for gas deliveries with Baku last November, saying some deliveries could be transported by the EU-backed Nabucco pipeline, aimed to carry natural gas from the Caspian region to Europe. The Nabucco project faces rivalry from the Russia-led South Stream gas pipeline project, which aims to cement Moscow's position as key gas supplier to Europe. Note: To read more, click here

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