hydrocarbons

Hydrocarbons model adopted for offshore wind farms

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The government plans to base its offshore wind farms development strategy on a model successfully used in the hydrocarbons sector. Seismic surveys conducted by Norwegian offshore survey company PGS, a legal framework and other useful details were put into a data room for interested parties with letters of guarantee to examine.

A special purpose vehicle to represent EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, and power grid operator IPTO, for commissioning wind and deep-sea studies at marine areas to host a first wave of 1.9-GW in offshore wind farms will be established as soon as a related legislative revision drafted by the energy ministry is ratified.

The SPV, which should be ready to operate towards the end of March, will then announce a tender for these wind and deep-sea studies, expected to require two years to be completed.

Swift action will be needed so that 1.9 GW in offshore wind farms are under development by the end of the decade, as noted in the National Energy and Climate Plan for 2030.

EDEYEP is already scouring the European and international markets for companies qualified to perform the wind and deep-sea studies, a difficult task as the challenges of exceptionally deep waters will need to be overcome. Few companies are believed to possess the experience to take on these studies.

 

Crete seismic survey results, looking promising, in March

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Initial results of 2D seismic surveys conducted by the ExxonMobil-Helleniq Energy consortium at plots off Crete are expected in March, when the consortium plans to inform the Greek government.

If these early results are promising, the ExxonMobil-Helleniq Energy consortium is expected to seek permission from the Greek government to conduct exploratory drilling.

Back in 2022, Prime Minister Kyriakos Mitsotakis, during a visit to the headquarters of EDEY – now reformed to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company – had announced that the country needs clarity on whether it possesses exploitable deposits. The time to know is now approaching.

Greece’s hydrocarbon prospects could go either way, though, according to some sources, preliminary results are encouraging enough for the ExxonMobil-Helleniq Energy consortium to seek permission for exploratory drilling.

Interest in EDEYEP’s program, announced over a year ago, for 2D and 3D seismic surveys at a total of six blocks, both onshore and offshore – in Corfu, the Ionian Sea, Ioannina, the Gulf of Kyparissia, and west and southwest of Crete – is now heating up again.

At present, the two offshore Cretan blocks surveyed by the ExxonMobil-Helleniq Energy consortium are attracting most interest. It has been rumored for quite some time now that Chevron, the world’s second-biggest producer of natural gas, is interested in joining this consortium.

Quite clearly, if expectations are fulfilled and rumors of significant recoverable hydrocarbon deposits are confirmed, Greece’s energy landscape will be completely reshaped.

The Cretan offshore blocks are situated at a distance from sea areas claimed by Libya, which, last January, had expressed mild protest against seismic surveys conducted southwest of Crete on behalf of the ExxonMobil-Helleniq Energy consortium.

The Greek Foreign Ministry responded by informing the Tripoli government that these seismic surveys took place in areas under Greek jurisdiction, in accordance with rules of the International Law of the Sea.

Israel approves Energean’s phase 1 of Katlan Field Development Plan

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London, 18 January 2024 – Energean plc (LSE: ENOG TASE: אנאג) has provided an update on recent operations and the Group’s trading performance in the 12-months to 31 December 2023 together with guidance for 2024. This information is unaudited and subject to further review. Energean will release its 2023 full year results on 21 March 2024.

Mathios Rigas, Chief Executive Officer of Energean, commented:

“2023 was the year we became the major independent gas producer in the Mediterranean. Despite the challenging regional geopolitical developments, we stabilised the production of the Energean Power FPSO, which operated at 99%[1] uptime during Q4 2023, and we produced at a maximum rate of 150 kboed from our 1 billion+ boe pan-Mediterranean portfolio, with full year production in line with our latest guidance. 

“Energean has always focused on stable, long-term value creation and delivery for all our stakeholders. We are making good progress on the path to our near-term targets of 200 kboed, $1.75 billion adjusted EBITDAX and leverage of c.1.5x. Our strong operational and financial performance underpins our stated dividend policy. 

“2024 shows significant potential; we are well advanced with our core strategic projects across Israel, Egypt, Italy and Greece, and have extended our footprint with a new gas development in Morocco. As we continue to optimise our portfolio, we look forward to enhancing our position as the leading independent gas-focused exploration, development and production company in the region.” 

“I want to thank all our staff for their dedication and commitment to Energean; it is their excellence, during a uniquely challenging time, that has driven our success.”

Operational Highlights

  • FY 2023 production of 123 kboed (83% gas) in line with latest full year guidance of 120-130 kboed.
    • Day-to-day production in Israel continues to be unimpacted by the ongoing geopolitical developments.
    • FPSO uptime (excluding planned shutdowns) was 99%1 in Q4 2023.
  • NEA/NI (Egypt) project completed on time and on budget, with the PY#1 and NI#1 wells brought online at the end of December 2023; production in line with expectations.
  • New areas of development underway to expand and diversify the current business base:
    • Phase 1 of the Katlan (Israel) Field Development Plan approved by the Israeli Government[2]; Final Investment Decision (“FID”) expected upon finalisation of the Engineering, Procurement and Construction (“EPC”) terms, which are currently under negotiation.
    • New potential areas of growth in Italy following the conclusion of the PITESAI review, which has opened up previously frozen concessions in the Upper Adriatic and Sicilian Channel.
    • Discussions initiated to merge the Abu Qir, NEA and NI (Egypt) concessions to streamline the fiscal terms and extend the economic life of the fields.
    • Morocco farm-in expected to complete in the coming months; appraisal well planned for 2024.
  • Prinos Carbon Storage project progressing well and now included within the European Commission’s Projects of Common Interest.

Corporate and Financial Highlights

  • Strong financial performance for the 12 months to 31 December 2023, following the first full year of production contribution from Karish (Israel).
    • Revenues of $1,419.4 million, a 93% increase (FY 2022: $737.1 million).
    • Cost of Production per barrel (excluding royalties) of $6.5 , a 59% decrease (FY 2022: $15.9/boe).
    • Adjusted EBITDAX of $925 million, a 119% increase (FY 2022: $421.6 million).
  • Strong balance sheet maintained; ongoing deleveraging:
    • 50% reduction in Group leverage to 3x (FY 2022: 6x).
    • Group cash as of 31 December 2023 was $372 million, including restricted amounts of $26 million Total liquidity was $607 million.
    • No immediate debt maturities following Energean Israel’s bond refinancing in July 2023.
  • Q3 2023 dividend of 30 US$cents/share paid on 29 December 2023; total of 120 US$cents/share ($214million) returned to shareholders in 2023.
  • Scope 1 and 2 emissions intensity of approximately 9.4 kgCO2e/boe, a 41% reduction versus the 12 months ended 31 December 2022.
    FY 2023 FY 2022 Increase / (Decrease) %
Average working interest production kboed 123 42 200%
Sales and other revenues $ million 1,419 737 93%
Cash Cost of Production $ million 478 (of which 185 is royalties) 284 (of which 46 is royalties) 68%
Cash Cost of Production ($/boe) 10.6 (of which 4.1 is royalties) 18.9 (of which 3.0 is royalties) (44%)
Adjusted EBITDAX[3] $ million 925 422 119%
Development and production expenditure $ million 566 729 (22%)
Exploration expenditure $ million 57 140 (59%)
Decommissioning expenditure $ million 19 9 110%
31 December 2023 31 December

