oil

Energean commences its drilling campaign in Israel

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Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has commenced its 2019 drilling program in Israel, consisting of three development wells and Karish North, the company has announced.

As a result of this four-well campaign, Energean has a further six drilling options available in its contract with Stena Drilling Ltd.

Energean plans to batch drill the top-hole sections of the wells, which will allow significant operational efficiencies and cost savings, the company noted.

The drilling campaign is being undertaken using the Stena DrillMAX drillship, a sixth-generation drillship capable of drilling in water depths of up to 10,000 feet.

Energean is a London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic.

Energean has 349 mmboe of 2P reserves and 48 mmboe of 2C resources across its portfolio.

In August, 2017, the company received Israeli Governmental approval for the FDP for its Karish Tanin gas development project, where it intends to use an FPSO and produce first gas in 2021.

Energean has already signed contracts for 4.6 bcma of gas sales into the Israeli domestic market.

Future gas sales agreements will focus on both the growing Israeli domestic market and key export markets in the region, the company noted.

In Greece, Energean is pursuing an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field in the Gulf of Kavala, northern Greece.

Energean possesses five exploration licences offshore Israel, a 25-year exploitation licence for the Katakolo offshore block in western Greece, as well as additional exploration potential in its other licences in western Greece and Montenegro.

 

 

 

Crete exploration license by May, minister assures ExxonMobil deputy

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Exploration and production agreements for two offshore blocks west and southwest of Crete awarded a year-and-a-half ago to a consortium comprising ExxonMobil, Total and ELPE (Hellenic Petroleum)  will be ratified in Greek parliament by May, the latest, energy minister Giorgos Stathakis has assured a leading ExxonMobil official.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, has apparently accepted the minister’s commitment with satisfaction, but this remains unconfirmed.

The two officials met on the sidelines of the Delphi Economic Forum, a high-profile four-day event that ended yesterday.

Consortium officials have begun showing signs of frustration over the slow-moving licensing procedure for the two offshore Crete blocks.

In a carefully worded statement, the US Ambassador to Greece, Geoffrey R. Pyatt, who also attended the forum, noted he was eager to see the bureaucratic delays come to an end so that exploration work off Crete could commence.

The tender for the two offshore Crete blocks was launched in December, 2017. The ExxonMobil-Total-ELPE consortium submitted its bid in March, 2018 before it was endorsed four months later. If parliament ratifies the related licenses in May, the entire procedure will have taken 18 months to complete.

Investors frustrated by license delays for Crete exploration

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Contrary to Cyprus, providing oil majors investor-friendly conditions for their hydrocarbon exploration activities, ExxonMobil’s recent Glaucus-1 gas discovery emerging as a shining example, conditions in Greece are undermining the efforts of investors.

A consortium comprising Total, Exxon Mobil and ELPE (Hellenic Petroleum), established for hydrocarbon exploration work off Crete, has been held back by Greek government delays over the past few months.

Though most of the preliminary work has been completed, the trio of investors is still waiting for the Greek government to issue an exploration license, which would enable it to commence work at blocks off Crete.

An environmental impact study provided by the consortium for blocks west and southwest of Crete is said to have inexplicably fallen into stagnancy at one of the offices of the energy ministry’s environmental division over the past couple of months. It needs to be approved as part of the license issuing procedure.

Not surprisingly, investors are apparently making comparisons between sector operating conditions in Greece and Cyprus.

Exxon Mobil, Total and ELPE officials have all forwarded questions to energy minister Giorgos Stathakis’ office over the delay and been told not to worry.

“We’re excited but still waiting for the Greek government’s final approvals,” Tristan Aspray, Vice President of Exploration for Europe, Russia, and the Caspian, somewhat frustrated, recently remarked.

 

ELPE plans green investments worth €250m over next 5 years

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Hellenic Petroleum (ELPE) plans to make investments worth between 200 and 250 million euros in the renewable energy sector over the next five years for an increase of its installed RES projects portfolio to 300 MW, George Alexopoulos, ELPE’s general manager for strategic planning, has told analysts during a presentation of the company’s results in 2018.

At present, ELPE’s installed RES capacity totals 26 MW amid a 400-MW green portfolio of unfinished projects at various stages of development.

Besides developing unfinished projects, ELPE’s investment strategy also entails project takeovers, chiefly in the wind energy sub-sector, the official noted.

