egypt

Energean plc: 2022 Full-Year Results  

Posted on by admin

London, 23 March 2023 – Energean plc (LSE: ENOG, TASE: אנאג) has announced its audited full-year results for the year ended 31 December 2022 (“FY 2022“).

Mathios Rigas, Chief Executive of Energean, commented:

“2022 was a year of transformation for Energean – where a long-held vision became an operational reality. It was a year of positive delivery. We commenced production from the only FPSO in the strategically vital Eastern Mediterranean region, paid dividends to our shareholders, and laid the foundation for our future growth through the discovery and de-risking of new natural gas resources adjacent to our infrastructure. Energean was the sole owner-operator of five deepwater wells, which drove a 20% increase in our reserve base, and marked the 15th consecutive year of reserve and resource base increases for Energean. We are proud to be on track to deliver between 4.5 and 5.5 bcm of gas into the Israeli domestic gas market this year, contributing towards the security of energy supply of the region and improving the living conditions of the Israeli public through the reduction of emissions from the displacement of coal-fired power generation.

“The first quarter of 2023 has continued the positive trend. Production from Karish is in line with our expectations, and in February we supplied the first Israeli hydrocarbon liquids export cargo to international markets. In Egypt, we achieved first gas at NEA/NI with three further wells due to come onstream during the year. In Italy, we are the third largest producer of natural gas and look forward to increasing our contribution towards the country’s energy supply. And in Greece, we are continuing our efforts to explore the untapped resources of the country.

“The remainder of 2023 will see us present the development concept for the Olympus Area, offshore Israel, and increase the capacity of the Energean Power FPSO to 8 bcm/yr. This is alongside delivery of production in line with guidance and deliver on-target returns, as promised, to our shareholder base. Through our gas contracting strategy we are in a unique position to have a very predictable and stable cashflow despite turbulence and challenges in the international financial markets.

“We are committed to investing in projects where we can create value for all stakeholders. The global energy crisis is not over – the global gas market remains dangerously tight and benefitted from a mild European winter, but thousands of industrial jobs are now at risk not just to price but also to availability. We therefore hope that governments understand the value of enhanced domestic and regional energy production, that can only be delivered through long-term investment.”

Highlights

  • Delivered first gas from Karish in October 2022
    • Production and ramp up in line with expectations
    • Energean is now sequentially notifying gas buyers that the commissioning period under the gas sales and purchase agreements (“GSPAs”) has ended and the start date for commercial obligations has commenced. It expects to have completed this process for all gas buyers by the end of March 2023
  • Initiated hydrocarbon liquid exports from Karish field to international markets
  • Delivered first production from NEA/NI, Egypt, in March 2023
  • On track to deliver 200 kboed production target in 2H 2024
  • Confirmed year-end 2P reserves of 1,161 mmboe (+20% increase versus end-2021) representing a reserve replacement ratio of 1400%
    • Including the addition of 31 bcm (approximately 206 mmboe) of 2P reserves in the Olympus Area, offshore Israel, that have now been certified by Energean’s reserve auditor, Degolyer and McNaughton (“D&M”)
  • Delivered strong financial performance, underpinned by strong commodity prices
    • 2022 revenues of $737.1 million, represented a 48.3% increase (2021: $497.0 million)
    • 2022 EBITDAX of $421.6 million, represented a 98.8% increase (2021: $212.1 million)
    • 2022 profit-after-tax of $17.3 million, was an improvement on last year’s loss (2021: $(96.2) million). Profit after tax was negatively impacted by $119.4 million of windfall taxes in Italy[1], which are expected to have been applied on a one-off basis
    • Group cash as of 31 December 2022 was $502.7 million (including restricted amounts of $74.8 million) and total liquidity was $720.0 million. In March 2023, Energean signed a $350 million term loan providing additional financial flexibility
  • Announced dividend strategy and initiated dividend payments
    • Cumulative dividends paid of 60 US$ cents with a further $30 US$ cents declared and not paid, representing an annualised yield of approximately 9%[2].
  • Carbon Disclosure Project (“CDP”) rating increased to A- (from B), outperforming the global average for E&Ps of C

Outlook

  • 2023 production guidance confirmed at 131 – 158 kboed, including 4.5 – 5.5 bcm of gas from Karish
  • Mid-term targets now considered near-term: on track to achieve production, financial targets, and leverage targets in 2H 2024[3] through execution of key development projects
    • Karish growth projects to increase the capacity of the Energean Power FPSO are on track for year-end 2023, following which Israel production is expected to be more than 140 – 155 kboed
    • Three additional wells to be brought onstream at NEA/NI by year-end 2023, following which production in Egypt is expected to be more than 40 kboed
    • Cassiopea expected to deliver first gas in 2024, following which production in Italy is expected to be approximately 20 kboed
  • Communication of development concept for the Olympus Area expected in the coming months
  • Orion X1 well, Egypt, (Energean 30%, expected to farm down to 18%) expected to spud in late 2023, slightly delayed due to rig availability
  • Declaration of quarterly dividends in line with previously communicated policy
    • $50 million per quarter initially, rising to $100 million per quarter following achievement of near-term targets
    • Cumulative dividends of at least $1 billion by end-2025
    • Post-2025 target to maintain a progressive dividend policy, underpinned by existing reserve volumes

Financial Summary

 

    FY 2022 FY 2021 % Change
Average working interest production kboed 41.2 41.0 0.5%
Sales and other revenue $ million 737.1 497.0 48.3%
Cash Cost of Production $ million 284.3 261.6 8.7%
Adjusted EBITDAX[4] $ million 421.6 212.1 98.8%
Profit/(loss) after tax $ million 17.3 (96.2) 118.0%
         
Capital expenditure $ million 728.8 403.5 80.6%
Exploration expenditure $ million 141.0 48.7 189.5%
Decommissioning expenditure $ million 8.9 2.7 229.6%
         
Cash (including restricted amounts) $ million 502.7 930.5 (46.0%)
Net debt – consolidated $ million 2,518.2 2,016.6 24.9%
Net debt – plc excluding Israel $ million 143.8 102.6 40.2%
Net debt – Israel $ million 2,374.4 1,914.0 24.1%

 [4] During 2022, Italy introduced: 1) a windfall tax in the form of a law decree which imposed a 25% one-off tax on profit margins that rose by more than 5 million euros between October 2021 and April 2022 compared to the same period a year earlier. The amount of the windfall tax paid by Energean Italy was $29.3 million and 2) In November 2022, Italy introduced a new windfall tax that imposed a 50% one-off tax, calculated on 2022 taxable profits that are 10% higher than the average taxable profits between 2018-2021. This amount has a ceiling equal to 25% of the value of the net assets at end-2021. Based on this, Energean would be required to pay an additional one-off tax of €87 million in June 2023.

