A consortium comprised of Spanish petroleum group Repsol and Energean Oil & Gas has surrendered its hydrocarbon exploitation and production rights for on onshore license in the Etoloakarnania area, northwestern Greece, the partners informed EDEY, the Greek Hydrocarbon Management Company, last Friday, sources have revealed.
The partners attributed this decision to the sharp drop in oil prices that has made upstream investments unfeasible, as well as their environmental footprint efforts.
Repsol is also preparing to withdraw its interests from an offshore block in the Ionian Sea through a license it shares with Hellenic Petroleum (ELPE).
In addition, the Spanish group is reconsidering its interests in a license for an onshore block in Ioaninna, also in Greece’s northwest, sources informed. Repsol holds a 60 percent stake in this license, the other 40 percent belonging to Energean Oil & Gas. The partners face an April deadline for an investment decision concerning initial drilling.
Three months earlier, Repsol, through a strategic business plan covering 2021 to 2025, announced exploration and production investment cuts worth 700 million dollars, annually. The company plans to focus its activities in 14 countries, not including Greece.
Spanish petroleum firm Repsol, a member of consortiums holding licenses to three fields in Greece, is on the verge of leaving the country’s upstream market as a part of a wider strategic adjustment prompted by the oil crisis and the pandemic, developments that have impacted exploration plans, as well as a company plan to reduce its environmental footprint, sources have informed.
The upstream industry has been hit hard by the pandemic, which has driven down prices and demand. The EU’s climate-change policies are another key factor behind Repsol’s decision.
Repsol is believed to have decided to significantly reduce the number of countries in which it is currently present for hydrocarbon exploration and production, the intention being to limit operations to the more lucrative of fields.
All three fields in Repsol’s Greek portfolio are still at preliminary research stages and do not offer any production assurances, meaning they will most probably be among the first to be scrapped by the company from its list of projects.
Respol formed a partnership with Hellenic Petroleum (ELPE) for offshore exploration in the Ionian Sea. Repsol is the operator in this arrangement. A license secured by the two partners for this region in 2018 was approved in Greek Parliament a year later.
Also, in 2017, Repsol agreed to enter a partnership with Energean Oil & Gas, acquiring 60 percent stakes, and the operator’s role, for onshore blocks in Ioannina and Etoloakarnania, northwestern Greece.
Repsol maintains interests in over 40 countries, producing approximately 700,000 barrels per day.