As for new projects, the corporate group aims to focus on the development of solar energy facilities and biomass projects.

ELPE will strive to increase its operating profit from 700 million euros at present to one billion euros by 2020, the ELPE official informed.

Besides boosting investments in the RES sector, ELPE’s strategic plan will also include a reappraisal that is expected to lead to changes in the company’s natural gas and refining interests, the official noted.

Midstream Oil and Gas Congress draws majors to Greece

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Dozens of major oil and gas companies gathered to network, listen to successful cases and enjoy Greek hospitality at the Midstream Oil and Gas Congress (MOGC) in Thessaloniki on February 18 and 19.

Participants included the National Technical University of Athens, the Regulatory Authority for Energy (RAE), Cyprus’ Energy Regulatory Authority (CERA), Port Authority of Alexandroupolis, Reganosa, Cepsa Gas Comercializadora and the Abu Dhabi National Oil Company (ADNOC).

The congress was opened with a speech from the Project Director, Natalya Kuznetsova, and continued with sessions dedicated to all key aspects of pipeline transportation, oil and gas trading and supply, as well as to oil and gas storage.

Plenary sessions featuring discussions on Innovations in Construction – Case Studies, presented by the Consolidated Contractors Company (CCC); energy transition and implications for the oil and gas industry, presented by DNV GL; as well as gas infrastructure development in the Baltic and CEE region – North-South Corridor, presented by Gaz-System SA, offered particular interest.

Delegates said that they attended mostly for new business leads while the second most common reason cited was brand promotion and visibility, mostly through sponsorship opportunities.

The MOGC Congress was organized by the BGS Group, renowned for its organization of closed-door congresses in Europe, including AUTOMA Congress, PRC Europe, and the Exploration and Production Offshore Congress Hub.

 

Joint operation agreements for continued ELPE license efforts

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All texts concerning the change of shareholder status at ELPE Upstream, a new ELPE (Hellenic Petroleum) subsidiary that has taken on all of the parent company’s hydrocarbon exploration and production rights ahead of the group’s nearing privatization, have been completed, according to the TAIPED privatization fund’s annual development plan.

ELPE will proceed with a capital increase to facilitate the transfer of a 50.1 percent stake of ELPE Upstream to the Greek State, leaving a 49.9 percent stake of the subsidiary for the corporate group.

Potential buyers are preparing to submit binding bids to a sale offering 50.1 percent of the ELPE group. A deadline has yet to be set but a date within the first ten days of March is possible.

Joint Operation Agreements have been prepared to ensure the continuation of activities at ELPE’s various licenses even if the prospective ELPE majority shareholder decides to pursue a different exploration and production strategy.

The Joint Operation Agreements will enable existing shareholders of ELPE’s SPVs to increase or decrease stakes. ELPE has established various SPVs with partners for licenses at the Gulf of Patras, the Ionian Sea, western Greece and Crete.

ELPE bidders given exemption right for ELPE Upstream costs

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Potential buyers participating in a sale offering a controlling 50.1 percent stake in ELPE (Hellenic Petroleum) will be given the option of being exempted from hydrocarbon exploration-related expenses concerning ELPE Upstream, a separate division holding ELPE’s hydrocarbon exploration and concession rights.

A 51 percent stake of ELPE Upstream will remain under the control of the state. Potential buyers will have the right to refuse to partake in ELPE Upstream’s investment activities, given the minority stake they will hold in this venture.

This cost exemption option appears to have satisfied potential buyers of ELPE’s 50.1 percent, preparing to submit binding bids, possibly within the first ten days of March. A deadline has yet to be set.

Head representatives, including Sonatrach boss Abdelmoumene Ould Kaddou, have spent time in Athens over the past couple of weeks for meetings with Greek state privatization fund TAIPED officials. No objections appear to have been raised.

Sonatrach recently entered the ELPE sale, joining Vitol as a partner. American firm Carlyle, the other new entry, has joined forces with Glencore for this sale.

All of ELPE’s current exploration and production licenses have been transferred to ELPE Upstream.

Energean begins 3D seismic survey work at Montenegro licenses

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Energean Oil & Gas, Greece’s sole oil producer, has begun 3D seismic survey work at its offshore exploration and production licenses in Montenegro in search of additional hydrocarbon deposits.