2022

 Increase / (Decrease) %
Net Debt (including restricted cash) $ million 2,849 2,518 13%
Leverage (Net Debt / Adjusted EBITDAX) 3x 6x (50%)

Ολοκλ

Outlook

  • 2024 working interest production is expected to be between 155 – 175 kboed (weighted towards the second half of 2024), a significant step up towards Energean’s near-term targets.
    • This range is primarily driven by Energean’s gas demand outlook for 2024 in Israel, which has been influenced by the coal phase-out delays and warmer than average winter temperatures so far.
  • Remaining growth projects expected to be brought online in 2024:
    • Karish North first gas in Q1 2024; the second oil train will be installed as soon as the security situation allows.
    • Cassiopea first gas expected in the summer of 2024.
  • 2024 development and production capital expenditure expected to be $400-500 million
  • Results of the Orion-1x exploration well (Egypt).
  • Quarterly dividend payments intended to be declared in line with previously communicated dividend policy. 

Energean Operational Review

Production

In the 12 months to 31 December 2023, average working production was 123 kboed (83% gas), within the latest guidance range of 120-130 kboed. Q4 2023 production averaged 135 kboed (83% gas).

In Israel, production averaged 485 mmscfd (5 bcm/yr equivalent) in the fourth quarter, primarily as a result of the planned six-day shutdown in early December to enable the hook-up of the Karish North well and second gas export riser. The FPSO uptime during the quarter was 99%1. Day-to-day production remains unimpacted as a result of the ongoing geopolitical developments.

Portfolio-wide production in 2024 is expected to be 155-175 kboed. This range is primarily driven by Energean’s gas demand outlook for 2024 in Israel, which has been influenced by the coal phase-out delays and warmer than average winter temperatures so far.

Energean is actively seeking additional gas contracts, to continue supporting the domestic demand, expanding to export in the medium-term.

  FY 2023

Kboed

 FY 2024 guidance

Kboed
Israel 87

(including 4.4 bcm of sales gas)

 115-130

(including 5.7-6.4 bcm of sales gas)
Egypt 25 (86% gas) 29-31
Rest of portfolio 11 (34% gas) 11-14
Total production 123 (83% gas) 155-175

 Development

Israel – Karish Growth Projects

Karish North is expected online in Q1 2024 and will utilise the second gas export riser, which has been fully installed, once onstream.

The second oil train will be will be installed as soon as the security situation allows.

Israel – Katlan

Energean intends to develop the Katlan/Tanin area in a phased development. Phase 1 includes the Athena, Zeus, Hera and Apollo accumulations, for which the field development plan was approved by the Israeli Government in December 2023. Energean expects to take FID expected upon finalisation of EPC terms, which are currently under negotiation.

Egypt

The NEA/NI development was completed in December 2023, with the remaining two wells PY#1 and NI#1 brought online on 30 December 2023. Overall production from the fields is currently 72 mmscfd (13 kboed), in line with expectations.

An infill well (NAQPII#2) on the Abu Qir field began drilling in December 2023 and was brought online in January 2024. Energean is evaluating other infill and step-out exploration opportunities around its Abu Qir hub.

Energean is working in partnership with the Egyptian authorities to merge its three production concessions (Abu Qir, NEA and NI) into a single concession. The resultant single concession is expected to streamline the fiscal conditions and extend the economic life of the fields.

At 31 December 2023, net receivables (after provision for bad and doubtful debts) in Egypt were $149 million (30 September 2023: $162 million), of which $101 million (30 September 2023: $119 million) was classified as overdue.

Italy

At Cassiopea (W.I. 40% non-operator), drilling operations began in November 2023. First gas remains on track for the summer of 2024. Also in 2024 on the Cassiopea licence, Energean expects to participate in two near-field drilling targets (Gemini and Centauro) with its partner ENI (operator; 60%).

In December 2023, the Italian government introduced a new framework to unlock previously frozen concessions as part of its PITESAI review. Energean is subsequently focused on progressing certain non-operated concessions in the Upper Adriatic and Sicilian Channel, with the expectation to unlock additional reserves.

Greece

Energean’s Prinos Carbon Storage (“CS”) project in Greece has been included by the European Commission as a Project of Common Interest. Non-binding memorandum of understandings have been signed for c.5 million tonnes per annum of storage and EUR 150 million of grants have been committed. Energean is advancing the conversion of its exploration licence into a storage permit.

Exploration

Egypt

Drilling operations are ongoing on the Orion-1X exploration well (W.I. 19% subject to final government approvals expected shortly; non-operator) located on the North East Hap’y Concession, offshore Egypt.

 Energean Corporate Review 

Morocco country entry

As announced on 7 December 2023, Energean agreed to farm-in to Chariot Limited (“Chariot”, AIM:CHAR) acreage offshore Morocco, which includes the 18 bcm (gross)[4] Anchois gas development and significant exploration prospectivity. Approval by the Moroccan Authorities is expected in the near-term, with closing of the transaction expected shortly thereafter.

Energean (Operator) and Chariot plan to drill an appraisal well on the Anchois field in 2024.

Kerogen convertible

As announced on 13 December 2023, Energean received a conversion notice in respect of $50 million worth of convertible loan notes from Kerogen Investments No. 38 Limited, resulting in the issuance of 4,422,013 new ordinary shares (“New Ordinary Shares”) at a conversion price of GBP 8.3843 per New Ordinary Share. The New Ordinary Shares were admitted for trading on the London and Tel Aviv Stock Exchanges on 20 December 2023.

Dividend

In 2023, Energean returned a total of US$1.20/share to shareholders (approximately $214 million), representing four quarters of dividend payments.

In 2024, Energean intends to continue to pay quarterly dividends to its shareholders in line with its previously communicated dividend policy.

Net Zero progress

Energean’s scope 1 and 2 emissions intensity in the 12 months to 31 December 2023 was estimated to be approximately 9.4 kgCO2e/boe, a 41% reduction versus 31 December 2022 (16.0 kgCO2e/boe), in line with guidance. FY 2024 emissions intensity are expected between 8.5-9.0 kgCO2e/boe. 