[4] Based on 21 March 2023 share price of GBp 11.00

[4] On an annualised basis

[4] Adjusted EBITDAX is calculated as profit or loss for the period, adjusted for discontinued operations, taxation, depreciation and amortisation, share-based payment charge, impairment of property, plant and equipment, other income and expenses, net finance costs and exploration and evaluation expenses.

Crete unable to take on more grid links, IPTO informs GAP Interconnector

Posted on by admin

The Cretan grid cannot take on any further interconnections as power grid operator IPTO’s Crete-Peloponnese and Crete-Athens grid links, plus the Cyprus-Crete subsea cable connection planned by EuroAsia Interconnector have exhausted the island’s capacity, IPTO officials have underlined.

IPTO officials, at a recent meeting with representatives of the Eunice Group, heading the effort for development of the GAP Interconnector (Greece-Africa Power) project, informed of Crete’s inability to take on any further interconnections, according to IPTO sources. An alternative route for the GAP Interconnector not involving Crete will, as a result, be needed, the IPTO officials have asserted.

GAP Interconnector officials want to develop their project as a means of importing RES-generated energy from Egypt to mainland Greece via Crete.

The plan entails installing two subsea cables, offering a 2,000-MW capacity, from coastal Matruh in Egypt to Crete’s Atherinolakko, a distance of approximately 450 kilometers.

Any new major grid interconnection involving Crete would hamper the local grid’s ability to operate safely and reliably, while also endangering the grid, itself, and interconnections, IPTO officials warned.

Greece promoting power corridors linking Europe’s north and south

Posted on by admin

Greek Prime Minister Kyriakos Mitsotakis is pushing for an expanded and reinforced European grid that would facilitate the transfer of RES-generated electricity northwards from the continent’s south, energy minister Kostas Skrekas and the Greek leader’s special adviser for energy, Nikos Tsafos have revealed at the ongoing Power & Gas Forum organized by energypress in Athens.

The plan entails developing European energy networks for the transfer of RES-generated electricity from north African and southeastern Mediterranean countries to Europe via Greece and other southern European countries.

Electricity interconnections from Egypt and Tunisia are in the pipeline but their effectiveness would depend on the development of a greater number of higher-capacity transmission lines by EU member states.

The Greek proposal is based on data provided by ENTSO-E, the European Network of Transmission System Operators, according to which an additional overall capacity of 64 GW can be added at 50 cross-border electricity interconnections in Europe between 2025 and 2030, a development that would boost the European grid’s efficiency by 55 percent.

The Greek initiative, placing emphasis on the development of electricity corridors linking the continent’s north and south, would enable more consistent green energy supply all over Europe throughout the year. At present, scattered and differing RES yields generated by wind and solar technologies in various parts of the continent have limited reach.

An upgrade of the continent’s grid would enable continual flow of RES-generated energy between European countries of the north and south, maximizing RES efficiency.

 

GAP Interconnector promising additional Greek-Egyptian grid link

Posted on by admin

The GAP Interconnector project, planned to link Egypt with Greece, via Crete, promises to serve as a further step towards transforming Greece into an exporter of green energy to the rest of Europe, officials of the Eunice Group, heading the project, budgeted at 1.3 billion euros, have highlighted at a news conference.

It represents an additional Greek-Egyptian grid interconnection project, following the GREGY Interconnector, a 3.5 billion-euro project being promoted by Elica, a subsidiary of the Copelouzos group.

The GAP Interconnector project promises to reinforce Greece’s geostrategic role, making it a transmission hub to the rest of Europe for RES-generated electricity from Egypt, Andreas Borgeas, the project’s chief executive and a former California Senator, told journalists.

A feasibility study has already been conducted for the GAP Interconnector, as have oceanographic studies to map the areas concerning the project’s route, the Borgeas informed.

Two cables to offer a 2,000-MW capacity and run from coastal Matruh in Egypt to Crete’s Atherinolakko, a distance of approximately 450 kilometers, will serve as the project’s backbone. Converter stations will be installed at both these locations.

The project, whose subsea cable installations will reach as deep as 4,445 meters off Crete and 3,500 meters off Egypt, was described as “challenging” by Borgeas, the project chief, who added advanced deep-sea cable installation technology is now available.

The aim is to establish a multinational consortium for the GAP Interconnector project and induct, as a first step, the US company McDermott, one of the world’s biggest developers of subsea projects, Borgeas informed. French, Greek and Italian companies are also expected to soon join this consortium, the official added.

The GAP Interconnector project and the GREGY Interconnector are not rival projects but they will compete for points concerning PCI-PMI lists, Borgeas pointed out.

A direct, straight-line connection from Egypt to Crete planned for the GAP Interconnector offers it a comparative advantage as it is shorter and subsequently lower in cost, Borgeas noted, adding the project lies entirely within the boundaries of the Greek-Egyptian exclusive economic zone (EEZ).

It is planned to be complemented by the Southern Aegean Interconnector (SAI), a 1.5 billion-euro project to connect Athens, the Dodecanese islands, and Crete.

Energean plc: First gas from NEA / NI, offshore Egypt

Posted on by admin

London, 9 March 2023 – Energean plc (LSE: ENOG, TASE: אנאג) has confirmed that first gas has been safely delivered at North El Amriya and North Idku (“NEA/NI”), offshore Egypt.

Highlights:

  • Gas is being produced from the NEA#6 well.
  • The remaining three wells are expected to be brought online over the course of 2023

The NEA/NI development, located in shallow water, offshore Egypt, contains an estimated 39 mmboe[1] of 2P reserves (88% gas) with net working interest production expected to peak at 15 – 20 kboed (88% gas) in 2024. The development leverages existing infrastructure and involves the subsea tieback of four wells to Energean’s North Abu Qir PIII platform. Energean sanctioned the project in January 2021, representing a development period from final investment decision to first gas of 2 years and 2 months.

Mathios Rigas, Chief Executive Officer of Energean, commented:

“Our successful development of first gas at NEA/NI is a good example of our commitment to Egypt and longstanding partnership with the Egyptian Ministry of Petroleum, EGPC and EGAS, creating value for all stakeholders. We are delighted to bring on new production into our East Mediterranean gas-focused portfolio, as well as meeting the needs of Egypt and Egyptians through underwriting energy security with reliable supply that has a lower carbon footprint than alternative sources of domestic energy.”

 

Greek-US energy agenda focused on 3 projects

Posted on by admin

Three energy infrastructure projects, the Alexandroupoli FSRU in Greece’s northeast, an oil pipeline running from the Alexandroupoli port to Burgas, on Bulgaria’s Black Sea coast, and a Greek-Egyptian grid interconnection, were focal points in talks yesterday between Greek and American officials, as part of US Secretary of State Anthony Blinken’s official visit to Athens.

