HERE YOU WILL FIND A SUMMARY OF THE LATEST UPDATES ON OFFSHORE & ONSHORE EXPLORATION AND PRODUCTION, INFRASTRUCTURE PROJECTS IN THE BLACK SEA REGION – ROMANIA, BULGARIA, UKRAINE, GEORGIA, TURKEY UPSTREAM PROFILE OF THE BLACK SEA COUNTRIES In partnership with Global Data (https://www.globaldata.com/), we have prepared an overview of upstream developments in the Black Sea countries – Romania, Ukraine, Georgia, Turkey, and Bulgaria. Summary of the regions as well based on reports (www.woodmac.com/)

ROMANIA

ROMANIA IS CENTRAL AND EASTERN EUROPE'S LARGEST OIL AND SECOND-LARGEST GAS PRODUCER.

Local companies Romgaz and OMV Petrom are responsible for over 90% of production, with the majority coming from the onshore. However, two offshore projects will reverse the recent decline in gas production, leading Romania to become a net exporter during the next decade: ExxonMobil’s Neptun Deep and Black Sea Oil and Gas’ Midia Gas development.

Capital expenditure forecast (2020-2025) 5,552.12 US$ mil Crude oil and condensate production (2019)77.25 mbd Natural gas production (2019) 1,035.32 mmcfd Crude oil and condensate reserves 235.64 mmbbl Natural gas reserves 8,699.10 bcf LNG liquefaction capacity (2019) LNG Regasification capacity (2019) Gas processing capacity (2019) 442.14 mmcfd Refining capacity (2019) 344.80 mbd Petrochemicals capacity (2019) 7.90 mtpa

TURKEY

TURKEY IS A MINOR OIL AND GAS PRODUCER, WITH OVERWHELMING RELIANCE ON ENERGY IMPORTS.

In 2018, Turkey’s gas production met just 1% of domestic demand. Although Turkey is the second-largest oil producer in Southern Europe, its oil output covered only 5% of demand. Continued reliance on imports and recent currency depreciation has increased Turkey’s import bill.

Capital expenditure forecast (2020-2025) 14,096.88 US$ mil Crude oil and condensate production (2019)57.68 mbd Natural gas production (2019) 44.34 mmcfd Crude oil and condensate reserves 237.76 mmbbl Natural gas reserves 126.46 bcf LNG liquefaction capacity (2019) LNG Regasification capacity (2019) 1,520.97 bcf Gas processing capacity (2019) 14.99 mmcfd Refining capacity (2019) 816.00 mbd Petrochemicals capacity (2019) 7.28 mtpa

UKRAINE

MATURE PRODUCER WITH SUBSTANTIAL RESOURCES - UKRAINE WAS ONE OF THE KEY SUPPLIERS OF OIL AND GAS IN THE SOVIET UNION.

Liquid and gas production peaked at 300,000 b/d and 6.6 bcfd in the 1970s. Since then, production has been in steady decline because of the maturity of the core assets and a severe reduction in investment after Ukraine’s independence. Unlike other countries in central and eastern Europe, gas production in Ukraine is expected to increase over the next years. Capital expenditure forecast (2020-2025) 2,978.11 US$ mil Crude oil and condensate production (2019)46.27 mbd Natural gas production (2019) 1,984.14 mmcfd Crude oil and condensate reserves 198.20 mmbbl Natural gas reserves 9,117.81 bcf LNG liquefaction capacity (2019) LNG Regasification capacity (2019) Gas processing capacity (2019) 1,109.55 mmcfd Refining capacity (2019) 393.60 mbd Petrochemicals capacity (2019) 12.72 mtpa

GEORGIA

GEORGIA IS CURRENTLY A MINOR OIL AND GAS PRODUCER. HOWEVER, IT IS A VITAL TRANSIT ROUTE FOR CASPIAN HYDROCARBONS.

Oil from Azerbaijan and Central Asia crosses the country, largely via the Baku-Tbilisi-Ceyhan (BTC) pipeline. Georgia also transits Azerbaijani gas and is a key part of the strategic Southern Gas Corridor to Europe. To date, most drilling in Georgia has focused on shallower reservoirs. There is higher-cost potential in deeper reservoirs and offshore (Black Sea).