2024 guidance 

FY 2024
Production  
Israel (kboed) 115-130
Egypt (kboed) 29-31
Rest of portfolio (kboed) 11-14
Total Production (kboed) 155-175
   
Consolidated net debt ($ million) 2,800-2,900
Cash Cost of Production (operating costs plus royalties)
Israel ($ million) 350-380
Egypt ($ million) 30-40
Rest of portfolio ($ million) 190-210
Total Cash Cost of Production ($ million) 570-630
   
Development and production capital expenditure
Israel ($ million) 150-200
Egypt ($ million) 30-50
Rest of portfolio ($ million) 220-250[5]
Total development & production capital expenditure ($ million) 400-500
Exploration and appraisal expenditure ($ million) 130-170[6]
Decommissioning expenditure ($ million) 40-50

Forward looking statements

This announcement contains statements that are, or are deemed to be, forward-looking statements. In some instances, forward-looking statements can be identified by the use of terms such as “projects”, “forecasts”, “on track”, “anticipates”, “expects”, “believes”, “intends”, “may”, “will”, or “should” or, in each case, their negative or other variations or comparable terminology. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that may cause actual results and events to differ materially from those expressed in or implied by such forward-looking statements, including, but not limited to: general economic and business conditions; demand for the Company’s products and services; competitive factors in the industries in which the Company operates; exchange rate fluctuations; legislative, fiscal and regulatory developments; political risks; terrorism, acts of war and pandemics; changes in law and legal interpretations; and the impact of technological change. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this announcement is subject to change without notice.

[1] Uptime is defined as the number of hours that the Energean Power FPSO was operating; the Q4 2023 figure excludes the scheduled 6-day shutdown that occurred in December.

[2] Energean intends to develop the Katlan/Tanin area in a phased development. Phase 1 includes the Athena, Zeus, Hera and Apollo accumulations, for which the FDP has received government approval.

[3] 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.

[4] As per Chariot’s latest competent persons report covering the Anchois Field that has certified gross 2C contingent resources of 18 bcm in the discovered gas sands

[5] Includes $20-25 million of expenditure on the Prinos Carbon Storage project in Greece, which is expected to be covered by EU grants

[6] Includes the Anchois appraisal well in Morocco

Offshore Crete drilling decision in 2024, signs encouraging

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ExxonMobil and Helleniq Energy, the holders of offshore licenses west and southwest of Crete, are awaiting the results of seismic surveys completed by Norwegian geophysical company PGS in February before deciding, within 2024, whether to take a next step and conduct exploratory drilling.

The partners are expected to reach a decision within the next twelve months.

Officials at EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, have already noted preliminary results of surveys are encouraging.

Drilling is unlikely over the next year, but if all goes smoothly, such work is expected to be carried out in 2025, unless the license holders opt to also conduct 3D seismic surveys, in which case drilling would be postponed until 2026.

 

Ruptured Israeli-Turkish ties to reshape regional energy map

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The rupture in Israeli-Turkish ties, vanishing any hope of Turkish president Recep Tayyip Erdogan’s unlikely proposal for the transfer of Israeli gas to Europe via a Turkish transit route, threatens to rebalance ties in the wider region and reshape the east Mediterranean’s energy map. Hydrocarbon exploration plans and major projects in the east Mediterranean will be impacted.

As an initial consequence, Erdogan’s open support for Hamas in the Israel-Gaza war ends any hope of Turkish collaboration with Israel on energy interests for a very long time.

Up until the outbreak of the Israel-Gaza war earlier this month, the Turkish president had seized on every opportunity to claim a role for Turkey as a constructive player on the east Mediterranean’s energy map.

Erdogan had proposed a closer energy partnership with Israel during a meeting with Israeli prime minister Benjamin Netanyahu in New York last month, even though such a prospect would have been highly improbable, given Israel’s mistrust of Turkey.

The latest deterioration in Israeli-Turkish ties provides Cyprus and Greece with an opportunity to establish themselves as trusted transit partners for transportation of Israeli natural gas to Europe.

Turkey could now reemerge as an aggressive player in the region, which could prompt Ankara to engage in illegal hydrocarbon exploration and drilling at undefined areas, as was the case in 2020, or even obstruct exploration and drilling plans by ExxonMobil consortium off Crete, testing Greek-Turkish ties.

Energy crisis brings fossil fuels back to the forefront

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The energy crisis has brought about a revival of the hydrocarbons sector, as highlighted by a growing number of energy companies that have decided to reactivate exploration and production projects that had been put on hold as a result of climate-target pressure. Much of this reignited upstream activity is occurring in Europe. Greece must not be left behind.

Yesterday, French oil and gas giant TotalEnergies announced it would boost fossil fuel output over the next five years, a contrast to its reduced production in recent years.

Earlier in the week, on Wednesday, the UK’s North Sea Transition Authority approved plans for production at the new Rosebank oil and gas field in the North Sea, estimated to contain approximately half a billion barrels of oil.

Norwegian upstream giant Equinor, holding the biggest stake in the Rosebank field, estimates production will begin in 2030, with initial investments seen reaching roughly 3.8 billion dollars before totaling approximately 10 billion dollars by 2051.

Two two months earlier, UK Oil & Gas Plc had announced it would recommence production at its Avington oil field, estimated to contain 60 million barrels. Production at this field had been disrupted at an embryonic stage six years ago, with output having reached just several hundred thousand barrels.

In late August, Norway, which has captured the biggest share of Russia’s lost natural gas supply to the EU, announced that a latest round of tenders for licenses at 92 locations, 78 in the Barents Sea and 14 in the Norwegian Sea’s northwest, had attracted interest from 25 companies, including majors such as Shell, ConocoPhillips, Equinor and Aker BP.

The heightened interest expressed by majors highlights a turnaround of their green-focused investment policies of recent years. Shell, for instance, has announced it will disrupt an investment cutback plan of between 1 and 2 percent, annually, until 2030, adding it will increase investments in natural gas.

The hydrocarbons sector is also making a comeback in regions closer to Greece, Italy being a prime example. Italy had stopped issuing new licenses for many years but took a turn in November, when officials announced the country will be holding tenders offering ten-year licenses that offer total production potential of 15 bcm in natural gas from deposits in the Adriatic Sea.

Quite soon, companies operating in Greece will receive results from seismic surveys conducted west and southwest of Crete (ExxonMobil – HelleniQ Energy); Gulf of Kyparissia (Helleniq Energy); Ionian Sea (HelleniQ Energy); and Northwest Ionian (Energean – HelleniQ Energy).

In addition, Energean is awaiting an environmental permit to proceed with exploratory drilling in the Zitsa area, close to Ioannina, northwestern Greece.

Given the international developments and Greece’s energy needs – 6 bcm of natural gas a year and 300 barrels of oil per day – imported at lofty prices, the Greek State must facilitate, it has become clear, the endeavors of companies seeking to move ahead with their projects.

Energean plc trading statement & operational update

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London, 18 May 2023 – Energean plc has announced an update on recent operations and the Group’s trading performance in the 3-months to 31 March 2023.