The two sides, meeting for the 4th round of a Greece-US Strategic Dialogue, appeared determined to push ahead with the three projects, propelled by Russia’s war on Ukraine, which has prompted Europe to move in a direction ending its reliance on Russian fossil fuels.

It was agreed that Athens and investors need to accelerate efforts for the aforementioned projects to further marginalize Russian energy supply to Europe.

Besides offering full support for the three energy infrastructure projects, US officials also expressed satisfaction about the recent launch of the Greek-Bulgarian IGB gas pipeline as well as ongoing plans for a pipeline to run from Greece to North Macedonia.

However, the US officials kept a distance from the discovery of gas deposits by Israel, Cyprus and Egypt in the east Mediterranean, as well as the East Med gas pipeline plan – which would connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline – presumably to avoid upsetting Turkey, despite problems that have weighed down US-Turkish ties of late.

 

Greek-Egyptian grid link prospects gaining ground

Posted on by admin

A prospective Greek-Egyptian subsea grid interconnection, planned to exclusively transmit green energy from Egypt to Greece as a means of increasing the energy-mix share of renewables in Greece and the wider region, while also bolstering energy security in Europe, has gained further ground on a number of key fronts.

Political support has been expressed, progress is being achieved on the project’s engineering study, and the Copelouzos group, seeking to develop the project, is in talks with potential investors.

As for the technical side, agreements are being worked on for a detailed engineering study as well as a feasibility study for the project, whose cable installation will reach as deep as 2.7 kilometers at certain sections.

A Copelouzos group team headed by its president, Dimitris Copelouzos, has held talks in Cairo with Egyptian president Abdel Fattah El-Sisi and other leading Egyptian officials on regions where wind and solar farms could be developed to feed the Greek-Egyptian subsea cable.

The focus of these talks, also involving Egypt’s minister of electricity and renewable energy Dr. Mohamed Shaker El-Markabi, was on developing wind energy facilities in areas offering wind speeds of more than 10 meters per second. Such speeds are exceptional, well over those of locations hosting Greece’s best-performing wind energy facilities, where wind speeds reach 6.5 to 7 meters per second.

As for the solar energy sector, production tariffs of between 15 and 17 dollars per MWh offered at previous auctions in Egypt, a country offering flat land, are extremely competitive compared to prices in the Greek and Italian markets, even if energy transportation costs to Europe are taken into account.

Solar and wind energy investments offering a total capacity of 9.5 GW are planned to be developed in Egypt by the Copelouzos group, with partners, at a cost of approximately 8 billion euros. European, US, Middle East and Japanese companies have expressed interest to join the Copelouzos group for these projects.

Though investor interest for the Greek-Egyptian grid interconnection is strong, the European Commission’s stance will be crucial as it will be called upon to decide on the project’s inclusion in the projects of common and mutual interest (PCI/PMI) list, which would ensure EU funding support.

The Copelouzos group submitted its application last December. Brussels is expected to release PCI/PMI short lists in June, followed by finalized decisions in November.

Energean moving ahead with wider exploration and development plan

Posted on by admin

Energean is moving ahead with its exploration and development program both in Israel and in other Mediterranean markets following the commencement of production at its Karish field, offshore Israel, and positive results from the neighboring “Zeus” and “Hermes” wells.

Energean has reported significant developments regarding the installation of a second processing line at its Karish North field, which promises to upgrade production to 8 billion cubic meters and 32,000 barrels of oil in total. The upgrades are expected to be completed by the end of 2023.

Along with its first-half results, the company has noted its next step is first gas production from the NEA/NI license in Egypt. Subsea installations have been completed and gas production is expected to commence by the end of this year.

Meanwhile, Energean plans to conduct four more drilling efforts at its Abu Qir licence, also in Egypt, in 2023 and 2024.

As for its offshore Cassiopea license in Italy’s Strait of Sicily, Energean plans to begin gas production in the first half of 2024 with an objective to boost its production in Italy from 9,300 bpd at present to 20,000 bpd.

Energean has made two important discoveries at its Athena and Zeus offshore Israel licenses, both west of Karish. The Athena field has been certified, by an independent appraiser, as having potential reserves (2C) of 11.75 bcm of natural gas, while, two weeks ago, an initial estimate of 13.3 bcm of natural gas was made for the Zeus field.

Energean has also made a third discovery further south, at Block 31 (Hermes deposit), estimated to be holding between 7 and 15 billion cubic meters. Drilling at the Hercules well, in the same area, has been in progress over the past few weeks.

Energean has announced it will have a report, from an independent appraiser, on the potential of new discoveries in early 2023, the company’s aim being to present a specific development plan in the first half of the year.

Options being considered for additional volumes include the sale of additional gas to the Israeli market, exports to Egypt, as well as exports to Cyprus with the prospect of liquefaction for sales of quantities to European markets.

Energean has already signed contracts for the supply of 7.2 billion cubic meters of gas to Israel. Significant quantities are expected to start reaching customers in 2023.

ExxonMobil-Helleniq Energy seismic surveys off Crete

Posted on by admin

US oil and gas corporation ExxonMobil has been conducting seismic surveys under complete secrecy and at a rapid pace over the past week or so at two offshore block licenses, west and southwest of Crete, held with Helleniq Energy, formerly named ELPE, as its junior partner.

The two blocks share similar geological traits with Egypt’s giant offshore Zohr gas field and, according to early estimates, may contain rich natural gas quantities.

American presence is being assured, through ExxonMobil, in the southeast Mediterranean region at a particularly critical geopolitical period, both because of the Russian invasion of Ukraine and Turkey’s provocative moves against Greece (aggressive rhetoric and the Libya pact), political analysts told energypress.

ExxonMobil acted swiftly to increase its stake in a consortium holding licenses for the two offshore Cretan blocks following a recent  decision by France’s TotalEnergies to withdraw. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator.

The ExxonMobil-led seismic surveys off Crete, which began on October 24, are being conducted by Norway’s PGS and the company’s Sanco Swift seismic vessel. It is conducting 3D surveys, meaning ExxonMobil is focusing on specific areas for possible natural gas deposits.

DG Energy chief in Athens for talks on range of key projects

Posted on by admin

The European Commission’s Director-General for Energy Ditte Juul-Joergensen will be discussing a range of issues with the energy ministry’s leadership at a meeting in Athens today, including Greece’s role in the Balkans, western Balkan interconnection projects, natural gas reserves ahead of next winter, as well as Greece’s list of projects related to REPower EU, Europe’s plan for an end to the continent’s reliance on Russian energy sources.

Athens’ plan for wholesale electricity market intervention through a mechanism designed to subdue price levels is also expected to be discussed. It still needs to be approved by the European Commission, according to government sources.

