Ilian Vassilev, Member of the Management Board of the Centre for Balkan and Black Sea Studies, in an interview for Radio Focus’s broadcast Good Morning, Bulgaria.
Host: French company Total won the tender for oil and gas exploration in the Khan Asparuh block in the Bulgarian part of the Black Sea. Mr Vassilev, how would you comment on this news? Should we be optimists that this contract will have a positive effect for Bulgaria?
Ilian Vassilev: Of course, we have to be optimists. This contract marks the start of the seismic gas exploration, which will show what the specific parameters of the gas field are. Moreover, this contract will have an immediate effect on the negotiations with Gazprom, on the 7-8-year plans of gas companies and industrial consumers, as this will be the approximate timeline for the start of extraction of natural gas from this field. In the same time we need to be cautious, as this is the second tender of this type, and the first one for gas exploration near Silistar is currently in court, as it is being appealed against. Bulgaria, however, is stepping on a new road, as we finally realised what the part played by local production is. Interconnectors will connect us to the market, and the alternatives will become more.
Host: According to Bulgarian PM Boyko Borisov, if the expected quantities of gas in this block are confirmed, this would lead to real diversification for Bulgaria. A more real diversification, compared to the interconnector with Turkey, which we are about to construct.
Ilian Vassilev: Definitely. This is a question of timing. Diversification, of course, starts from within our own country. We already started the diversification through the project of Melrose. You also know that there are other places, where gas could be found, like in Devin for example. A lot of hopes are placed on the exploration of conventional and unconventional gas. Generally speaking, Bulgaria has vast resources. What needs to be said is that we do not have an alternative, as the prices of the gas extracted in Bulgaria are much worse than the prices of gas we import. This reduces the possibility our economy to be more competitive.
Host: What would be the difference in the price of gas, which we extract in our country in a few years time compared to imported gas?
Ilian Vassilev: It is very difficult to make accurate prognoses, as the prices are a function of many factors. The prices for extracted gas in different places in Bulgaria will also be different. In general, however, the price of gas extracted in Bulgaria is around 4 or 5 times cheaper than the imported one. Let us not forget that very often such gas fields are most often not pure ones, as there is oil in them. But we have to wait and see the results from the exploration. I am not worried by this fact, I am more worried about whether our institutions, regulations, and market will allow Bulgaria to take a full advantage of this gas field.
Host: Having in mind the protest rallies against extraction of shale gas, does the deep sea extraction hold any environmental risks?
Ilian Vassilev: Each and every oil and gas activity holds environmental risks. You know that there were similar fears about the gas field near Silistar. Very often there are a lot of economic interests, which stay behind some of the environmental protests, because there are serious profits behind the current status quo of the energy market. I am sure, however, that the Bulgarian society has grown enough to see the difference between real environmental risks and economic interests.
Host: Do you think that the good news about probably having big quantities of natural gas in this field should have an effect on how Bulgaria is balancing its energy sources?
Ilian Vassilev: I am worried that there could be some nationalistic movements, who can say that these are Bulgarian fields and should not be given to foreign companies. In fact, if we think about it, the main question is what we do with our resources, and not who explores and extracts them. It would be best if the bulk of the extracted gas remains on the Bulgarian market and helps the Bulgarian economy.