A financial support plan for upstream company Energean’s Prinos field, south of Kavala, comprised of a state-guaranteed commercial loan of 90.5 million euros for the group’s domestic subsidiary, plus a supplementary loan of 9.5 million euros from the Greek State, has been submitted to Greek Parliament for approval following its endorsement by the European Commission.
The financial support to be offered for Energean’s Prinos field, based on a temporary EU support framework established to offer economic support in response to pandemic-related effects, will be provided by December 31, 2021, used to cover Energean’s investment and working capital needs over 12 months, and will have a maximum duration of 8 years.
The European Commission offered its approval of the support package as it deemed that Energean generates the greatest proportion of its domestic revenues through the sale of crude, acknowledging this activity has been hit hard by plummeting oil prices amid the pandemic, making it difficult for the company to gain access to capital markets.
According to the company’s results for 2020, announced at the end of April, Energean’s Greek subsidiary incurred operating losses of 83.4 million euros in 2020, forcing its parent company to provide it with 62.4 million euros during the year.
According to sources, Energean’s Prinos activity lost 120 million euros over the two-year period covering 2019 and 2020.
Despite improved oil price levels, more recently, the subsidiary’s inability to invest as a result of a lack of financing has led to a further reduction of production, which is expected to lead to losses of approximately 40 million euros this year.