Norway’s PGS has been commissioned for the task, whose results are expected in the third quarter of this year. The PGS survey work on behalf of Energean Oil & Gas is expected to be completed within February.

A PGS seismic ship, Ramform Titan, entered Montenegro’s offshore area on Wednesday and anchored about one mile from the coast, near Bar, the country’s main sea port. Its 3D seismic survey work plans to scan offshore areas between Bar and the Montenegrin town Budva.

Energean Oil & Gas took part in a tender in 2014 and acquired licenses measuring a total of 338 square kilometers in two Montenegro offshore areas. The company went on to sign exploration and production licenses for these plots in March, 2017.

Both areas are believed to be promising. An independent industry firm believes they could contain 1.8 trillion cubic feet of natural gas and 144 million barrels of oil.

Montenegro’s plots have drawn major international players. A consortium made up of ENI and Novatek recently completed seismic surveys at four offshore blocks adjacent to those held by Energean Oil & Gas.

Name agreement developing Fyrom into ELPE oil hub

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A bilateral agreement between Greece and Fyrom (Former Yugoslav Republic of Macedonia) for a change of name by the latter to the Republic of North Macedonia is providing further momentum to talks between ELPE (Hellenic Petroleum) and the neighboring country’s government for the reopening of an oil pipeline stretching 213 kilometers from the Greek petroleum group’s Thessaloniki facilities to its Okta company refinery across the northern border.

The two sides are close to finalizing an agreement for the pipeline’s relaunch, sources informed. The facility was shut down in 2013 when ELPE decided it was no longer feasible to keep it running.

The Greek company used the pipeline as a channel of transportation for crude from its Thessaloniki plant to the Okta unit in Fyrom.

Road networks have been used to supply fuels to Fyrom since 2013 but transportation costs and smuggling activity have risen sharply at the expense of both Fyrom and ELPE, the neighboring market’s main supplier.

Besides supplying the Fyrom market, ELPE’s Okta refinery also promises to serve as a hub for the wider region. Wider growth in Balkan countries over recent years was a catalyst in the ELPE board’s decision to reopen the pipeline to its Okta plant.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating more than 200 petrol stations in total. The pipeline’s reopening is expected to facilitate ELPE’s entry into new markets.

 

Ministry committee receives Crete hydrocarbons impact study

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An environmental impact study concerning offshore hydrocarbon exploration activity planned for south and southwest of Crete has been forwarded to a special energy ministry committee by EDEY, the Greek Hydrocarbon Management Company, following a related public consultation procedure.

This special committee is now in the process of assessing the study before delivering its findings to energy minister Giorgos Stathakis for authorization. Once signed by the minister, the environmental study, along with licensing agreements drafted for offshore plots in the aforementioned regions, will be sent to a supervisory committee for a final legality check before heading to parliament as a draft bill for ratification.

Speaking at the Athens Energy Forum yesterday, Stathakis, the energy minister, estimated that licenses offered for Crete, as well as the Ionian Sea, would be submitted to parliament in approximately two months.

A consortium comprising Total, ExxonMobil and ELPE (Hellenic Petroleum) has been awarded licenses around Crete, while Repsol and ELPE have secured a license for an Ionian Sea block.

Both investment teams are hoping for a swift completion of bureaucratic procedures to commence their exploratory work as soon as possible.

ELPE sale deadline headed for early-March extension

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The state privatization fund TAIPED appears likely to reset the binding bids deadline of a sale offering a 50.1 percent stake in ELPE (Hellenic Petroleum) for a date within the first week of March, more than one month beyond the current January 31 date, reliable sources have informed.

The need for additional time is being attributed to the recent entry into the sale of two new candidates, American firm Carlyle and Algeria’s Sonatrach. They have established respective partnerships with the procedure’s two existing candidates, Glencore and Vitol, and will need time to appraise ELPE before shaping bids with their partners.

TAIPED has yet to officially endorse the new bidding pairs but is expected to offer its approval very soon, possibly within the current week.

The ELPE sale procedure has needed to overcome various obstacles along the way. Late last year, Greece’s Capital Market Commission ruled that the preferred investor to emerge from the sale will not need to make a public offering to other company shareholders, ending an ambiguity that caused delays.

