Shell Expands Black Sea Footprint with Bulgaria Exploration Deal, Bolstering Europe’s Energy Diversification Strategy

In a pivotal move to strengthen Europe's long-term energy security, Shell has signed a contract with the Bulgarian government to begin oil and gas exploration in the Khan Tervel block, a vast offshore area in the western Black Sea. The agreement signals renewed momentum in the region’s upstream sector and marks a strategic milestone in the European Union’s push to reduce dependence on Russian energy imports.

Under the terms of the deal, Shell will lead exploration efforts in partnership with Bulgaria’s Ministry of Energy, gaining exclusive rights to survey and potentially develop the Khan Tervel block—a prospect covering over 4,000 square kilometers in Bulgaria’s exclusive economic zone. The project is expected to span a multi-phase timeline, beginning with seismic data acquisition and followed by exploratory drilling by late 2026.

Shell’s re-entry into the Black Sea comes at a critical juncture for Europe’s energy landscape. With Russian pipeline flows to Europe now accounting for less than 10% of pre-war volumes, EU member states are urgently seeking alternative sources to support baseload power generation, industrial supply, and energy resilience.

“Energy security is no longer theoretical. It is an immediate and tangible requirement,” said Rumen Radev, President of Bulgaria, during the signing ceremony in Sofia. “This partnership with Shell reflects Bulgaria’s commitment to regional cooperation, sustainable development, and European autonomy in energy supply.”

The Khan Tervel block lies adjacent to Romania’s Neptun Deep and Turkey’s Sakarya gas field—two of the most promising discoveries in the Black Sea basin. Shell’s involvement raises expectations for further discoveries, potentially linking Bulgarian production into regional supply networks such as the BRUA corridor (Bulgaria-Romania-Hungary-Austria pipeline system).

Shell’s investment signals a renewed willingness to tackle the unique geological and environmental challenges of Black Sea exploration. The basin is known for its deep, stratified waters and complex subsurface geology, which have historically increased drilling costs and operational risks. Nevertheless, recent advancements in seismic imaging and high-pressure drilling systems have improved project viability.

Shell is expected to incorporate carbon management and low-emission technologies into the exploration campaign, consistent with its Powering Progress decarbonization strategy. The company has committed to full environmental impact assessments in compliance with EU and Bulgarian regulations, and will engage with coastal communities and maritime authorities throughout the project lifecycle.

While the EU maintains its long-term goal of climate neutrality by 2050, the Khan Tervel initiative highlights a growing recognition that hydrocarbons still play a transitional role—particularly in regions where renewable infrastructure remains underdeveloped or where baseload reliability is essential.

Analysts view Shell’s move as both a hedge against volatile LNG markets and a means of securing geographically proximate resources for European demand. “Offshore Black Sea developments offer a rare blend of political alignment, geographic security, and technical promise,” said Dr. Livia Markovic, energy analyst at the European Council on Foreign Relations. “Projects like Khan Tervel are no longer marginal—they’re critical to the balance between energy resilience and decarbonization.”

Shell’s partnership with Bulgaria also underscores a broader shift toward cross-border energy integration in Southeast Europe. If successful, the Khan Tervel project could serve as a future node in a Balkan-centered gas network, connecting with liquefied natural gas (LNG) terminals in Greece, interconnectors in Serbia and North Macedonia, and long-term hydrogen infrastructure.

For Bulgaria, the project could reduce its dependence on imports, improve fiscal revenues through resource royalties, and stimulate local employment and technical development.

Shell’s entry into the Khan Tervel block represents more than a new offshore exploration project—it reflects a recalibration of European energy strategy, one that acknowledges the complex interplay of security, sovereignty, and sustainability. As exploration progresses, the Black Sea may yet emerge as a cornerstone of Europe’s diversified energy future.