Capital expenditure forecast (2020-2025) 2,978.75 US$ mil Crude oil and condensate production (2019)0.67 mbd Natural gas production (2019) 0.58 mmcfd Crude oil and condensate reserves 3.11 mmbbl Natural gas reserves 1.80 bcf LNG liquefaction capacity (2019) LNG Regasification capacity (2019) Gas processing capacity (2019) 7.00 mmcfd Refining capacity (2019) Petrochemicals capacity (2019) 0.40 mtpa

BULGARIA

BULGARIA IS A MATURE HYDROCARBON PROVINCE, WITH PRODUCTION OF BOTH OIL AND GAS NOW FAR BELOW HISTORICAL HIGHS.

Production is dominated by two companies: Oil and Gas Exploration and Production (OGEP) and Worldview Capital-backed Petroceltic. However, a number of Majors and IOCs are actively involved in Black Sea exploration, including Shell, Total, Repsol and Woodside.

Capital expenditure forecast (2020-2025) 1,191.91 US$ mil Crude oil and condensate production (2019)1.00 mbd Natural gas production (2019) 18.53 mmcfd Crude oil and condensate reserves 3.24 mmbbl Natural gas reserves 36.86 bcf LNG liquefaction capacity (2019) LNG Regasification capacity (2019) Gas processing capacity (2019) Refining capacity (2019) 196.85 mbd Petrochemicals capacity (2019) 2.52 mtpa

ONSHORE PROFILE OF THE BLACK SEA COUNTRIES In partnership with Global Data (https://www.globaldata.com/), we have prepared an overview of onshore exploration & production in the Black Sea countries – Romania, Ukraine, Georgia, Turkey, and Bulgaria. ROMANIA

Romania's onshore gas potential remains significant and it also has vast untapped offshore acreage, meaning Romania is one of the few parts of Europe that could see gas output rise in the near-to-medium term. After the UK and the Netherlands, it has the EU's third-highest gas production, totalling 9.53 Bcm in 2018, according to data from the latest BP Statistical Review of World Energy. In January 2020 Romanian gas producer Romgaz has boosted output from the onshore Caragele field -- the biggest field discovered onshore Romania in the last 30 years -- Romgaz by 30% with the start-up of new wells, the company said (https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/013120-romanias-romgaz-boosts-gas-production-by-30-from-caragele-onshore-field).

UKRAINE

During the last ten years, Ukraine’s natural gas production has ranged from 20 to 21 bcm/year. At the same period, the share of private producers in total production from 8% to 20%. 80% of production is controlled by Naftogaz and its subsidiaries (PwC http://chamber.ua/Content/Documents/1090945462PwC%20Ukrainian%20gas%20market.pdf ). In a statement July 23, the Association of Gas Producers of Ukraine (AGPU) said the industry downturn and the economic slowdown triggered by the coronavirus had already seen Ukrainian gas output slide by 3% year on year in the first half. (https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/072420-ukrainian-gas-producers-slam-lack-of-incentives-in-state-recovery-plan) Ukraine's political aim is to be self-sufficient in gas in order to eliminate the need for imports and even to become a gas exporter in the future. AGPU had called on the government to include financial incentives in Ukraine's State Economic Incentive Program, which is designed to overcome the negative effects of restrictive measures due to the coronavirus pandemic in the period 2020-2022. Ukraine, whose gas production has been steady at some 20 Bcm/year for the past 25 years, has vast untapped potential in its onshore blocks -- both for conventional and unconventional resources -- as well as in the Black Sea.