The energy ministry is confident this mechanism will be approved by Brussels following a related agreement reached by its leadership during a visit to Brussels in late May. Market officials have remained uncertain.

Greece is expected to seek funding support estimated between 7 and 8 billion euros through the REPower EU initiative for a total of 14 projects supporting energy efficiency and security.

These projects include an upgrade of the gas grid; installation of a new floating storage unit at the islet Revythoussa, just off Athens; the Dioryga Gas FSRU in Corinth, west of Athens; an FSRU at Alexandroupoli, in Greece’s northeast; the Blue Med hydrogen project; the prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north; IGB and TAP capacity boosts; as well as Greek-Egyptian and Greek-Bulgarian electricity grid interconnections.

Israeli power grid operator officials in Athens for grid link

Posted on by admin

The energy ministry and power grid operator IPTO seem determined to press ahead with two major grid interconnection projects, one to link Greece with Cyprus and Israel, the other Greece and Egypt, REPowerEU, Europe’s strategic plan aiming to end the continent’s reliance on Russian fossil fuels through energy-source diversification, being the driving force behind this action.

IPTO, according to sources, is just about ready to forward a proposal for participation in EuroAsia Interconnector, a consortium established for the development of the Israel-Cyprus-Greece grid interconnection.

Highlighting the activity concerning the project, officials of Israel’s power grid operator are in Athens for talks today with IPTO’s chief executive Manos Manousakis and other company officials.

The Israeli officials will also take part in an ensuing meeting with Greek energy minister Kostas Skrekas.

Israeli interest in the grid interconnection has grown following the European Commission’s decision to make available 657 million euros for the project’s Cyprus-Greece section.

The Israel-Cyprus-Greece grid interconnection will facilitate RES development in Israel, promising to contribute to the EU-27 aim for an end of Europe’s reliance on Russian fossil fuels.

The grid link, to measure 1,208 kilometers and offer a 1-GW capacity, will also end Cyprus’ energy isolation and offer energy security to Israel.

It is budgeted at 2.5 billion euros with completion slated for the end of 2025, if procedures go according to plan.

Manousakis, the IPTO chief executive, plans to visit Cairo during June for talks with officials at Egypt’s power grid operator, EETC. Progress on the prospective Greek-Egyptian grid link has been smooth. The two sides are now preparing for a feasibility study.

Skrekas, the energy minister, is expected to be in Egypt sooner, to take part in the East Med Gas Forum, scheduled for June 14 and 15. He is expected to meet with Egyptian energy ministry officials on the sidelines of this event, for talks on the Greek-Egyptian grid link.

This project, based on a proposal from the Copelouzos group, entails a subsea cable from Egypt to the Greek capital.

It is budgeted at 3.5 billion euros and will offer a 3-GW capacity for renewable energy, which will also be exported to other EU member states through grid interconnections linking Greece with neighboring countries.

Key energy infrastructure included in new recovery fund

Posted on by admin

The government, intending to make the most of its favourable geographic location for diversified natural gas supply in the wider region, plans to seek EU funding support, through the REPowerEU package, for a series of natural gas and electricity grid projects awaiting development.

These projects are planned to be included in the country’s revised EU Recovery and Resilience Facility, to be submitted to by the government to the European Commission by early July.

The investments will aim to end Greece’s reliance on Russian energy sources by 2027, as planned by the REPowerEU package.

Besides the addition of natural gas infrastructure, absent from Greece’s existing recovery plan as a result of the European Commission’s unfavorable view on funding support for projects concerning natural gas, seen as a transitional energy source towards zero emissions, the country’s revised plan will also seek to incorporate electricity transmission projects that will contribute to the reinforcement of renewable energy sources in Europe’s energy mix.

The government is believed to have already prepared its catalogue of electricity and natural gas infrastructure project proposals to seek funding through the REPowerEU initiative.

An electricity grid interconnection project to link the Greek and Egyptian systems and transmit green energy, exclusively, to Greece and the EU has been included in the Greek catalogue, sources informed.

An additional central gas pipeline, to run 650 km from Komotini, northeastern Greece, to Elefsina’s Patima area, west of Athens, has also been included in the Greek catalogue, following a request by DESFA, the gas grid operator.

Egyptian grid operator team in Athens for Greek grid link talks

Posted on by admin

A team of highly ranked officials from the Egyptian Electricity Transmission Company (EETC), headed by president and CEO Sabah Mashali, is in Athens for two days of talks, beginning today, on the development of the Greek-Egyptian grid interconnection.

The EETC officials are scheduled to meet today with a team of Greek power grid operator IPTO officials, headed by president and CEO Manos Manousakis, for a discussion on technical details concerning the grid interconnection.

Tomorrow, the EETC team is scheduled to meet with Greece’s energy minister Kostas Skrekas as well as development and investment minister Adonis Georgiadis.

A first step for the project was taken last October when the Greek and Egyptian energy ministers signed a related Memorandum of Understanding. As part of the agreement, the power grid operators of both countries have assembled a working group to conduct necessary preliminary work.

The group’s responsibilities, according to the MoU, include technical coordination to ensure the grid interconnection’s compatibility; facilitating the project’s licensing matters; as well as providing support for the project’s classification as an EU Project of Common Interest, which would ensure EU funding support.

The Greek-Egyptian grid interconnection is planned to exclusively transmit green energy from Egypt to Greece as a means of increasing the energy-mix share of renewables in Greece and the wider region and also bolstering energy security in Europe, prioritized following Russia’s invasion of Ukraine.

Prime Minister Kyriakos Mitsotakis, during a recent meeting with European Commissioner for Energy Kadri Simson, stressed the importance of the Greek-Egyptian grid link, noting it should receive European backing.

 

War, energy crisis hastening plans for new LNG facilities

Posted on by admin

Russia’s war on Ukraine and the energy crisis are precipitating new natural gas and LNG supply solutions, a development that has increased the importance of related projects planned in Greece.

The EU’s decision to drastically reduce the continent’s reliance on Russian gas by two-thirds this year and terminate the dependence prior to 2030 has increased the importance of supply routes not linked to Moscow’s interests.

This development has increased the feasibility of new infrastructure promising to facilitate natural gas and LNG supply to Europe from alternative sources.

A major US-EU agreement established late last week for supply of an additional 15 bcm, at least, of American LNG to the continent this year, and gradual supply increases further ahead in time, has greatly boosted the prospects for related infrastructure.

The EU intends to follow up on this agreement by also establishing further supply deals with other producers, including Qatar and Egypt, in an effort to increase its LNG imports by a total of 50 bcm.

The EU’s new direction, focused on LNG imports, is seen as essential as the deterioration in relations between Europe and Moscow is expected to last many years.

Related projects in Greece promise to serve as LNG gateways for the country as well as southeast and central Europe, while also establishing Greece as a gas hub with an increased geostrategic role.