Highlights – Financial and Corporate

  • Revenues for the period were $288.8 million, a 69% increase versus Q1 2022 ($170.7 million)
  • EBITDAX for the period was $161.2 million, a 81% increase versus Q1 2022 ($89.6 million)
  • Group cash as of 31 March 2023 was $379.6 million (including restricted amounts of $11.5 million) and total liquidity was $943.5 million
  • Q1 2023 dividend of 30 US$ cents/share declared today, scheduled to be paid on 30 June 2023
  • Emissions intensity[1] for the period was 11.1 kgCO2e/boe, a 36% reduction versus Q1 2022 (17.2 kgCO2e/boe)
    • Emissions intensity1 in the four-months to 30 April 2023 was 10.1 kgCO2e/boe

Highlights – Operational

  • Production for the period was 94.4 kboed, a 161% increase versus Q1 2022 (36.1 kboed)
    • Production in the four-months to 30 April 2023 was 100.0 kboed (82% gas)
  • Commercial period under the gas sales agreements in Israel commenced for gas buyers on or before 1 April 2023[2], with production continuing to ramp up
  • Three hydrocarbon liquid cargoes cumulating in approximately 1 million bbls from Karish sold to Vitol year to date
  • The second gas export riser was successfully installed at Karish in March 2023; followed by key Karish North infrastructure in March and April 2023
  • Olympus development concept chosen to align with strategy to optimise free cash flows and shareholder value
    • Tie-back to Energean Power FPSO, with Olympus prioritised over Tanin
    • Production plateau maintained by monetising newly discovered resources that do not incur seller royalties nor carry export restrictions
    • Focus maintained on capital discipline: Lower cost development versus Tanin driving lower capital expenditure for the next phase of tie-backs to the Energean Power FPSO; plus avoiding significant capital expenditure to add capacity through FPSO expansion projects or a new FPSO/FPU
    • Production expected to underpin existing gas sales agreements plus target international markets that can be accessed through existing and planned third party infrastructure

Outlook

  • Full year production guidance revised to 125 – 140 kboed (from 131 – 158 kboed) due primarily to:
    • Revised gas sales forecast in Israel with full year quantities now expected to be 4.5 – 5.0 bcm (versus 4.5 – 5.5 bcm) due to the ramp up profile of buyer offtake and ongoing optimisation of the operations of the Energean Power FPSO
    • Higher-than-expected decline from NEA#6 in Egypt following the positive initial flow rates. There is no expected read-across to the PY#1 and NI#1 wells; extended flow testing is required at NEA#5 to confirm no read-across for this well. These three remaining NEA/NI wells are expected onstream over the course of 2023; NEA#5 drilling was completed in May 2023 with results in line with pre-drill geological expectations.
  • Karish growth projects on track for completion by end-2023
  • On track to deliver near-term targets of 200 kboed, $2.5 billion revenues, $1.75 billion EBITDAX and leverage < 1.5x in 2H 2024, and pay dividends in line with previously communicated policy
  • Final investment decision on the Olympus Area expected in late 2023
  • Orion 1X spud expected towards the end of the year

Mathios Rigas, Chief Executive Officer of Energean, commented:

“We are ramping up production from the Karish field and have seen four months of solid gas and liquids production in Israel, whilst optimising the operations of the Energean Power FPSO. Our Israeli gas contracts have moved to commercial status and our buyers are increasing nominations. This year, Energean expects to supply a significant proportion of Israel’s gas demand.

“This is why we are moving quickly to develop our newly discovered Olympus Area resource, as efficiently as possible. As there is limited incremental capex, the initial development concept is in line with our stated commitment to remain capital disciplined. With no seller royalty payments or export restrictions, this strategy will create sustainable value for all our stakeholders and allow us to maintain and grow our stated sector-leading dividend policy.

“We continue to focus on our Net Zero stated path through continuous reductions in our carbon intensity. We are and will remain a responsible hydrocarbon producer. We are committed to being the best version of Energean we can be: provide a secure and reliable energy supply, support our communities and underwrite the transition.”

 

[1] Scope 1 and 2 emissions

[2] With the exception of one GSPA, whose commercial period begins in November

ExxonMobil-Helleniq Energy offshore Crete surveys done

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Norwegian geophysical company PGS has completed 2D seismic survey work west and southwest of Crete on behalf of the ExxonMobil-Helleniq Energy consortium, holding licenses for blocks in the two areas.

Results offering a picture on the hydrocarbon prospects at these offshore Cretan areas are expected to be ready in approximately one years’ time, sources informed.

PGS’ Sanco Swift vessel spent nearly three-and-a-half months conducting seismic surveys at the two offshore blocks, measuring a total of 40,000 square kilometers, to collect data that will now be examined at the company’s specialized labs.

According to sources, PGS collected more than double the required seismic survey data for the ExxonMobil-Helleniq Energy consortium following an agreement with EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

The PGS vessel scanned 13,000 square kilometers of offshore territory, double the 6,500 square meters specified in the consortium’s license (3,250 square meters for each block).

Ensuing and more detailed 3D scans by the ExxonMobil-Helleniq Energy consortium at these blocks has not been ruled out, sourced noted. If so, this follow-up effort would take place during the final two months of 2023 or early in 2024, the sources added.

However, ExxonMobil, the consortium’s chief partner, is most likely to skip this stage and move straight on to drilling if the 2D seismic results are favorable.

 

PM: ‘Greece aiming to become energy exporter, energy security provider’

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Greece is aspiring to become an energy exporter and energy security provider, Prime Minister Kyriakos Mitsotakis has told members of the national Japanese business organization KEIDANREN during an official visit to Japan, the first by a Greek leader in 17 years.

Mitsotakis, heading a Greek delegation on a visit aiming to attract Japanese investments, told KEIDANREN members Greece has a significant role to play in Europe’s new energy structure now being developed.

This role is based on new infrastructure transforming the country into an energy hub, Greece’s prospective provision of energy security to the wider region, ongoing hydrocarbon exploration efforts, as well as investments for an increased RES-sector share of the country’s energy mix, the Greek leader noted.

“We are investing heavily in regasification facilities, especially in northern Greece. And we aspire to become an energy exporter and an energy security provider, at least for our Balkan neighbors,” the Prime Minister noted. “For the first time, we are actively exploring for potential natural gas deposits southwest of Crete. The exploration is being led by ExxonMobil and the initial findings are very, very promising,” he added.

Greece is one of the world’s ten biggest RES electricity producers, Mitsotakis pointed out while commenting on the significant role the country has to play in the new RES landscape developing in Europe.

Japan possesses the world’s biggest fleet of LNG tankers, in terms of value, according to 2022 data provided by Vessels Value, an internationally recognized data platform for ship valuations.

Japan’s LNG fleet was worth 30.3 billion dollars last year, the world’s highest, followed by Greece, at 29.9 billion dollars and South Korea, at 17.1 billion euros, according to Vessels Value figures.