TURKEY

Most of the onshore oil & gas production in Turkey belong to state-owned companies, with the largest being Turkish Petroleum. Turkish Petroleum Corporation (TPAO) in Turkey’s northwestern Thrace region have resulted in a gas discovery in two new wells, an amount that would meet nearly 15 years of the region’s gas demand (https://www.dailysabah.com/business/energy/turkish-petroleum-discovers-200-mcm-of-gas-in-turkeys-thrace ) Media reports citing local authorities said that as a result of the exploration works, which lasted about five months, a 200-million-cubic-meter (mcm) natural gas reserve was found in the recently drilled wells. The new wells were discovered in the Pınarca neighborhood of Tekirdağ province by TPAO, which has previously discovered natural gas reserves in the Karaağaç and Kazak Lake areas of the provinces' Kapaklı district. TPAO drilled 73 wells in 2018 and the company's oil production reached 136,000 barrels per day (bpd) up to February 2019, an all-time high record, Energy and Natural Resources Minister Fatih Dönmez had said at the time. GEORGIA

Georgia has of its own oil and gas reserves both offshore and onshore and the hydro-power potential to be a regional exporter of energy. Total Georgian oil reserves are estimated at 580 million tonnes, including 200 million tonnes in offshore fields. Georgia is comparatively under-explored but has a well-developed infrastructure and a couple of international companies starting to operate in the onshore E&P.

OFFSHORE PROJECTS IN THE BLACK SEA In preparation for the 8th Black Sea Oil & Gas in October, based on information from Offshore Technology(www.offshore-technology.com/) and GlobalData (https://www.globaldata.com/). Globuc prepared an overview of the interesting offshore projects in the Black Sea region. MIDIA GAS DEVELOPMENT PROJECT

INVESTMENT $400m RESERVES 320 billion cubic feet (bcf) The Midia Gas Development (MGD) project involves the Ana and Doina discoveries, located in the XV Midia Shallow block in the Romanian Black Sea. The sites are being developed by a fully-owned subsidiary of Carlyle International Energy Partners (CIEP) known as Black Sea Oil & Gas (BSOG, 65%) in cooperation with Gas Plus International (15%) and Petro Ventures Europe (20%). BSOG is acting as the operator of the project.

The project is estimated to cost $400m and the final investment decision was executed in February 2019. Construction is underway, with completion scheduled for Q1 2021. Plans outlined for the Midia Gas Development (MGD) project include the design and construction of an offshore platform to produce gas from the two fields, in addition to offshore and onshore pipelines, drill/development wells and a gas treatment plant. A well-head platform (jacket) will be constructed close to the Ana field at a water depth of 69.5m. It will also support production for the Doina subsea well, which will be connected to the platform through an 18km in-field pipeline. Another 121km offshore pipeline will be laid from the Ana platform to the shore to facilitate the transportation of gas. Gas produced at the plant will be sent to a gas treatment plant (GTP) through a 4.1km underground pipeline, which is under construction in the Vadu area. The plant will be connected to a Transgaz-operated national transmission system (NTS) via a 25km-long onshore pipeline. Contractors involved GC Rieber Shipping provided support for the seismic survey of the XV Midia block. Xodus Group was awarded the front-end engineering and design (FEED) contract for the MSD project. An Engineering, procurement, construction, installation & commissioning (EPCIC) contract was granted to GSP Offshore. ENGIE signed a 10-year gas sales agreement with BSOG to purchase all gas produced from the Midia gas project. BSOG executed a 15-year gas transmission contract with Transgaz for the transmission of gas from the MGD project to NTS.

SOUTH AKCAKOCA SUB-BASIN GAS FIELD

PROJECT TYPE Shallow-water gas field redevelopment FIRST PRODUCTION Phase one: 2007, Phase two: 2011 START OF PHASES III AND IV DEVELOPMENT 2020 to 2022 South Akcakoca Sub-Basin (SASB) gas field is one of the biggest natural gas production and development projects located in the Black Sea, offshore Turkey, at a water depth of less than 100m. Trillion Energy, a company based in Canada, came to own an interest in the project through the acquisition of Park Place Energy Turkey (PPETL), which owned 36.75% interest in the SASB, in 2017. Trillion Energy acquired a further 12.25% working interest in the project in January 2018 to increase its total working interest to 49%. Türkiye Petrolleri Anonim Ortaklığı (TPAO) owns the remaining 51% stake in the field. PPETL commenced production from phases one and two of the SASB between 2007 and 2011, while Trillion Energy plans to develop the third and fourth phases from 2020 to 2022. Development of the first two phases of the SASB gas project involved an investment of $608m.

