1 May 2009

Oil company looks to Romania

8:08 am on 1 May 2009

New Zealand Oil and Gas is looking to expand into Eastern Europe, investing 44,000 euros in a joint venture researching the potential of a site in Romania.

Chief executive David Salisbury says the opportunities available in New Zealand are not big enough for the company's growth plans, while Romania has the third largest remaining petroleum reserves in Eastern Europe, of over one billion barrels of oil.

Mr Salisbury says the Romanian government is expected to release more than 25,000 square kilometres of exploration land for new permit applications later this year.

He says the company has not obtained a permit, but may take part in a government bidding round if the prospects are good.

In New Zealand, the company will soon have two working fields, as Kupe will be commissioned by the end of this year.

While oil prices have collapsed from record levels of last year, the company says it is getting around $US50 a barrel from its Tui field, with returns coming in at $US90 a barrel, more than when the field began production two years ago.

The oil explorer has no debt and $209 million in cash. Operating revenue stood at $21.6 million in the March quarter, all of which came from the Tui oil field.