 

Crete hydrocarbon hopes lifted by initial seismic survey results

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Initial findings of ongoing seismic surveys conducted at licenses off Crete have raised hopes of significant hydrocarbon discoveries, government officials have told an event staged by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

If the upbeat prospects generated by emerging data are confirmed during drilling, then quantities to be extracted off Crete will cover Europe’s projected energy insufficiencies, government officials contended on the sidelines of the EDEYEP event, staged last night to mark its transition from EDEY, the Greek Hydrocarbon Management Company.

A recent report released by IEA, the International Energy Agency, notes Europe will face annual energy shortages of 30 billion cubic meters for ten years, even if renewables, biogas and hydrogen are brought in to replace Russian natural gas quantities.

Norwegian company PGS is currently conducting 2D surveys at offshore blocks west and southwest of Crete on behalf of ExxonMobil and Helleniq Energy, formerly ELPE.

Local authorities expect drilling at these licenses to commence in early 2025.

Domestic upstream activity has increased, EDEYEP president Rikard Skoufias told the company event, noting seven seismic surveys have been staged in Greece over an eight-month period compared to just two over the past decade.

 

PM rules out new tender for hydrocarbon licenses

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Prime Minister Kyriakos Mitsotakis, fielding questions at a news conference yesterday, ruled out the possibility of any new international tender for additional licenses concerning onshore or offshore hydrocarbon exploration.

“We are not considering exploring other areas,” the Prime Minister informed, responding to a related question.

Reignited hydrocarbon exploration activity for natural gas deposits in Greece had generated rumors the government would consider staging additional tenders to grant new licenses for exploration south of Crete as well as at an offshore area between the island and the Peloponnese.

Commenting on the progress of surveys being conducted west and southwest of Crete by a consortium comprised of ExxonMobil and Helleniq Energy, formerly ELPE, the Greek Prime Minister said a clearer picture is expected towards the end of the year.

The ExxonMobil-Helleniq Energy consortium may extend the duration of its 2D seismic surveys at these blocks until the end of the first quarter to collect additional data. This could result in greater clarity and enable the consortium to skip the need for 3D surveys.

Elsewhere, Energean and Helleniq Energy are also pressing ahead with respective licenses in the Ionian Sea. Both companies have completed seismic surveys and expect to have received results towards the fourth quarter.

Energean holds a license for an offshore block northwest of Corfu and Helleniq Energy holds two licenses, Ionio and Kyparissiakos (Gulf of Kyparissia).

 

Bureaucracy, elections troubling upstream sector in Greece

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ExxonMobil, Energean and Helleniq Energy, formerly ELPE, all conducting hydrocarbon surveys at Greek licenses, have not only stuck to their schedules but even taken initiatives to speed up procedures for sooner-than-expected drilling. Even so, two factors beyond their control, namely bureaucracy and imminent elections, may hold up their plans.

Energean skipped 2D surveys at its Block 2 offshore license in the Ionian Sea’s northwest, moving straight on to 3D surveys.

Hellenic Energy moved swiftly in 2022 to complete 2D and 3D seismic surveys at two offshore licenses, Ionio and Block 10, both in the Ionian Sea.

ExxonMobil is considering to start drilling sooner than originally planned at its offshore Cretan licenses. As a result, it is staging more comprehensive 2D surveys for a clearer picture of geological details.

State bureaucracy is an obstacle for upstream companies operating in Greece. The overall procedure concerning social and environmental impact studies, which require energy ministry approval ahead of drilling, requires at least eight months to be completed.

Then, upstream companies usually require a further six months or so to make arrangements for drilling rigs, configure sites and identify a port or base area for their drilling rigs.

The uncertainty created by the upcoming Greek elections, expected within the first half of the year, is another factor troubling the efforts of upstream companies.

 

ExxonMobil drilling for gas off Crete may begin a year earlier

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ExxonMobil could begin drilling at licenses offshore Crete a year earlier than planned as the American energy giant tends to adopt a more direct approach when exploring for natural gas, sector authorities have noted.

Such was the case at Cyprus’ Block 10, for which ExxonMobil conducted seismic surveys before skipping the 3D survey stage to go straight ahead with drilling that led to the discovery of the Glafkos deposit, the officials pointed out.

A consortium comprised of ExxonMobil and Helleniq Energy, formerly ELPE, holds licenses for two offshore Crete blocks, one west of the island, the other southwest. The consortium has commissioned PGS to conduct 2D seismic surveys at both these licenses. They are in full progress and are expected to be completed towards the end of January.

According their original plan, ExxonMobil and Helleniq Energy planned to follow up with 3D surveys at the end of 2023 or early in 2024. However, if ExxonMobil, the consortium’s operator, opts to skip the 3D surveys, initial drilling offshore Crete will begin sooner, in 2024, instead of 2025.

Elsewhere, in the Ionian Sea, a consortium made up of Helleniq Energy and Energean expects to have the results of 3D surveys at three blocks, Ionio, Kyparissiakos, and Block 2, by the end of 2023 or early in 2024. It will then decide if it will continue with initial drilling.

 

Helleniq Energy set for 3D surveys at licenses in west

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Helleniq Energy, previously named Hellenic Petroleum (ELPE), is expected to begin conducting 3D seismic surveys at two offshore licenses, Ionio, in the Ionian Sea, and block 10 in the Gulf of Kyparissia, west of Peloponnese, within the next few days.

A Navtex for both endeavors has already been issued. PGS, commissioned to conduct the seismic surveys, will use its Ramform Hyperion seismic vessel. It will roll out twelve cables covering 8-km distances to scan sea beds for possible natural gas deposits.

The Ramform Hyperion seismic vessel appears to have completed work at the Ionian Sea’s block 2, adjacent to Italian territory in the Adriatic Sea, on behalf of a consortium comprising Energean and Helleniq Energy.

The vessel collected data from an area covering 2,000 square kilometers. Survey work at block 2 commenced in late October.

According to a Hellenic Hydrocarbons and Energy Sources Management Company (HEREMA) schedule, blocks 2 and 10 are expected to be ready for drilling by early 2024. Helleniq Energy conducted 2D surveys at both blocks last February.

 

 

 

Energean moving ahead with wider exploration and development plan

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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.

Helleniq Energy set for 3D surveys off Greece’s west

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Helleniq Energy is preparing to conduct 3D seismic surveys at two licenses, block 10 in the Gulf of Kyparissia, west of the Peloponnese, and the “Ionio” block in the Ionian Sea, within the next few weeks, chief executive Andreas Siamisiis has told analysts during a presentation of the group’s financial results for the nine-month period.

Helleniq Energy, which recently underwent a name change from ELPE (Hellenic Petroleum), had previously conducted 2D surveys at these two blocks last February. Its decision to take a step further with 3D surveys at the two licenses suggests a clearer picture of promising targets already identified is needed.