EPC contractors to meet at EPOCH 2019 event in Thessaloniki

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EPOCH 2019, the Exploration and Production Offshore Congress Hub, an annual upstream event attracting oil companies, EPC and drilling contractors, as well as governmental bodies, is scheduled to take place September 16 and 17 in Thessaloniki.

Participants will have the opportunity to meet with key industry figures such as Eng. Francesco Cammarata, Vice President Business Development North Africa and East Mediterranean, TechnipFMC; Dr. Subrata Bhowmik, Senior Riser Analyst, McDermott; and Julien Ginestet, Lead Flowlines Engineer, Saipem.

These guests will deliver cases during the event’s business program.

Topics to be discussed include the new balance in MENA (Middle East and North Africa) to monetize gas resources; Life Extension of Offshore Structure integrating Big Data, IOT and Machine Learning; Exploration and Production Perspectives in Greece; Digitization – Software Solutions for Deepwater Production; and Drilling Expansion plans in the emerging markets.

For one-to-one consultation regarding participation terms, fill in the form:  https://bit.ly/2QTpvSd

The congress organizer, BGS Group, organizes closed-door congresses in Europe, including AUTOMA Congress, Midstream Oil and Gas Congress and PRC Europe.

Additional information is available at the website:  https://bit.ly/2sxVlKl

 

 

 

2nd Morocco Oil & Gas Summit scheduled for February 6-7

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The Moroccan National Office of Hydrocarbons and Mines (ONHYM) is meeting with potential and existing investors, including SDX Energy, Chariot Oil & Gas, Geoex, Enagas and ENI at the 2nd Morocco Oil & Gas Summit on February 6-7, organizers have announced.

ONHYM plans to announce future plans regarding exploration and production following the recent hydrocarbon discoveries, and form new partnerships for midstream projects.

For the first time, companies will discuss Morocco’s Atlantic offshore geology and the results of recent exploration activities, onshore exploration and unconventional hydrocarbons opportunities. All exploration challenges and opportunities in Morocco, including how E&P companies and contractors can make the most out of the current experienced low-cost service environment in Morocco, will be covered.

Opportunities for independent oil companies will be shared, including the great investment potential of shallow offshore fields for smaller exploration companies.

SDX Energy will discuss its recent discoveries, including important discoveries in the LNB-1 and the ONZ-7 wells, which tapped Morocco’s significant reserves.

With more exploration and production projects on the way, the need for new partners is higher than ever, the event’s organizers have stressed.

The 2nd Morocco Oil & Gas Summit speakers include: H.E Amina Benkhadra, General Director, ONHYM; Wafae Benhammou, Director for Partnerships & Promotion, ONHYM; Paul Welch, President and CEO, SDX Energy; Larry Bottomley, CEO, Chariot Oil & Gas; and Peter Abrahamson, Chief Scientific Officer, Geoex.

The upcoming event presents an ideal opportunity for oil and gas companies (exploration and production), consultants, seismic, drilling and other service companies to have in-depth discussions and one-to-one private meetings with ONHYM and National Hydrocarbon Agencies from West African countries, organizers noted. The focus will be on current exploration opportunities, geology, legislation, midstream and licensing updates in West Africa.

For registrations and further information visit:

https://www.morocco-summit.com/

Or contact:

felix@in-vr.co

Greece moving closer to sales of ELPE and DEPA, minister asserts

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Greece has crossed a key hurdle to the sale of a controlling stake in ELPE (Hellenic Petroleum) as it rushes to meet its privatization pledge after emerging from its third and final bailout.

In a Bloomberg interview, energy minister Giorgos Stathakis said Greece has reached an accord with potential buyers of the ELPE stake – valued at the current market price of 1.16 billion euros and seen as a flagship privatization – over the control of its wholly owned unit, ELPE Upstream. Under the accord, the state will own 50.1 percent of ELPE Upstream, which holds Hellenic Petroleum’s hydrocarbon exploration and concession rights.

“Talks with the potential buyers of the 50.1 percent stake in Hellenic Petroleum over Elpe Upstream have finished and all issues have been resolved,” Stathakis said in the interview in Athens.