The Gastrade consortium recently decided to begin planning a second FSRU for Alexandroupoli, northeastern Greece, as an addition to a prospective first unit.

Petroleum group Motor Oil aims to begin development of its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by the end of the year.

Gas grid operator DESFA is preparing to further upgrade its LNG terminal on the islet Revythoussa, just off Athens.

Also, the Mediterranean Gas company is planning to develop an FSRU at Volos port, on the mainland’s east coast. RAE, the Regulatory Authority for Energy, has already issued a license for this project.

In addition, another investor, still undisclosed, is set to begin licensing procedures for yet another FSRU in Greece, sources have informed.

 

 

 

Energean set for Israeli license drills, anticipating 110 bcm, exports to EU

Posted on by admin

Energean is preparing to conduct drilling operations at five Israeli EEZ offshore licenses secured by the company through a tender in 2017 and anticipates natural gas deposits of 110 billion cubic meters to serve exports to the EU, now looking for ways to end its reliance on Russian natural gas.

According to sources, Energean plans to begin its drilling effort within the next few days, at Block 12, before following up with drilling at Block 21 and Block 23.

Energean is also planning a follow-up confirmation drill at Karish and development at Karish North.

Energean plans to export, beyond Israel, natural gas extracted from all but one of the five aforementioned licenses, Karish.

Energean has already signed an agreement with Egypt’s EGAS for gas to reach the country via pipeline and, from there, via two terminals, be made available for export, including to Europe.

 

Copelouzos’ Greek-Egyptian grid link backed by leaders

Posted on by admin

The Elica Interconnection, a Greek-Egyptian grid interconnection planned by the Copelouzos Group, has received the backing of Greek Prime Minister Kyriakos Mitsotakis and his Egyptian counterpart Abdel Fattah el-Sisi, entrepreneur Dimitris Copelouzos, founder of the group, has informed journalists.

A preceding teleconference between the leaders of the two countries, with participation from the president of the European Investment Bank Werner Hoyer, is expected to result in EU funding for the project.

According to Copelouzos, the project is budgeted at more than 3.5 billion euros, of which 1.5 billion euros will be provided by a group of Greek banks. The project is also a candidate for the PCI list, enabling EU funding support.

The Copelouzos group had set its sights on this project from as far back as 2008. Its double subsea cable, to stretch 954 kilometers from El Sallum to coastal Nea Makri, northeast of Athens, promises to transmit low-cost green energy with a 3-GW capacity, of which one third will be provided to local industries and the other two thirds exported to fellow EU members.

More specifically, on the exports, 1 GW will be transported through the Greek-Italian and Greek-Bulgarian networks, while the other 1 GW will be used for hydrogen production, most of which will be exported to other parts of Europe.

Licensing and financing procedures for the project are being hastened as a result of Russia’s war on Ukraine as the Elica Interconnection promises to offer Greece and the rest of the EU yet another alternative energy source as part of the continent’s effort to restrict its dependence on Russia.

The Elica Interconnection is planned to be completed by late 2025 or early 2026.

Egypt appears keen to accelerate plan for natural gas pipeline to Greece

Posted on by admin

Egypt’s minister of petroleum and mineral sources Tarek El-Molla (photo, right) has underlined the potential of energy-sector collaboration between Cairo and Athens and the significance of an MoU signed by Egypt and Greece for joint development of energy infrastructure.

The Egyptian minister was speaking at the annual Egypt Petroleum Show, Egypts, before 2,000 attendants from 65 countries, among them top-ranked officials from multinational energy giants.

Agreements already signed between Egypt and Greece pave the way for the development of a subsea natural gas pipeline linking the two countries, El-Molla noted.

According to diplomatic sources, this special mention by the Egyptian minister highlights his country’s interest to push ahead with the natural gas pipeline project, which, on the one hand, would facilitate Egyptian natural gas exports to the EU and, on the other, help the continent further diversify its energy sources.

A further increase in activity between Athens and Cairo for an acceleration of procedures leading to the gas pipeline project’s development has not been ruled out by the diplomatic sources.

In addition, the potential of a subsea electricity grid interconnection between the two countries also seems to be gaining momentum, the diplomatic sources noted. Greek power grid operator IPTO and Egyptian counterpart EETC are collaborating on this latter project.

The current Russia-Ukraine problem once again highlights Europe’s need for further energy source diversification. Russia, through gas giant Gazprom, covers approximately one third of European natural gas consumption in the household and business sectors.

 

Emergency energy plan shaped should Russia invade Ukraine

Posted on by admin

The government’s emergency energy sufficiency plan should a Russian invasion of Ukraine occur over the next couple of months and interrupt Russian gas supply to Greece, a worst-case scenario considered unlikely yet not impossible, includes at least three additional LNG shipments from Algeria and Egypt, a switch to diesel powering of natural gas-fueled powered stations, wherever this is technically possible, as well as increased inflow of natural gas from Azerbaijan through the TAP route.

The country’s energy planning authorities continue to believe there is no cause for alarm, despite being under no illusions that the quantity of Russian gas supply received by Greece could be fully replaced in the event of a disruption.

External factors beyond the control of the country’s energy officials will be crucial should  Russian forces invade Ukraine. The duration of any conflict, weather conditions over the next couple of months, as well as the availability of additional gas orders, in a market where demand levels are already breaking records, are all crucial factors that would shape the severity of yet another crisis.

Energean to ramp up natural gas production in Egypt

Posted on by admin

Energean’s plans to develop and increase natural gas production from its concession areas in Egypt, have been discussed during a meeting in Cairo between H.E. the Minister of Petroleum and Mineral Resources of Egypt Tarek El Molla and Energean CEO Mathios Rigas.

During the meeting, Mr. El. Molla and Mr. Rigas discussed the company’s plan to link gas discoveries in North Idku and North El Amriya to the existing production facilities in Abu Qir, offshore Alexandria.

Mr. El Molla stressed the importance of the continuous cooperation and coordination between the ministry and international companies to speed up the implementation of new projects, aimed at increasing Egypt’s oil reserves and production.

“Energean is one of the foreign partners who invested in Egypt in the recent years after its acquisition of Edison’s assets worldwide”, the Minister of Petroleum and Mining Resources said. He added that the company has great potential and seeks to pump new investments to maximize the exploitation of gas resources from the Mediterranean region, which is a major center of its operations.

Mr. Rigas confirmed that Energean seeks to increase investments in natural gas development projects in the Mediterranean region. The company also focuses on implementing a plan for exploration and production activities in the deep layers using the latest technologies.

It should be noted that, in 9M 2021, Energean’s production from the Abu Qir fields averaged 4.3 million cubic metres and 4,000 barrels of oil (totaling app. 30,000 barrels of oil equivalent) per day. Production from the North Idku and North El Amriya fields is expected to commence in 2H 2022 and expected to average app. 2.2 million cubic metres and 2,000 barrels of oil (totaling app. 15,000 barrels of oil equivalent) per day.