The energy group’s decision to move ahead with its hydroexploration plans reflects the overall determination of the government, HEREMA, the Hellenic Hydrocarbons and Energy Resources Management Company, and investors to press ahead with exploration programs to identify potential targets with natural gas reserves.

Elsewhere, Energean is pushing ahead with its survey work at block 2 in the Ionian Sea, adjacent to Italian territory in the Adriatic Sea.

In addition, an ExxonMobil-led consortium involving Helleniq Energy as a junior partner is moving rapidly with survey work at two offshore block licenses west and southwest of Crete.

 

Offshore Crete seismic surveys pave way for drilling in 2025-26

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A consortium headed by ExxonMobil plans to begin conducting seismic surveys at licenses south and southwest of Crete this winter, Prime Minister Kyriakos Mitsotakis announced yesterday, confirming previous energypress reports.

The timing of the prospective surveys is in line with a schedule announced earlier this year by HEREMA, the Hellenic Hydrocarbons and Energy Resources Management Company, which envisaged surveys for the winter of 2022-2023.

The seismic surveys are expected to be followed by higher-definition 3D surveys in 2024. If all goes according to plan, initial drilling at the offshore Cretan blocks could take place in 2025 and 2026, which, if successful, would result in development of hydrocarbon deposits in 2027, leading to production in 2029.

ExxonMobil increased its stake in a consortium holding licenses for two offshore Cretan blocks following a recent decision by France’s TotalEnergies to withdraw from the venture. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator. Helleniq Energy, formerly named ELPE, is the venture’s junior partner.

Older seismic surveys conducted in 2015 by Norway’s PGS for Helleniq Energy – operating, at the time, as ELPE – at the two offshore Cretan blocks south and southwest of the island showed promising signs of a major natural gas deposit.

 

Greece advances its upstream gas exploration program

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Following an announcement by Prime Minister Kyriakos Mitsotakis and successful geophysical surveys conducted in early 2022 in the Central and South Ionian, Greece’s national hydrocarbons and energy resources corporation, HEREMA, today announced the next steps in the country’s upstream exploration programme with the acquisition of a 3D seismic survey in the North Ionian Sea (block 2), and 2D seismic surveys West and South/West of Crete.

In April, the Prime Minister announced the country’s accelerated timeframe to explore Greece’s upstream potential, with focus on natural gas and the expansion of HEREMA, which today oversees upstream exploration, greenhouse gas management & sequestration, gas storage, offshore wind and international pipeline projects.

The surveys will take place during the winter months ahead, in order to minimize any environmental impact, and will be conducted in accordance with the best-in-class standards for environmental protection, including:

  • Use of the “soft start” protocol to ensure that marine mammals can temporarily depart from the seismic survey area prior to its commencement.
  • Doubling of marine mammal observers onboard the seismic survey vessel to ensure protection of cetaceans and other marine life within the safety zone.
  • Extension of the safety zone radius around the seismic survey vessel in case of detection of large marine animals.
  • Waiting period 30 minutes before the start and stop of each exploration activity.
  • Passive acoustic monitoring of underwater sounds for the measurement of sea noise levels and the detection of marine mammals.
  • Application of a 1 km exclusion zone around the “Natura” areas as well as fish farms.
  • Airborne monitoring of cetaceans during and after seismic surveys.
  • Full compliance with all applicable regulations and guidelines in accordance with MARPOL VI and ACCOBAMS conventions and JNCC guidelines.

Compliance with the above measures and all relevant procedures shall be ensured by the presence on board the research vessel of independent observers from HEREMA. Furthermore, during the surveys experienced specialized personnel is in constant communication with the involved local and regional port authorities as well as with the commercial and fishing vessels that sail near the survey areas in order to ensure the smooth execution of both the geophysical surveys as well as the daily activities in the specific areas.

Aris Stefatos, CEO of HEREMA, commented “we are very happy to announce this progress in line with the plan we announced with the Prime Minister earlier this year. International investors and partners in both conventional and renewable energies have reacted very positively to that plan. In August we welcomed ExxonMobil as new operator in Crete, and the pace at which we progress is evidence of our excellent cooperation with leading energy companies and service providers, such as ExxonMobil, Helleniq Energy, Energean, and PGS — a leading global seismic acquisition and processing company.”

Rikard Scoufias, Chairman of HEREMA hailed the progress and said “this marks another important milestone in our strategy to monetize Greece’s natural gas resources and our efforts to accelerate the transition to a more sustainable energy mix and strengthening security of supply. Greek natural gas can play an important role — not only for Greece, but also in support of the broader region and Europe’s increasing demand for domestic energy resources at a crucial time for energy security.”

HEREMA Profile

Hellenic Hydrocarbons and Energy Resources Management S.A. (HEREMA S.A.), formerly HHRM, is Greece’s independent State-owned company responsible for managing the country’s hydrocarbon resources. Following the appointment in 2020 of new leadership for the company, HEREMA’s strategic remit has been expanded and today encompasses the upstream sector, greenhouse gas management & sequestration, gas storage, international pipeline projects (including the EastMed pipeline, and the recently completed IGB interconnector), and offshore wind.

 

 

ExxonMobil-Helleniq Energy seismic surveys off Crete

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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.

Crete’s Hydrocarbon Potential to be Unveiled by the End of 2023⏐Upstream Development Programme in Full Swing⏐HEREMA’s Role in the Advancement of Offshore Windfarms

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Greece’s upstream exploration programme offshore Crete is proceeding without delays, with a first assessment of the two concessions’ natural gas potential expected by the end of 2023. This was the message delivered by the CEO of the Hellenic Hydrocarbons and Energy Resources Management Company (HEREMA), Aris Stefatos, during a press conference held alongside the company’s Chairman Rikard Scoufias. 

Following the withdrawal of TotalEnergies earlier this year from the blocks dubbed “West of Crete” and “Southwest of Crete”, U.S. energy giant ExxonMobil significantly upped its stake in both concessions, raising this from 40% to 70% for E&P activities, while also assuming the operatorship. Likewise, Greece-based Hellenic Petroleum increased its participation in both areas from 20% to 30%.

ExxonMobil has prepared an upgraded work programme for the first phase of upstream exploration activities – anticipating faster and higher quality results – with delivery expected within a 2-year period instead of the 3 years companies have at their disposal for said exploration stage.

According to Stefatos, any delays in the Cretan concessions can be attributed to the fact that the previous operator did not complete the minimum work programme within the stipulated three-year term. He added that HEREMA’s exploration program is well underway, in accordance with the company’s underlying strategy “Hydrocarbons 2.0”, underpinned by three pillars:

  • Accelerating the development of Greece’s upstream sector with a particular focus on natural gas.
  • Expanding the scope of HEREMA to new energy technologies that can support Greece’s country’s energy transition.
  • Strengthening governance and ensuring HEREMA has the capacity and resources to meet all aspects of its mandate.