The push to see the sale through comes after Greece, in August, ended its final international bailout following its decade-long financial crisis. Privatizations, a cornerstone of the bailout program’s rebound plan, haven’t been popular with the leftist government of Prime Minister Alexis Tsipras. Once famous for dragging its feet, the government is now interested in “stepping up the privatization drive,” Grigoris Stergioulis, chairman of Enterprise Greece, the nation’s trade and investment promotion agency, said in August.

Assets in addition to Hellenic Petroleum being prepared for sale include parts of DEPA, Greece’s natural gas supplier, and plants owned by PPC, the country’s state-controlled and largest electricity provider.

Binding offers

Greece’s state-asset sale fund qualified in July two investors for the controlling stake in Hellenic Petroleum – Glencore Energy UK Ltd and Vitol Holding BV – allowing them to continue with the process. The stake is being sold by Paneuropean Oil & Industrial Holdings SA and the Hellenic Republic Asset Development Fund, the refiner’s first and second-largest shareholders.

“While some details remain for the shareholders’ agreement, we expect binding offers on Jan. 28,” Stathakis said. The two companies have concluded their separate ventures for making bids, he said.

On DEPA, Greece is preparing a draft law to split the natural gas supplier into two parts to pave the way for the sale of the company, Stathakis said. The law to create DEPA Infrastructure and DEPA Commercial will be presented to parliament by the end of January, he said.

US foray

Greece will sell the majority of DEPA Commercial, retaining a 15 percent stake. DEPA Infrastructure will comprise the country’s gas network and international projects, including major investments in pipelines, and this part will remain under state control. Greece will invite investors to show interest in the sale during the first half. The state currently controls a 65 percent stake in DEPA while Hellenic Petroleum owns the remaining 35 percent.

DEPA’s purchase in December of the first cargo from Cheniere Energy Inc.’s Corpus Christi liquefied natural gas export terminal, the newest such outlet in the US, opens the way for the regular supply of US LNG to Greece, the minister said.

“Discussions have begun concerning amounts and price and the outcome is a matter of months,” Stathakis said.

Meanwhile, PPC has approved an agreement for investors to buy its lignite coal-fired plants in Meliti and Megalopoli, Stathakis said. The sale is part of an effort to meet the demands of Greece’s creditors for the company to reduce its dominance in the country’s electricity market. Binding offers are due shortly, Stathakis said. (Bloomberg)

Energean set for 20-year output high of 1.5m barrels in 2018, new drilling

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Officials at Energean Oil & Gas, nowadays a publically traded company following last March’s listing on the London Stock Exchange’s main market, avoided disclosing too much information at a company presentation yesterday but confirmed the achievement of a 20-year production high of 1.5 million barrels for 2018, at a production rate of nearly 4,100 bpd.

Half this amount – 2,000 bpd – was provided by the company’s Prinos North oil field, which began producing last February following horizontal drilling.

Company officials also noted a new drilling effort will be staged at the Epsilon oil field, located in the Gulf of Kavala, northern Greece. Output here will signal Greece’s first point of utilization and oil production since the Prinos and Prinos North fields.

Energean’s detailed new production guidelines are expected to be announced by the board in January.

Beyond Greece, Energean, a leading independent E&P company focused on the Eastern Mediterranean region, plans to commence 3D seismic surveys at a section of offshore licenses held in Israel as well as at two offshore licenses in Montenegro.

In March, Energean plans to drill at its Karish North license in Israel, aiming to discover 34 billion cubic meters of natural gas. This drill has been given an almost 70 percent chance of succeeding.

Last November, Energean began constructing a Floating Production, Storage and Offloading (FPSO) unit to be installed in the east Mediterranean region. It will offer an annual production capacity of 8 billion cubic meters.

Energean’s listing on the London Stock Exchange was the biggest IPO by a petroleum firm in the past four years and the sole entry in 2018. Energean’s share has since been one of the best FTSE 250 performers, rising 35 percent.

Just under two months ago, Energean was also listed on the Tel Aviv Stock Exchange (TASE) secondary list.

 

 

ELPE oil pipeline from Thessaloniki to Fyrom seen reopening March

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An oil pipeline stretching 213 kilometers from Greek petroleum group  ELPE’s Thessaloniki facilities in the country’s north to its Okta company refinery across the northern border in Fyrom (Former Yugoslav Republic of Macedonia) is expected to reopen around March after the firm ceased using this channel in 2013, ruling it, at the time, as inefficient and unprofitable.