 

DEPA Commercial, Egypt’s EGAS negotiating gas deal

Posted on by admin

Gas company DEPA Commercial is negotiating an agreement with state-controlled Egyptian gas firm EGAS for LNG supply, just weeks after Greek and Egyptian officials established a joint technical committee as a first step for the development of a Greek-Egyptian electricity grid interconnection.

Energy dealings between the two countries will be discussed at a meeting today in Cairo between Greek energy minister Kostas Skrekas and Egypt’s minister of petroleum and mineral resources Tarek El-Molla. Also, DEPA chief executive Kostas Xirafas will meet with the EGAS administration.

The Greek energy minister is also taking part in today’s 6th EastMed Gas Forum, in Cairo, along with his counterparts from Egypt, France, Israel, Italy, Jordan and the State of Palestine.

An announcement of a Greek-Egyptian gas agreement, following today’s sessions, has not been ruled out.

The prospect, promising DEPA Commercial greater diversity of sources and lower costs for its customers, has acquired greater significance as the EU finds itself embroiled in an intensifying energy crisis.

Greece and Egypt have also established a joint Exclusive Economic Zone, the recent agreement for the development of a Greek-Egyptian electricity grid interconnection emerging as a first step.

Greek-Egyptian technical committee formed for grid link

Posted on by admin

A joint technical committee has been formed as a first step for the development of a Greek-Egyptian electricity grid interconnection.

The working group’s formation was included in a Memorandum of Cooperation signed in mid-October by Greek energy and environment minister Kostas Skrekas and Egypt’s electricity and renewable energy minister Mohamed Shaker.

The establishment of technical specifications required by the grid interconnection project to ensure the project’s interconnectivity with the Geek and Egyptian grids is a key priority for the technical committee.

The committee will also explore the possibility of having the project included on the Projects of Common Interest (PCI) list, enabling EU funding support.

The interconnection project, whose development will entail the installation of an underwater cable linking the two countries, will exclusively facilitate transmission of renewable energy.

 

IPTO seeking active role in Cyprus, Israel, Egypt grid interconnections

Posted on by admin

Power grid operator IPTO is seeking an active role in the grid interconnections to link Greece with Cyprus and Israel, as well as Egypt, the company’s chief executive Manos Manousakis told yesterday’s Power and Gas Supply Forum, an online event staged by energypress.

Responding to questions as to whether IPTO is considering to acquire an equity stake in these projects, Manousakis noted that the operator’s role is to ensure the interoperability of the Athens-Crete and Crete-Cyprus power grid interconnections, a commitment made by the Greek government back in October, 2019.

The European Commission, engaged in ongoing exchange with IPTO in an effort to understand the level of maturity of these grid interconnection projects and, primarily, the interoperability of its systems, has mentioned that Brussels would be interested in the equity involvement of a European TSO, Manousakis informed.

Other priorities at IPTO include upgrading and expanding Greece’s grid interconnections with neighboring countries, which would boost cash flow in the domestic energy market through electricity exports, the chief executive noted.

A tender for the development of the local segment of a second transboundary grid interconnection linking Greece and Bulgaria, from Nea Santa, northeastern Greece, to Bulgaria’s Maritsa area in the south, will be completed this year, Manousakis informed.

New interconnections with Albania and North Macedonia are also being examined at present, he noted.

In addition, IPTO is close to signing a cooperation agreement with Italian operator TERNA for the development of a second Greek-Italian grid interconnection.

Furthermore, plans for an upgrade of the Greek-Turkish interconnection, a project linking the European and Turkish transmission systems, are also maturing, the IPTO chief informed.

 

 

Gas developments in the East Med

Posted on by admin

The international oil companies (IOCs) are still reeling under the impact of low oil and gas prices and massive losses and asset write-offs during 2020. ExxonMobil, under increasing pressure, is considering further spending cuts and even a shake-up of its board.

The path to full recovery will be slow and at the end of it, in 2-3 years, the IOCs will be different, placing more emphasis on clean energy and renewables.

In the meanwhile, around the East Med, Egypt is forging ahead. It has signed a new exploration agreement with Shell for an offshore block in the Red Sea. This is in addition to the 22 agreements signed during 2020 that included major IOCs such as ExxonMobil, Chevron, Shell, BP, Eni and Total. Moreover, EGPC and EGAS are planning to offer onshore and offshore exploration blocks for bidding in February.

This continuing activity led to the discovery of 47 oil and 15 natural gas fields in 2020, 13% more than in 2019, despite Covid-19.

Tareq El-Molla, Egypt’s petroleum minister, signaled earlier this month Egypt’s intention to expand its petrochemicals sector to take advantage of the country’s expanding hydrocarbon resources. Egypt has updated its petrochemical national plan until 2023 to meet the increasing prospects in this industry.

LNG exports

Egypt has also benefited from the recent increase in LNG prices, resuming exports from its liquefaction plant at Idku, with most exports going to China, India and Turkey. The country is also ready to resume exports from its second liquefaction plant at Damietta starting end February. This has been lying idle since 2012 due to disputes that have now been resolved.

LNG exports will mainly utilize surplus gas from the Zohr gasfield and possibly imports from Israel, should prices allow it.

In fact, the resumption of LNG exports from Idku relieved some of the pressure on Egypt’s gas market, which is in oversupply partly due to impact of the pandemic, but also due to falling gas demand in Egypt’s power sector and growth in renewable energy.

El-Molla said that Egypt is planning a revival of its LNG exports. But this depends greatly on what happens to global markets and prices.

The International Energy Agency (IEA) said that the Asian LNG demand and price spike in January was a short-term phenomenon and it is not an indicator that global demand will rebound in 2021. The IEA expects only a small recovery in global gas demand this year, after the decline in 2020, partly due to the pandemic. But given ongoing concerns over the pandemic, the rate of gas demand growth will remain uncertain. The IEA said the longer-term future of LNG markets remains challenging.

Gas from Israel

Chevron – having acquired Noble Energy and its interests in the region last year – with Delek and their partners in Israel’s Leviathan and Tamar gasfields, signed an agreement to invest $235million in a new subsea pipeline, expanding existing facilities. According to an announcement by Delek, the pipeline will connect facilities at Israeli city Ashod to the EMG pipeline at Ashkelon, enabling Chevron and its partners to increase gas exports to Egypt to as much as 7billion cubic meters annually (bcm/yr).

The partners signed agreements last year to export as much as 85bcm/yr gas to Egypt over a 15 year period. Gas supplies from Israel to Egypt started in January last year.