Regarding the first pillar, in February 2022 the leadership of HEREMA launched an ambitious investor outreach programme targeting energy majors.  The company’s management noted that the results so far have being particularly encouraging.

Discussions are ongoing with companies that have expressed an interest in entering the Greek upstream sector, with priority being placed on concessions where there is a single investor. While Mr. Stefatos confirmed that another licensing round is not off the table, he stressed the importance of drawing in investors to pre-existing concessions.

HEREMA is also set to play a key role in the development of offshore wind parks in Greek seas, in accordance with its legally expanded work scope, leveraging upon the company’s wealth of expertise in offshore operations. It’s important to underline that offshore oil and gas installations boast strong similarities to the platforms used in offshore wind installations. To this end, the company is being strengthened with specialized technical personnel and the relevant logistical infrastructure to enable it to deliver upon its expanded remit.

HEREMA has been carrying out one-to-one discussions with interested parties, including potential domestic and foreign investors, in an effort to understand their concerns and priorities – deemed key for the development of Greece’s newly-established offshore wind sector. Last but not least, HEREMA recently inked a memorandum of cooperation with the Hellenic Centre for Marine Research (HCMR) focused on technical and environmental synergies.

Within the scope of new energy technologies, HEREMA’s expanded work scope additionally includes the licensing of carbon capture and storage (CCS) and underground gas storage (UGS) projects in Greece. Such projects could focus on the storage of natural gas and hydrogen in the future.  

Imminent key challenges 

While assessing key challenges moving forward, HEREMA’s Board of Directors underlined the importance of maintaining the momentum built during the last 12 months, while ensuring the company is provided with the necessary administrative and financial resources. Strengthening HEREMA’s capacity and resources is a primary challenge and will become even more critical as the company assumes its broader remit including natural gas storage, CO2 and greenhouse gas management, and supporting the offshore wind sector. It is noted that draft legislation for the modernization of HEREMA has been ready for adoption since January 2021 and will contribute to the creation of a more modern and efficient administrative framework.

More specifically, the board concludes “This is an important factor in maintaining investor confidence, but most importantly it serves to build an organisation with the staff, resources, and expertise required to manage a Greek “Hydrocarbons 2.0” programme that should only be initiated once the financial and human resources are in place to monitor and enforce the strictest standards for environmental protection and socio-economic impact management.” 

Ukraine war adds to complexity of Greek-Albanian EEZ dispute in Ionian

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An unresolved exclusive economic zone dispute between Greece and Albania over territorial rights in the Ionian Sea has become even more complicated as a result of Russia’s war in Ukraine, a conflict that has turned the Ionian and Adriatic sea areas into a hotbed of confrontation between NATO and Russia.

According to a recent report published by Italian daily La Reppublica, numerous incidents, both minor and more intense, have taken place in the Adriatic and Ionian seas between the escorting forces of the US 6th Fleet aircraft carrier Harry Truman and Russian warships. At least one of these incidents took place off Corfu, military sources have informed.

The naval incidents in the region are a result of its increased strategic importance for NATO with regards to the war in Ukraine as well as military preparations for any possible spread of the conflict beyond Ukraine.

Greece and Albania, following an agreement between the two countries, have begun procedures to take their Ionian Sea EEZ dispute to the International Court of Justice in The Hague. The consequences of the Ukraine war add to the issue’s complexity.

Energean and ELPE (Hellenic Petroleum), both holders of licenses in the Ionian Sea, are working to explore the region’s hydrocarbon prospects.

EDEY powers expanded, company entitled to offshore wind farm earnings

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The powers of EDEY, the Greek Hydrocarbon Management Company, have been expanded to cover a range of areas following a legislative revision made by the government.

EDEY has authority over matters such as management, control and monitoring of all relevant contracts that have been established in the past by the Greek State on behalf of third parties; exploration and evaluation of the country’s hydrocarbon potential, as well as assignment planning and supervision of exploration and evaluation of project potential.

EDEY also oversees applications for participation in tenders, in accordance with relevant provisions of existing law.

The company’s equity capital has been set at one million euros, paid by the Greek State in three equal installments, annually.

In addition, earnings resulting from the management of the Greek State’s rights and responsibilities regarding the development and operation of offshore wind farms will be regarded as income for the company.

 

Shell gas prospects in Albania promising for Ioannina license

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Albania’s prospects of significant oil and gas discoveries that could boost the country’s future and also play a big role in Europe’s energy future, as announced by Prime Minister Edi Rama, could spell good news for a nearby Greek license in the country’s northwestern Epirus region.

Dutch energy giant Shell, a company that likes to keep its cards close to its chest, is preparing for drilling activities at Albania’s Shpirag 5 license, following successful exploration at Shpirag 4, which has delivered production totaling many thousands of barrels per day.

Shell Upstream Albania, Shell’s Albanian subsidiary, has been active in the neighboring country since 2018, pledging to invest more than 40 million euros over a seven-year period.

As for the Epirus license, in Greece’s wider Ioannina area, a consortium comprising Repsol and Energean has invested over 40 million euros, primarily for a seismic survey conducted in 2018 and 2019, a procedure through which an area to be further explored has been identified.

 

Task force assembled to hasten hydrocarbon exploration

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A task force aiming to hasten the country’s hydrocarbon exploration and production procedures has been assembled following the signing of a related ministerial decision by energy minister Kostas Skrekas.

The plan to assemble a task force was announced approximately two months earlier during prime minister Kyriakos Mitsotakis’ visit to the headquarters of EDEY, the Greek Hydrocarbon Management Company.

The Greek leader took the opportunity, during his EDEY visit, to express support for the exploration of possible natural gas deposits in Greek offshore territory.

Dr. Theodoros Tsakiris, Associate Professor at the University of Nicosia and special adviser to the energy ministry, has been appointed head coordinator of the new task force, a five-member team.

According to energypress sources, the newly established task force will stage its first meeting within the current month.

Talks with representatives of companies holding licenses will be among the first initiatives to be taken by the task force for an assessment of administrative issues that may have been encountered by investors until now and discussion on proposals and experiences to date.

 

Sanctions on Russia boost Greece’s upstream prospects

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The EU’s revised natural gas strategy, seeking alternative solutions as a result of sanctions imposed on Russia, has created favorable conditions for Greece’s upstream sector as the Greek market could become a destination for upstream companies operating in Russia and now needing to shift.

EDEY, the Greek Hydrocarbon Management Company, has forwarded letters to upstream companies already maintaining interests in Greece, informing them of the government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY also intends to hold meetings with these upstream companies to determine their levels of interest in the Greek market and shape its actions accordingly.

Total and ExxonMobil maintain hydrocarbon interests in Greece as co-members of a consortium holding two offshore licenses, west and southwest Crete. The two companies each have 40 percent stakes in this consortium, Greece’s ELPE holding the other 20 percent.

