NIS to seek oil and gas in Hungary

The Petroleum Industry of Serbia (NIS) and the Canadian company Falcon Oil and Gas signed Thursday in Szeged a letter of intent for oil and gas research in Hungary.

In that way, NIS acquires a 50 percent interest in the future oil and gas exploration in Mako field, from a sandstone found between 2.5 and 3 kilometers below the surface, it was said at the signing ceremony in Szeged.

NIS Director General Kirill Kravchenko said that that company would at its sole expense start drilling and testing three wells in the agreement area in 2011, while the testing should be completed until late 2012.

- I am sure that this project will expand the resource base of the company as far as oil and gas are concerned, as well as contribute to the fulfillment of the plan to increase the production from current 1.5 million tonnes of hydrocarbon to 5m tonnes a year within next ten years - he said.

- The project in Hungary is important because it can be quickly implemented. The production may start early next year - said Kravchenko.

NIS Director General stressed that the first step would be to use conventional reserves, while the use of non-conventional oil and gas sources would be taken in consideration in the next phase.

Kravchenko pointed out that he could not state the value of the project in Hungary yet, but he said that the first estimates would be available after the completion of the first phase of the project at the year's end.

Falcon CEO Robert Macaulay said that NIS had been selected for a partner due to its qualifications, both technical and financial ones.

Mr. Macaulay added that that company had not considered projects in Serbia yet.

- We did not have the reason to study them, but I think it would be useful for Falcon Oil and Gas to consider implementation of similar projects in Serbia through a partnership with NIS - says Macaulay.

Hungary is the fourth country in which NIS has projects in field of research and production, in addition to Angola, Bosnia and Romania.

NIS is going to implement the project in Hungary in association with TXM, the Hungary-based daughter company of Falcon Oil and Gas.

NIS a.d. Novi Sad

NIS

Falcon oil and gas

Szeged

Kirill Kravchenko

hydrocarbon

Robert Macaulay

TXM