The ensuing road transportation of fuels has sharply increased costs and smuggling activity.

ELPE and Fyrom’s administration are ready for the oil pipeline’s reopening, sources have informed. However, constitutional changes concerning a bilateral agreement for Fyrom’s name change to the Republic of North Macedonia, requiring several rounds of voting in parliament, still need to be completed before oil quantities can be transported through this pipeline.

The ELPE group is currently using its Okta company refinery as a storage facility. Balkan regional growth experienced in recent years has rekindled the Greek petroleum firm’s interest in the Okta unit as a transit center for distribution of petroleum products in Fyrom and other countries in the region.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating over 200 petrol stations.

The Thessaloniki-Fyrom oil pipeline’s reopening is expected to significantly reduce fuel transportation costs to these markets.

 

Early elections not a threat for ELPE sale, officials assure

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Greek privatization procedures already at a mature stage and not requiring any legislative revisions or presidential decrees, such as the ongoing ELPE (Hellenic Petroleum) sale, would not be affected by early elections ahead of the completion of the government’s four-year mandate in October 2019, even if these were to be held as early as March, prospective buyers in the ELPE sale, offering a 50.1 percent stake, have been assured by the privatization fund TAIPED in response to questions on the matter.

Two new participants, US firm Carlyle and Algeria’s Sonatrach, are believed to have established respective partnerships with the privatization’s list of two existing candidates, Switzerland’s Glencore and Dutch company Vitol. However, to date, no official announcements have been made on the Glencore-Carlyle and Vitol-Sonatrach pairings.

If verified, the ELPE sale’s new entries can be expected to raise hopes for higher offers when binding bids are submitted at a still-unspecified date within January.

Households, businesses, inflation impacted by OPEC-sparked fuel hikes

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Sharp price increases of auto and heating fuel, as well as natural gas, are impacting household and business costs as well as the inflation rate, data released by ELSTAT, the Greek statistical authority, has shown.

The price of natural gas registered a 13.1 percent price increase compared to November last year, diesel was up 11.3 percent, and heating fuel rose 14.7 percent, the ELSTAT data showed. On the contrary, the price of gasoline fell by 3.8 percent compared to the equivalent month a year earlier.

The price shifts have been attributed to international crude and petroleum product prices, shaping prices set by refineries and traders.

Subsequently, transportation and operating costs for businesses, determined, to a large extent, by fuel price levels, have risen considerably.

Further fuel price rises are expected as a result of a decision by OPEC members and other oil-producing countries to reduce output by 1.2 million barrels per day.

The price of Brent Crude Oil rose to more than 63 dollars per barrel following the announcement of the cutback by oil producers last Friday before correcting to less than 60 dollars in the days that followed.

 

Major China petrochemicals event in March, registration starts

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Visitor online registrations have commenced for the 19th China International Petroleum & Petrochemical Technology and Equipment Exhibition, a world-leading trade fair for petroleum and petrochemical, scheduled to take place March 27-29, 2019 at the New China International Exhibition Center in Beijing.

To feature 1,800 exhibitors, including 46 enterprises from the Fortune Global 500, the event promises insight on subjects such as oil, gas, pipeline, petrochemical, shale gas, offshore engineering technology as well as explosion-proof systems.

Participants will also have the opportunity to network with 117,000 professional visitors from over 65 countries and regions, communicate with 18 international pavilions, and hear from industry experts at the summit and forum program.

For more information, visit the event’s official website http://en.cippe.com.cn/, http://www.chinamaritime.com.cn/en/ or email yolanda@zhenweiexpo.com.

Repsol, ELPE nearing finalized deal for new Ionian Sea block

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EDEY, the Greek Hydrocarbon Management Company, and a consortium comprising Spain’s Repsol and ELPE (Hellenic Petroleum) have completed negotiations for exploration and production rights at a new Ionian Sea block on offer.

The two sides have delivered a draft agreement to the energy ministry. It will also be forwarded to a supervisory committee within the next few days for approval before being signed by all sides involved and submitted to parliament for ratification. The agreement could be finalized by the end of the month, sources informed.

The new Ionian Sea block, measuring 6,612 square kilometers, is the latest block to be offered to investors by EDEY following blocks southwest and west of Crete that were made available in the summer of 2017 through international tenders.

