Chevron buys Noble Energy, US striving for regional control

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.

 

Oil majors set for Crete block offers, milder Ionian interest

With just days remaining before deadlines for tenders offering exploration and exploitation rights at a total of three offshore blocks off Crete and in the Ionian Sea, five petroleum firms, including three international oil majors, took part in an exploration security-related meeting held by EDEY (Greek Hydrocarbon Management Company) yesterday, which suggests they will be submitting offers.

Exxon Mobil, Total and ELPE (Hellenic Petroleum), whose interest in the Greek market prompted EDEY to offer two offshore blocks off Crete, Repsol, following developments for Ionian Sea investments, and Energean Oil & Gas, whose interest in the Ionian Sea area led to the other EDEY tender, all participated in the hydrocarbon company’s meeting, ahead of the deadines for the three tenders, expiring this coming Monday.

The interest expressed by investors for the two Cretan offshore blocks appears to be greater.

Noble Energy and Israel’s Delek, which have visited a related virtual room set up for the tenders by EDEY for information, were not represented by any officials at yesterday’s meeting. It remains to be seen whether these absences mean that the two firms will not submit offers on Monday.

At this stage it appears that a three-member consortium made up of Exxon Mobil, Total and ELPE, as well as Italy’s Eni, already active in Cyrpus, will submit offers for the Cretan blocks. A third offer from Noble and Delek would come as a surprise.

Eni recently had to deal with Turkish intervention in Cypriot waters, which has delayed the firm’s drilling plans for that area.

As for the one Ionian Sea block being offered, Spain’s Repsol has displayed a consistent interest, despite negative reactions by local authorities and citizens against nearby exploration work, with Energean, in the Ioannina area, northwestern Greece.

In an Oil & Gas Journal article published last month, two EDEY officials informed that areas west and southwest of Crete have shown serious signs of deposits.

The northwest part of the Ionian Sea, the location of the third block being offered, has also shown hydrocarbon potential as it shares similar geological characteristics with the southeast Adriatic Sea, already producing.

 

 

 

 

DEPA’s East Med pipeline plan receiving Israeli, US support

The development prospects of the East Med underwater natural gas pipeline being promoted by DEPA, the Public Gas Corporation, as a plan to trasnsmit gas from the east Mediterranean to European market, are being propelled by Israeli and US support.

Commenting about a forthnight ago, Israel’s national infrastructure, energy and water resources minister Yuval Steinitz noted the project could serve as a main natural gas supply channel if the current signs of substantial deposits in areas controlled by Egypt, Cyprus and Israel are proven.

The recent establishment of talks between DEPA and US oil company Noble Energy, which led to the signing of a memorandum of cooperation in June, reflects the US interest in the development of the underwater project, a key part of energy relations linking Greece, Cyprus and Israel.

Noble Energy is the biggest company active in the development and exploitation of deposits in the east Mediterranean. The US energy company holds stakes in an offshore block within Cyprus’s Exclusive Economic Zone (EEZ) as well as a major Israeli-conttrolled block, Leviathan.

The developing ties between DEPA and Noble Energy have been propelled by encouraging results produced by two different studies conducted on the pipeline’s technical and financial sustainability.

Until recently, Noble Energy had maintained a reserved stance on the plan to construct an underwater gas pipeline, preferring LNG solutions instead for the export of gas from the Cypriot and Israeli deposits. The US company now appears more open to alternatives.

Greek, Cypriot and Israeli officials are scheduled to meet during the current month in Athens, at the European Commission’s local headquarters, to examine the results of preliminary technical and economic studies conducted on the East Med pipeline. Participants will seek to pave the way for more advanced talks at a summit meeting in Israel this December to involve the energy ministers of Greece, Cyprus and Israel, as well as the European Commissioner for Climate Action and Energy Miguel, Arias Canete.

 

 

Poseidon reaches agreement with Noble for East Med preliminary work

Athens-based Poseidon SA, a 50-50 joint venture involving DEPA, the Public Gas Corporation, and Edison, has signed an agreement with Noble Energy International Ltd to finalize preliminary procedures for the East Med pipeline ahead of the project’s Front End Engineering Design (FEED) stage. As part of the agreement, Noble will also conduct a sustainability study for the prospective pipleline, to carry natural gas exports from major deposits discovered in the East Mediterranean region.

The East Med pipeline has been designated as a Project of Common Interest (PCI) and is supported by the EU through the Connecting Europe Facility (CEF), a co-funding program.

The East Med project received two million euros in 2015 through the CEF program to fund activies preceding the FEED stage.

Poseidon is involved in the development of three major natural gas pipeline projects, the Poseidon pipeline, a submarine passage linking northwestern Greece with Italy’s south, the IGB, to interconnect northeastern Greece with southern Bulgaria, and the East Med, planned to run from Cyprus to Greece’s northwest via Crete.

The East Med project, including submarine and overland segments, will cover a distance of roughly 1,900 kilometers. It is being planned to carry as many as 16 billion cubic meters of natural gas per yer (bcm/y) from major Levantine Sea deposits located in Cypriot and Israeli territorial waters. The East Med pipeline may also carry possible natural gas deposits in Greek territory.

East Med, combined with the Poseidon and IGB projects, will be able to supply natural gas to Italy and other countries in Europe’s southeast.