The SASB gas field infrastructure includes 23 wells and four offshore unmanned wellhead platforms namely Ayazli at 78.5m of water depth, Dogu Ayazli at 70.5m of water depth, Akkaya at 61m, Akcakoca at 94.5m, associated pipelines, and Cayagzi onshore gas processing plant. The initial phase of development included the drilling of 17 wells to a total depth of 1,500m below the seabed to undertake partial development of the Ayazli, Akkaya, and Dogu Ayazli gas fields. The Akcakoca field, discovered in 2006, was developed through the drilling of six wells in phase two of the project and commenced production in 2011. All the platforms are connected to the shared processing facilities at Cayagzi gas plant via a 25km-long and 12in diameter pipeline. The plant can process up to 75mcf of gas a day. The processed gas is transported via an 18.6km-long and 16in diameter onshore pipeline, which is tied-back to the national gas transmission network operated by state-owned BOTAS Petroleum Pipeline Corporation.

NEPTUN DEEP GAS FIELD PROJECT

PROJECT TYPE Deep-water gas field development RESERVES 42 to 84 billion cubic metres Neptun Deep is a deep-water offshore gas field development project located in the Romanian deep-water sector of the Black Sea, in water depths between 100m and 1,700m. The gas field is being jointly developed by OMV Petrom (50%) and ExxonMobil Exploration and Production Romania (50%, operator). In 2000, the Romanian Government made a concession agreement with OMV Petrom and ExxonMobil to explore and develop the Neptun Deep natural gas perimeter in the Black Sea until 2030. The government extended the agreement until 2045 in January 2019. OMV Petrom formed a joint venture with ExxonMobil for the exploration of Neptun Deep in November 2008. A final investment decision on the project is yet to be made and the project is facing delays caused by changes in the tax and legal structure of Romania. ExxonMobil announced its decision to exit the project in 2019 citing the regulatory changes in the country and low oil and gas prices globally. The company invested approximately $700m in project development.

ExxonMobil acquired over 3,000km² of three-dimensional (3D) seismic data over Neptun Deep Block between 2009 and 2010. The drilling activities in the Neptun Block began by the end of 2011. In 2012, the Domino-1 exploration well was drilled in 1,000m deep water approximately 170km off the coast of Romania. The well encountered 70.7m of net gas pay and confirmed the presence of natural gas in the deep-water sector of the block. Based on initial estimates, the Domino-1 well was expected to produce approximately 630 million cubic feet per day (Mmcfd) of gas. A seven-month 3D seismic study covering an area of 6000km² in the block was completed in 2013. In 2014, the second well, Domino-2, was drilled in a water depth of approximately 800m, nearly 200km offshore Romania using Ocean Endeavor rig. The rig also drilled the Pelican South-1 wildcat well approximately 155km offshore to evaluate a new geological structure on the Neptune Block. A second exploration drilling programme was completed in January 2016. A total of seven wells were drilled during the campaign and most of them encountered gas. Extensive engineering work was performed in 2017. OMV and ExxonMobil invested more than $1.5bn in exploration and appraisal activities in the block during the period between 2008 and 2016.

TRIDENT BLOCK EX-30 TRIDENT

Four years ago, the companies running this offshore perimeter announced an important gas discovery, estimated at some 30 billion cubic meters. If confirmed, this discovery could cover Romania’s whole gas consumption for about three years. Lukoil Overseas, a subsidiary of the Russian group, has asked for environmental permits to drill three wells in the Trident perimeter, local Economica.net (https://www.economica.net/lukoil-si-romgaz-incep-campania-de-explorare-a-gazelor-din-marea-neagra_157323.html) reported. This would be the biggest such operation after the gas discovery was announced three years ago. In the meantime, only seismic prospecting was performed in the area. However, exploration wells are a more efficient tool to assess the viability of the gas discovery. In 2015, Romgaz has announced that the first exploration phase indicated a potential gas deposit of around 30 billion cubic meters of gas in Trident block 20/08/18 – Russia’s Lukoil and Romania’s Romgaz, partners in joint offshore operation in the Black Sea, prepare to drill for an exploration well in estimated 30 billion cubic meters deposit Trident