The consortium, it is believed, aims to conduct seismic surveys next winter at the offshore Crete licenses, still at early exploratory stages.

Besides these two licenses, a further four licenses have been granted in Greece. Energean maintains an onshore block in the Ioannina area, northwestern Greece. The company also holds a 75 percent stake at Block 2, northwest of Corfu, with ELPE as its partner. Also, ELPE holds two offshore licenses in the west, Block 10 and Ionio.

These six licenses could generate total turnover of 250 billion euros by 2030, assuming a 20 percent success rate during exploration, according to a conservative forecast made by EDEY.

Drilling for natural gas to begin with licenses in country’s west

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Exploratory drilling for natural gas deposits at a total of six licenses in Greece will begin in the country’s west with two Greek companies, Hellenic Petroleum (ELPE) and Energean, leading the way, according to the outcome of talks yesterday at the headquarters of EDEY, Greek Hydrocarbon Management Company, which were headed by Prime Minister Kyriakos Mitsotakis.

Drilling is expected to begin in mid-2023 at Energean’s onshore Ioannina block; followed, a year later, by drilling at Block 2, an offshore license northwest of Corfu that is held by Energean (75%) and ELPE (25%), following Total’s withdrawal; as well as Block 10 and Ionio, two offshore licenses held by ELPE.

Two further licenses, west and southwest of Crete, both held by a consortium that has brought together TotalEnergies (40%), ExxonMobil (40%) and ELPE (20%), are regarded as the most promising of all six licenses but, at the same time, are the least developed in terms or preliminary exploratory work. The consortium aims to conduct, next winter, seismic surveys covering 6,500 square kilometers.

Energean has already conducted a seismic survey at its Ioannina block, the most developed of all six licenses in Greece, and has set a drilling target.

ELPE to seek Ionian Sea partner, Crete delayed by case

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Hellenic Petroleum ELPE has successfully completed seismic surveys at offshore blocks in the Ionian Sea and the Gulf of Kyparissia, west of the Peloponnese, for which the company holds 100 percent exploration and exploitation rights, and once results have emerged, will seek to establish partnerships for these ventures, CEO Andreas Siamisiis noted yesterday.

The chief executive, who was speaking at ELPE’s official launch for a solar energy farm in Kozani, northern Greece, one of Europe’s biggest, informed that the group’s hydrocarbon exploration activities for potential natural gas deposits, part of the group portfolio, will focus on offshore areas and be accelerated.

The results of data collected through seismic surveys at the Ionian Sea and Gulf of Kyparissia blocks will now be studied, while 3D seismic data will also be collected, a procedure to require a further 12 months.

As for ELPE’s interests at Cretan offshore blocks, for which the company has formed a consortium with France’s Total and America’s ExxonMobil, surveys conducted have shown similarities with areas in the eastern Mediterranean, where major hydrocarbon discoveries have been made.

ELPE’s chief executive attributed delays affecting exploration work at the Cretan blocks to a legal case filed with the Council of State, Greece’s Supreme Administrative Court, targeting the venture’s environmental impact study. No serious company would continue exploring with such a legal case pending, Siamisiis noted.

 

 

Government now fully encouraging upstream activity

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The Greek government is now fully encouraging foreign and domestic upstream companies to continue their hydrocarbon exploration activities at licenses held in the country for discovery and production of natural gas deposits.

In comments offered yesterday, Prime Minister Kyriakos Mitsotakis, while referring to the government’s latest energy-crisis support package for households and businesses, spoke of the country’s need to utilize its natural gas deposits as part of a national effort to achieve energy sufficiency.

Europe’s need to drastically reduce its reliance on Russian natural gas, as highlighted by the repercussions of Russia’s invasion of Ukraine, has prompted the Greek government to reassess its energy policy and, once again, turn to the country’s hydrocarbon potential.

The European Commission has prioritized swifter development of renewable energy sources in the EU, but cover will be needed from other energy sources during the transition, expected to last many years.

Brussels is now backing the further maintenance of European nuclear and coal-fired power stations, as well as extraction of oil and natural gas for a longer period.

Aris Stefatos, chief executive at EDEY, the Greek Hydrocarbon Management Company, has, on a number of occasions, estimated that Greece’s natural gas deposits could be worth 250 billion euros.

No need for lignite schedule revisions, officials determine

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The country’s decarbonization plan, not responsible for the sharp rise in electricity prices, does not require any revisions, lignite continuing to contribute to the energy mix in accordance with the grid’s needs, government officials have determined following a weekend meeting during which the country’s energy mix was examined.

Lignite has played a bigger role in the country’s energy mix over the past few days, covering more than 20 percent of electricity generation needs, up from 10.5 percent in January.

According to data provided by power grid operator IPTO, six of power utility PPC’s lignite-fired power stations will operate today. Agios Dimitrios I, II, IV and V, Megalopoli IV and Meliti will all contribute to the grid, according to IPTO.

Officials participating at the weekend meeting also examined the progress of the country’s hydrocarbons sectors. EU member states are looking for ways to reduce their dependence on Russian gas.

Hellenic Petroleum (ELPE) recently conducted seismic surveys at its ‘Ionio’ license, an Ionian Sea block southwest of Corfu. EDEY, the Greek Hydrocarbon Management Company, is now awaiting the investor’s next steps.

Hydrocarbon prospects reassessed following invasion

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The prospects of Greece’s hydrocarbon sector, given the latest conditions shaped by Russia’s war on Ukraine, which has highlighted the need for natural gas source diversification, will be reassessed at a meeting scheduled to take place at the Prime Minister’s office tomorrow, with participation from the leadership of the energy ministry and EDEY, the Greek Hydrocarbon Management Company.

The meeting’s participants are expected to examine if and how the country’s hydrocarbon prospects and can be more effectively incorporated into Greece’s energy policies.

On a wider scale, Russia’s attack on Ukraine has prompted the EU to look for ways to revise its energy policy in order to reduce its reliance on Russian gas as soon as possible. A number of EU member states are now beginning to refocus on domestic hydrocarbon potential.

Renewable energy remains the top priority in Greece’s energy policy as the country aims to transition to a climate-neutral economy.

However, natural gas is planned to serve as a bridge to facilitate the transition towards greater RES market penetration.

ELPE (Hellenic Petroleum) conducted seismic surveys in January at the Gulf of Kyparissia, west of the Peloponnese, at its Block 10 license, commissioning Norwegian company Sharewater and survey vessel SW Cook.

The same vessel then conducted conduct surveys at ELPE’s ‘Ionio’ license, an Ionian Sea block measuring 6,671.13 square kilometers, southwest of Corfu, opposite the Paxi islands.

EDEY, in an announcement, noted that Greece’s potential gas deposits could generate turnover in excess of 250 billion euros, which would support the energy transition.