Naftna Industrija Srbije (NIS) and the Canadian East West Petroleum Corp. (EWP) signed a memorandum of understanding, under which the companies will collaborate in the exploration and development of four blocks in Romania - EX-2 (Tria), EX-3 (Baile Felix), EX-7 (Perry) and EX-8 (Blled). This program of exploration will include the collection and processing during a two-year period of 2D and 3D seismic data survey in areas of 900 sq. km and 600 sq. km. km respectively, and drilling of least 12 exploration wells.
Previously, East West Petroleum Corp. signed a Concession Agreement for these blocks with the Romanian National Agency of Mineral Resources. The sites are located in the western part of Romania in the Pannonian Basin and lie close to numerous oil and gas fields. NIS is a leading explorer in this sector of the Pannonian basin and is currently working in Vojvodina - the region in the north of Serbia, which borders on the Romanian Blled and Perry Concessions.
In accordance with the terms of the agreement, East West will receive compensation for the costs incurred. NIS will undertake the investment commitments under the licensing agreements and act as project operator. NIS will independently carry out exploration operations and will be entitled to an 85% interest to commercial production. The remaining 15% interest will be retained by EWP.
General Director of NIS Kirill Kravchenko said: "The new joint project in Romania is another step made by NIS to expand its activities outside Serbia and to implement the strategy of transforming the company into an active regional player in the Balkan energy market. According to our estimates, successful exploration will enable NIS to double its resources."