In 2019 LUKOIL (https://oiljournal.info/en/content/nv/6727/preparation-as-the-key-to-success/) successfully completed another stage of its exploratory work at the EX-30 Trident Block in Romania’s section of the Black Sea. The company drilled its third exploratory well – Trinity-1X on the block In January, 2020 The National Gas Company Romgaz SA and Grup Servicii Petroliere (GSP) have announced the start of operations within Trinity-1X project, in Trident Block, located in Romania’s Black Sea territorial waters, in early November. The gas resource is estimated at approximately 30bcm, and the two partners, Lukoil and Romgaz (which owns a 12.2% stake in the project) will operate the well, with the help of GSP and Italy’s Saipem. Trinity-1X well, at a distance of 215km off the coast of Constanta City, is the 3rd exploration well to be drilled in Romania within EX-30 Trident Block, water depth reaching in the exploration area 1,076m and the proposed well depth being 2,975m. Drilling of the exploration well will be followed by the detailed analysis and professional evaluation of the results obtained, and by integrating the new information the new geological model will underlie the future decisions whether to drill new wells or not; depending on data obtained, a final investment decision can be made to move to the field development phase. “It is a great success from my point of view and we hope it precedes other important achievements in terms of Black Sea exploration. The estimated resource would reach over 30bcm. The estimate comes after all the calculations, here we are talking about seismic, data interpretation, drilling and all the rest,” Romgaz CEO Adrian Volintiru has stated (https://energyindustryreview.com/oil-gas/romgaz-and-gsp-start-trinity-project-in-the-black-sea/).

XVIII HISTRIA OMV Petrom started a new offshore drilling campaign in the shallow waters of the Istria block in the Black Sea. Two new wells will be drilled by the end of the year, requiring investments of over 30 million euros. The two wells will be drilled at over 2,000 meters below the seabed, in water depths of approximately 50 meters. They target additional production from the Lebada East field (oil and associated gas), discovered in 1979. The Istria block in the shallow waters of the Black Sea has a history of over 30 years of oil and gas production. Although fields are mature and reached their plateau production years ago, sustained investment and adequate engineering solutions enable us to unlock additional resources and to mitigate production decline Peter Zeilinger, member of OMV Petrom’s Executive Board June 29, 2020 OMV Petrom, the largest energy company in South-Eastern Europe, is pleased to confirm that it has been selected as the winner of the open international tender held by the Ministry of Economy and Sustainable Development of Georgia for the Offshore Block II. Peter Zeilinger, member of the Executive Board, responsible for Upstream: „We continue our plans to expand our upstream activities in the Black Sea region. This is another milestone, after signing a contract to enter the Han Asparuh exploration license in offshore Bulgaria. It is a natural continuation of our more than 40 years of experience in the Romanian Black Sea waters.” The block will be formally awarded only if negotiation of a Production Sharing Contract is successfully finalized. If so, OMV Petrom will obtain the rights to conduct oil and gas exploration activities in Block II, located on the shelf and within the economic zone of the Georgian offshore Black Sea. KHAN ASPARUH OFFSHORE BLOCK The companies won a permit for prospecting and exploration of oil and gas in the 1-21 Han Asparuh block in 2012. Under the terms of the contract, they committed to invest over 1.0 billion euro in the gas exploration process, while Bulgaria would receive 40 million euro ($45.2 million) in the form of a bonus payments from the deal, the Bulgarian economy ministry said at the time. In October 2016, Total said it had discovered oil in the block. 13/03/2019 – Bulgaria’s government said on Wednesday that it accepted a request by France’s Total, Austria’s OMV and Spain’s Repsol to extend by 109 days the permit held by the three companies for exploring for oil and natural gas in the 1-21 Han Asparuh offshore