It is not clear at this stage if new agreements will be reached to fully utilize the increased export capacity from Israel to Egypt, but given Egypt’s gas oversupply this may not be likely.

These developments, though, show the vulnerability of Cyprus and the weakness of relying on trilateral alliances with Egypt and Israel for its gas exports.

EastMed gas pipeline

This is being kept alive by regional politicians. Only this week, Greece, Cyprus, Israel, Bulgaria, Hungary and Serbia confirmed their support for the EastMed gas pipeline.

While such developments are good politically, bringing like-minded countries around the East Med closer together, they are not sufficient to advance the project. This requires private investment and buyers of the gas in Europe. None of these is forthcoming, because the project is not commercially viable. By the time the gas arrives in Europe it will be too expensive to compete with existing, much cheaper, supplies.

Europe is also moving away from gas and from new gas pipeline projects. Catharina Sikow Magny, Director DG Energy European Commission (EC), covered this at the European Gas Virtual conference on 28 January. Answering the question how much natural gas will the EU need in the future, she said ZERO. She was emphatic that with the EU committed to net zero emissions by 2050, by then there will be zero unabated gas consumed in Europe. In addition, with the EU having increased the emissions reduction target from 40% to 55% by 2030, the use of gas in Europe will be decreasing in order to meet the 2030 and 2050 climate targets. She said that ongoing natural gas projects are expected to be completed by 2022 – with no more needed after that.

With exports to global markets becoming increasingly difficult, there are other regional options to make use of the gas discovered so far around the East Med, including power generation in support of intermittent renewables and petrochemicals, as Egypt is doing. The newly constituted East Med Gas Forum (EMGF) should place these at the heart of its agenda.

What about Cyprus?

Hydrocarbon exploration activities around Cyprus are at a standstill, partly due to the continuing impact of Covid-19, but also due to the dire state of the IOCs and the challenges being faced by the natural gas industry in general.

This lack of activity in resuming offshore exploration may be a blessing, taking the heat off hydrocarbons, while priorities shift to discussions to resolve the Cyprus problem and the Greece-Turkey maritime disputes.

Dr Charles Ellinas, @CharlesEllinas

Senior Fellow

Global Energy Center

Atlantic Council

3 February, 2021

 

Prinos field threatened by poor results, decline projection

Posted on by admin

Operations at the Prinos field, Greece’s only producing oil field, in the country’s offshore north, are in great danger of being disrupted following poor production figures in 2020 and a further decline predicted for 2021, a wider company update just delivered by Energean Oil & Gas, the field’s license holder, has suggested.

In 2020, production at the oil field reached just 1,800 barrels per day, while its inferior-quality output was sold at a discount price, between 7 to 8 dollars below Brent levels.

This level of output represents less than 4 percent of Energean’s overall production, which, last year, reached 48,000 barrels – mostly natural gas.

Output at the Prinos field is projected to drop below 1,500 bpd in 2021 as, even if a rescue plan for the facility is approved, related investments needed at the facility will take time to complete.

The rescue plan, announced last June by Energean and dubbed Green Prinos, envisions an adjustment for eco-friendly operations through a series of investments worth 75 million euros.

Energean’s administration, in its company update to analysts, expressed hope that a solution can be found in the first quarter of 2021 for its rescue plan, submitted to the Greek government, which then forwarded the plan to the European Commission.

The rescue plan has remained stuck at the European Directorate for Competition, whose approval is required.

Energean is considering the development of a carbon capture and storage project at its Prinos field, which would be the first in Greece, promising new life for the project, along with the support of investments at field E, whose development depends on the outcome of a financing bid, company officials informed.

Overall, the news for the Prinos field is not good. Losses incurred by this unit since September, 2019, when its crisis began before being further aggravated by the pandemic, have exceeded 100 million euros.

This loss, however, has not affected the overall financial results of Energean, generating significant earnings in Egypt, primarily. Israel, too, could become a major source of earnings for the company as of next year.

Brussels forwards new PCI list, to be finalized late this year

Posted on by admin

The European Commission’s fifth PCI (Projects of Common Interest) list in the electricity and natural gas sectors, being forwarded for public consultation, features, for now, a number of project additions and removals, compared to the previous edition.

Market officials and state authorities will have the opportunity to offer their views and observations over the consultation procedure’s twelve-week period before the European Commission adopts a finalized version of the fifth PCI list towards the end of 2021, based on an existing Trans-European Networks for Energy (TEN-E) framework, focused on linking the energy infrastructure of EU countries.

PCI projects are entitled to EU funding support. Brussels authorities introduced selection criteria revisions in December, ascertaining, however, that the impact of all projects, especially on CO2 emissions, will be appraised when finalizing the PCI list’s fifth edition.

The provisional list includes a number of electricity and gas sector projects concerning Greece.

Electricity-sector projects involving Greece include: a Bulgarian-Greek grid interconnection, expected to be completed in 2023; an Egyptian-Greek-Libyan grid interconnection headed by Green Power 2020 and scheduled for delivery in 2025; as well as three Egypt-Greece interconnections, two of these featuring Kykladika Meltemia SA as project promoter and expected to be respectively completed in 2025 and 2028, and a third headed by Elica SA and scheduled for completion in 2028.

An energy storage project planned by Eunice for Ptolemaida, northern Greece, and scheduled for completion in 2022 is a new entry on the PCI list.

In the natural gas sector, the PCI list includes: the Alexandroupoli FSRU (2022); a subsea pipeline between Greece and Italy, known as the Poseidon Pipeline (2025); EastMed, a pipeline planned to carry natural gas from the east Mediterranean to European markets, via Crete (2025); a compressor station in Thessaloniki’s Nea Mesimvria area (2022); a metering and regulating station in Megalopoli, Peloponnese (2025); a compressor station in Abelia, in Greece’s mid-north (2023); a compressor station in Kipoi, northeastern Greece (2024); a pipeline link for the Alexandroupoli FSRU (2022); a TAP pipeline capacity increase (2025); and the development of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece (2023).

EuroAsia project moving again, Egypt present with EuroAfrica

Posted on by admin

Development of the wider region’s two major electricity grid interconnections, the EuroAsia Interconnector, to link Greece, from Crete, with Cyprus and Israel, and EuroAfrica Interconnector, a complementary project to link Cyprus with the African continent via Egypt, was discussed at a meeting in Nicosia yesterday between Greece’s energy minister Costis Hatzidakis and his Cypriot counterpart Natasa Pilides.

Progress at EuroAsia Interconnector, whose launch is scheduled for late in 2023, was held back by a Greek-Cypriot dispute prompted by Greek power grid operator IPTO’s withdrawal of the wider project’s Crete-Athens segment from EuroAsia Interconnector, a consortium of Cypriot interests.

The Crete-Athens segment is now being developed as a national project by IPTO and subsidiary Ariadne Interconnection.

