Energean Oil & Gas may not take on an exploration and exploitation license awarded to the company by the energy ministry for a block in Etoloakarnania, western Greece, as the company considers this region as being a natural extension, both in geological and business terms, of the nearby Arta-Preveza block, which was awarded to ELPE, (Hellenic Petroleum), the company has suggested in an official announcement.
Both Energean Oil & Gas and ELPE had submitted individual offers for the Arta-Preveza block, located in a region believed to have considerable production potential.
Energean Oil & Gas is already conducting exploration work in the Ioannina area, northwest Greece, which it considers an extension of the Arta-Preveza and Etoloakarnania areas.
According to Energean Oil & Gas, its strategy of approaching the area as a wider whole has been nullified by the ministry’s decision to offer the Arta-Preveza license to a rival company, as this segregation breaks the prospect of achieving economies of scale.
“There’a difference between planning your strategy based on two areas with oil priced at the level of 70 dollars per barrel and one area with oil at 30 dollars a barrel,” a company official told energypress.
The company announcement added that Energean Oil & Gas’s next move will depend on negotiations with the energy ministry as well as the latter’s reasoning on the Arta-Preveza block decision. Energean Oil & Gas also indicated that it could lodge an appeal.