block in the Black Sea. The extension is a result of a force majeure event, the government said in a statement, without giving further details about the event. Their permit is due to expire in January 2020. June, 2020 Bulgaria has granted Spain's Repsol permission to transfer 30% of the rights to explore a block off its Black Sea coastline for gas and oil to the other two rights holders. After the transfer, a unit of French oil company Total would hold 57.14% of the rights, while a unit of Austria's OMV would have 42.86%, the Bulgarian government said in a statement (https://www.oedigital.com/news/479317-bulgaria-repsol-transfers-offshore-block-rights-to-total-omv) Wednesday. The government extended a permit granted in 2012 for deepwater oil and gas exploration in the 1-21 Khan Asparuh block by two years until May 15, 2022. The permit was granted as part of Bulgaria's efforts to end its reliance on Russian natural gas supplies. "During the two-year extension, additional geological and geophysical works and seismic surveys worth a total of 3.3 million euros will be carried out," the government said.

INFRASTRUCTURE PROJECTS IN THE BLACK SEA COUNTRIES In partnership with Global Data, we have prepared an overview of infrastructure projects, in the Black Sea countries – Romania, Ukraine, Georgia, Turkey, and Bulgaria

Planned gas infrastructure projects in the Black Sea countries, 2019 – 2022 (Approval / Construction)

Pipeline System/Pipeline Name

Operator Start Year

Length (Km)

Total CapEx (US$ mil)

Project Stage

TurkStream (Turkey–Bulgaria Section)

Bulgartransgaz 2020 484.00 1,600.00 Approval

Turkstream Onshore Line Unknown 2019 180.00 758.00 Construction

Giurgiu–Nadlac TRANSGAZ 2020 550.00 744.00 Construction

Midia Gas Black Sea Oil & Gas

2021 126.00 342.00 Approval

Tuzla–Podisor TRANSGAZ 2020 308.00 282.00 Approval

Interconnection Turkey–Bulgaria

Bulgartransgaz 2020 205.00 132.00 Construction

AGRS–Bansko Bulgartransgaz 2021 40.00 12.00 Approval

AGRS–Panagyurishte Bulgartransgaz 2021 62.00 9.00 Approval

AGRS–Svishtov Bulgartransgaz 2021 39.00 6.00 Approval

Tsiteli-Khidi–Gardabani Georgian Oil and Gas Corp

2019 19.00 2.00 Construction

Ptsa–Chorchana Georgian Oil and Gas Corp

2022 17.00 1.00 Construction

Kobuleti Georgian Oil and Gas Corp

2022 60.00 Construction

Announced oil & gas infrastructure projects in the Black Sea countries (Feasibility / FEED stage)

Pipeline System/Pipeline Name

Operator Type Start Year

Length (Km)

Total CapEx (US$ mil)

Project Stage

White Stream (Option Route 2)

White Stream Pipeline

Gas Pipeline, Ultra-Deepwater

2022 1,100.00 2,500.00 Feasibility

AGRI (Romania–Hungary Section)

AGRI LNG

Gas Pipeline, Onshore

2026 920.00 1,076.00 Feasibility

Brody–Adamowo Sarmatia Gas Pipeline, Onshore

2022 396.30 552.00 Feasibility

Varna–Oryahovo Bulgartransgaz

Gas Pipeline, Onshore

2022 844.00 329.00 Feasibility

Pitesti–Pancevo Conpet Gas Pipeline, Onshore

2020 440.00 248.00 Feasibility

Neptun Deep ExxonMobil Exploration and Production Romania

Gas Pipeline, Deepwater,Onshore

2024 160.00 187.00 FEED

Sofia–Dimitrovgrad Bulgartransgaz

Gas Pipeline, Onshore

2022 62.00 54.00 FEED

Romania–Serbia Gas Interconection Line

TRANSGAZ

Gas Pipeline, Onshore

2023 76.00 38.00 Feasibility

Midia–Gradina TRANSGAZ

Gas Pipeline, Onshore

2021 25.00 26.00 Feasibility