EuroAsia Interconnector and EuroAfrica Interconnector promise to develop Cyprus into an electricity hub. A 310-km cable from Israel and a 498-km line from Egypt will converge at coastal Kofinou, in Cyprus’ south. From this hub, an 898-km cable is planned to link Cyprus with Crete before reaching Athens.

At yesterday’s meeting, the Greek and Cypriot energy ministers primarily focused on EuroAsia Interconnector, the Crete-Cyprus-Israel project, at a more mature stage.

Budgeted at 2.5 billion euros, this project, regarded as an EU Project of Common Interest, will promote regional energy security and further RES penetration in all three participating countries, Hatzidakis noted. The EU, it is estimated, will need to contribute at least half the project’s value.

Cyprus is the only EU member state without electricity grid interconnections.

Germany’s Siemens was awarded a procurement contract last May for EuroAsia Interconnector’s HVDC converter stations, budgeted at 623 million euros.

EuroAsia Interconnector was initially planned to offer 2 GW but this capacity has been halved, for the time being, as the other 1 GW will be used for the Crete-Athens grid interconnection.

EuroAsia Interconnector’s Israel-Cyprus segment is budgeted at 900 million euros while the cost of the bigger Cyprus-Crete section is estimated between 1.6 and 1.8 billion euros.

 

Rescue talks for Prinos, Greece’s only producing field, making progress

Posted on by admin

Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Turkey tensions will not be escalated, ‘aim achieved’

Posted on by admin

Turkey will not continue intensifying its provocations in the East Mediterranean as the neighboring country has already achieved its main goal, a State Department declaration noting that the country is performing hydrocarbon exploration activities in disputed territory, Dr Konstantinos Nikolaou, a seasoned petroleum geologist and energy economist, supports.

Turkey’s provocations over the past few days – the country sent a seismic survey vessel into Greek EEZ waters for further exploration work following such initiatives in the past – represent part of a carefully planned strategy whose aim is to end Turkey’s East Mediterranean isolation of recent years and put the country back in the frame of the region’s hydrocarbon developments, experts believe.

Turkey has refused to sign the UN’s International Law of the Sea treaty, strongly disagreeing with Article 121, giving EEZ and continental shelf rights to island areas.

Instead, the country has followed its own rules, adjusting them as it pleases, to avoid giving any rights to island areas.

Besides seeking to reinforce the country’s position that rejects any EEZ rights for islands, the latest Turkish moves also aim to cancel EEZ agreements signed by Cyprus with Egypt, Israel and Lebanon.

Turkey has unsuccessfully sought to sign an EEZ agreement with Egypt, during Muslim Brotherhood times.

Dr. Nikolaou predicts that there will be no Turkish movement south of Crete as the transfer of an area by Libya, Turkey’s regional partner, would be required. The area of Benghazi is not controlled by Fayez al-Sarraj, the head of Libya’s UN-recognized government, but by renegade commander Khalifa Haftar.

Ultimately, the Turkish strategy in the wider region is aiming for co-exploitation of hydrocarbon deposits that may be discovered.

Chevron buys Noble Energy, US striving for regional control

Posted on by admin

Energy corporation Chevron has become the latest American giant, following ExxonMobil, to establish itself in the east Mediterranean upstream market following a five billion-dollar acquisition of Noble Energy, a deal that adds the gigantic Leviathan gas field in Israel’s EEZ to the California-based buyer’s portfolio and elevates the petroleum group into a dominant regional player.

This latest development highlights America’s strategy for the region, aiming to establish US control of production at new gas fields as well as supply to Europe, analysts noted.

Chevron’s acquisition of Noble Energy, highlighting the upstream industry’s elevated interest in the east Mediterranean, comes amid increased regional tension prompted by Turkish provocation. Greece’s neighbor has just sent a seismic survey vessel into Greek waters for hydrocarbon exploration activities.

Besides the Leviathan gas field’s recoverable reserves, estimated at 22 trillion cubic feet, the Chevron portfolio now also takes on Israel’s Tamar field, whose gas reserves are estimated at 7.1 trillion cubic feet.

Noble has proved reserves of 2.05 billion barrels of oil and gas to add to Chevron’s reported 11.4 billion.

Chevron, whose earnings in 2019 reached 139.9 billion euros, also adds to its assets, totaling 237.4 billion dollars, the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet. Noble Energy is among this field’s operators.

Chevron’s control of the Leviathan gas field also secures American influence over the EastMed gas pipeline planned by Israel, Cyprus and Greece.

Fellow American petroleum giant ExxonMobil recently discovered, within the Cypriot EEZ, the Glafkos gas field, estimated to carry between 5 and 8 trillion cubic feet of gas. ExxonMobil has also taken on major licenses in Egypt and is also a member of a consortium formed with France’s Total and Hellenic Petroleum (ELPE) for licenses at offshore blocks west and southwest of Crete.

 

Greece looks to build on Italian East Med interest at Cairo event

Posted on by admin

Energy minister Costis Hatzidakis will be looking to build on yesterday’s interest expressed by Greek gas grid operator DESFA’s main shareholders – Snam, Enagas and Fluxys – in the planned East Med gas pipeline project, especially Italy’s Snam, when he meets with regional counterparts at the Eastern Mediterranean Gas Forum in Cairo, an event encouraging collaboration on gas trade in the region.

The energy ministers of Greece, Cyprus, Egypt, Israel, Italy, Jordan and the Palestinian Authority are scheduled to participate at the Cairo event.

Snam chief executive Marco Alvera expressed particular interest in the East Med gas pipeline at a meeting yesterday involving Greek Prime Minister Kyriakos Mitsotakis and the chiefs of the Italian company’s DESFA partners, Enagas and Fluxys.

Snam’s interest in the prospective East Med gas pipeline, to carry natural gas from Cypriot and Israeli fields to the EU via Italy, follows that of Energean and represents further investor confidence in the sustainability of the pipeline as it possesses commercial appeal for gas producers in the east Mediterranean as well as gas sales.

Participants at the Eastern Mediterranean Gas Forum are hoping the event is upgraded into a transboundary organization for gas cooperation. If an agreement on a forum charter is achieved, a signing ceremony will take place in Cairo tomorrow.

Besides participating at the forum, Hatzidakis, Greece’s energy minister, has also lined up meetings with his Cypriot, Israeli and Egyptian counterparts, Giorgos Lakkotrypis, Yuval Steinitz and Tarek el-Molla, respectively, for talks on the next steps needed to develop the East Med pipeline.

In addition, Hatzidakis will discuss prospective electricity grid interconnections between Greece and Egypt and also meet with Italy’s economic development minister Stefano Patuanelli, responsible for the country’s energy portfolio, who recently forwarded a letter of support for the East Med project to his Greek counterpart.