As has been previously reported, Energean Oil & Gas’s early interest in this new Ionian Sea block prompted the latest procedure. Energean, operating Prinos oil fields in Greece’s north as well as Israel’s Karish and Tanin gas fields, ended up not submitting an offer for this Ionian Sea block. Instead, Repsol and ELPE emerged with a joint bid.

Repsol, which has developed into an exploratory force in western Greece and the Ionian Sea, is pressuring for a swift bureaucratic procedure in order to commence seismic survey work at the new block.

Repsol also jointly holds onshore licenses, with Energean as its partner, in northwestern Greece’s Ioannina and Etoloakarnania regions.

State control planned for ELPE hydrocarbon holding company

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The Greek State will hold a majority 51 percent stake and ELPE (Hellenic Petroleum) 49 percent in a new hydrocarbon holding company to serve as an umbrella corporation for various firms, existing and future, with ELPE exploration and production rights in various areas, according to a government plan incorporated into ELPE’s ongoing privatization effort offering investors 50.1 percent of the petroleum firm.

The holding company is intended to hold minority interests in most of these firms, and majority stakes in ventures where, until now, ELPE has operated without partners, such as an Arta-Preveza onshore block and a Gulf of Kyparissia license.

The holding company plan currently includes five subsidiaries: ELPE Arta-Preveza (ELPE 100%); ELPE Kyparissia Gulf (ELPE 100%); Gulf of Patras (ELPE 50%, as the operator, and Edison 50%); Ionian Sea Block 2 (Total 50%, as the operator, ELPE 25% and Edison 25%); Crete (Total 40%, as the operator, ExxonMobil 40% and ELPE 20%).

Work on the prospective holding firm’s statute is nearing completion, according to energypress sources. However, an energy ministry draft bill to establish the Greek State as the majority stakeholder of the new holding company and carve out a 49 percent share for ELPE’s prospective buyer remains pending.

Binding offers for the ELPE sale are now expected to be deferred until January.

Over the past few weeks, the energy ministry has been holding talks with Paneuropean, offering 30.47 percent of 45.47 percent held in ELPE, as well as ELPE’s two contenders, Glencore and Vitol, in search for a new arrangement that would increase the Greek State’s control of the new holding company from 25 percent to no less than a 51 percent majority. The Greek State is offering 20.5 of its 35.5 percent stake in ELPE.

 

Energean’s 2019 Israel drilling to target 2.3 Tcf in resources

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Energean Oil and Gas, the London Premium Listed FTSE 250 and Tel Aviv Listed E&P company with operations offshore Israel, Greece and the Adriatic, has issued a Trading Update for the period from July 1 to November 13, 2018. The Group will publish a Trading Statement and Operational Update on January 16, 2019, while full-year results for 2018 will be announced on March 21, 2019, it has announced.

Highlights

  • On track to deliver first gas from the 2.4 Tcf Karish – Tanin development in 1Q 2021.
  • Scheduled first steel cut on the Karish – Tanin FPSO for 26 November 2018.
  • Targeting 2.3 Tcf gas and 31 million barrels liquids gross prospective resources with a high probability of success through the 2019 Israeli drilling programme.
  • Aiming to fill the 3.8 BCM per annum (‘bcma’)[1] of FPSO spare capacity in the medium term. Identified strong incremental demand for gas with future sales contracts targeting growing domestic and regional export markets.
  • Expecting first oil from the Epsilon extended reach well in late 2018 and achieved first steel cut on the Epsilon jacket on 26 September.
  • Started trading on the Tel Aviv Stock Exchange (“TASE”) on 29 October and expecting to enter the TA-90, TA-125 and TA-Oil & Gas Indices.
  • Strengthened the senior management team with the appointment of Iman Hill as Chief Operating Officer.
  • Well-funded for all development projects. At 30 September 2018 the group had gross cash of $289 million (net cash $160 million), plus liquidity of $68 million under its RBL and $1,275 million under its project finance facility.

Mathios Rigas, CEO of Energean said:

“Our developments are on schedule and we have an active programme of drilling in both Israel and Greece in the months ahead, targeting significant increases in prospective resources and production.

We are seeing strong incremental demand for our gas and aim to prove up enough resources to fill the 3.8 bcma of spare capacity in our 8 bcma FPSO. Future gas sales agreements will focus on both further contributing to security and diversity of supply in the Israeli markets as well as targeting key regional export markets.”

