On 14.06.2012 Bulgarian Parliament adopted a Resolution limiting the ban on the 'fracking' method of drilling and extraction of shale gas, thus confirming the possibility of conventional oil and gas exploration and production.

Earlier this year, on 18 January, the Parliament voted a Resolution imposing a complete prohibition on the extraction method usually referred to as 'hydraulic fracking' or 'fracking', which is a drilling technique of injecting fluids at high pressure into underground earth cavities in order to effect a release of gas or oil stored there.

This decision was a result of protests and heated discussions within the Bulgarian society, including the government and non-governmental organizations, surrounding a proposed exploration of shale gas deposits on the Bulgarian territory. Estimations have indicated that Bulgaria may hold significant shale gas reserves, according to some sources approximately amounting to 1 trillion cubic metres. However, due to environmental issues such as potential earthquakes in the course of drilling and exploration and water poisoning, the Parliament banned not only the potential target of explorations - shale gas reserves, but also the exploration technique.

Since the adoption of the ban, there has been another growing concern. The manner in which the prohibition has been termed in the January Resolution of Parliament could also cover each and every drilling attempt to explore and/or extract oil or gas from underground fields which included injection to the underground of fluids and/or chemicals at a pressure greater than 20 atmospheres. This is the rate of drilling in the case of conventional exploration deeper than 200 metres, which is effectively a common case in oil and gas concessions. This would have blocked any investors ready and willing to conduct exploration for conventional resources on the Bulgarian territory and potentially hindered the oil and gas sector. Given that there is a pending gas and oil prospecting and exploration procedure for potential significant underground resources in the Bulgarian exclusive economic zone in the Black Sea, the ban could become a problematic issue for the future concessionaire. The ban also affected the injection of gas into the existing gas storage facility in Chiren.

A proposition was put before the Parliament that the wording of the prohibition be amended in order to allow drilling works for reserves below 200 metres where pressure exceeding 20 atmospheres has to be used. On 14.06.2012 the Parliament adopted a new Resolution so that currently the ban omits the initial barrier of 20 atmospheres. Further, the injection of fluids/chemicals is prohibited only if it results in formation of new or extension of existing natural cavities with the purpose of exploration and production of oil and natural gas (i.e. the 'fracking' method). Thus relieved, the Bulgarian legislation allows investors to be capable of exploring and extracting conventional oil and gas. However, the new wording of the legislative text does not change the status of shale gas exploration and production, which remain explicitly prohibited.

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The original publication date for this article was 22/06/2012.