Melrose Resources to target Black Sea

Edinburgh-based Melrose Resources is to focus its oil exploration activity on new prospects in Romania while it looks to pull out of the United States.

The company has told shareholders it has won the right to explore in 2,000 square kilometres of Black Sea shallow waters off the coast of Romania.

This includes one area where oil has been discovered but not extracted.

It follows the resolution of a dispute over the area between Romania and Ukraine.

Melrose intends to spend £40m over the first three years of the concession, and will have an 80% stake in the venture, along with Petromar Resources.

The firm also has interests in Texas and New Mexico, and has announced it is looking to sell these so that it can focus on prospects in Romania, Bulgaria, Turkey and Egypt. This is expected to take six to nine months.

David Thomas, Melrose Resource's chief executive, said: "We are delighted to have been the successful bidder for two high quality exploration blocks offshore Romania and this represents an important milestone for the company as we seek to establish the country as a long term core investment area.

"We are also pleased with progress on our exploration work programmes in Bulgaria and Turkey."

Last year, Melrose had turnover of £150m on production averaging nearly 39,000 barrels of oil per day. It made pre-tax profits of £20m.