Operational Update

Israel – Karish and Tanin Development

Energean’s Karish and Tanin development remains on track to deliver first gas into the Israeli domestic market in 1Q 2021. The next visible milestone will be first steel cut on the FPSO hull on 26 November 2018.

Karish development drilling will immediately follow the Karish North well. Three development wells will target Karish Main with completion expected by 2019 year end. These three wells will deliver 4.2 bcma (c. 406 mmcfd) of firm gas sales into the Israeli domestic market from 1Q 2021. Gross production capability of the three wells is expected to be far in excess of the 4.2 bcma requirement.

The subsea workstream, managed and executed by TechnipFMC under the $1.36 billion lump sum turnkey EPCIC contract signed earlier this year, is progressing in line with expectations.

Energean has recently awarded a second contract to Wood. The latest contract, effective immediately, is to provide operations and maintenance manpower and specialist engineering services over the next five years. This follows an earlier two-year contract, awarded in April 2018, which involves the preparation of systems and procedures to ensure safety and efficiency in all aspects of the pre-operation period.

Israel – Exploration

Energean sees strong incremental demand for its gas and future gas sales contracts will target both the growing domestic and key regional export markets. Over the medium term, Energean aims to prove up enough resource to fill the remaining 3.8 bcma of spare capacity[2] in its 8 bcma FPSO and fulfil this additional demand.

The Company’s 2019 drilling programme will target 2.3 Tcf of gross prospective gas resources and is well aligned with its exploration strategy to target resources that can be quickly, economically and safely monetised.

Planning for Karish North is currently being concluded. Spud is expected in March 2019 and drilling is forecast to take 45 days. Karish North will directly target 1.3 Tcf of gas and 16 million barrels of liquids (gross) with a volume weighted geological chance of success of 69%4.

Energean is of the view that success at Karish North could have a positive read-across to Karish East; technical analysis indicates that the fault between Karish North and Karish East does not form a barrier and, therefore, does not limit the extent or flow of any hydrocarbons. Karish East contains gross prospective resources of 0.5 Tcf of gas and 7.5 million barrels of liquids with a volume weighted geological probability of success of 70%. Karish North will also provide important read-across information for the Karish Main structure.

The exploration component of the Karish Main wells consists of drilling into the deeper D sand horizons, which have been proven in the Tamar field (upper D sands) and Aphrodite (lower D sands) discovery. Energean believes that Karish Main drilling offers additional upside beyond that reflected in NSAI independent estimates.

ELPE holding company state control thoughts new sale delay

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A local Capital Market Commission demand that would have required the eventual preferred investor in the ELPE (Hellenic Petroleum) to make a public offering to other company shareholders may have been dropped but a new stumbling block, possibly bigger, has surfaced in the ELPE sale offering investors 50.1 percent as the government is now pushing for a plan that would maintain the Greek State’s control of hydrocarbon exploration and production rights at all licenses already awarded to ELPE. These rights would be transferred to a state-controlled holding company.

The government appears to be pursuing a revised arrangement that would offer the Greek state control of ELPE’s existing exploration and production rights with a stake of at least 51 percent, even 100 percent.

Paneuropean, offering 30.47 percent of 45.47 percent held in ELPE to the sale, had reached an agreement last April with the government for the Greek State, offering 20.5 of its 35.5 percent stake, to hold a 25 percent stake, not 51 percent or 100 percent, in the new holding company, to be named Exploration Holding Company. This stake would eventually rise to 36.25 percent, directly and indirectly, for the Greek State.

However, the energy ministry now wants a reexamination of April’s agreement, energypress sources informed.

Over the past few weeks, the ministry has been holding talks with Paneuropean as well as ELPE’s two contenders, Glencore and Vitol, in search for a new arrangement that would increase the Greek State’s control of the new holding company from 25 percent to no less than a 51 percent majority, if not total control.

ELPE posts record high 9M net income, up 32%, and exports

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Hellenic Petroleum (ELPE) has just announced its 3Q and 9M financial results, posting a 3Q17 Reported EBITDA figure of€258 m (+12%), leading 9M to a record high of €731 m (+20%). IFRS Reported Net Income amounted to €135 m (+28%) in Q3 and €360 m (+32%) in 9M, the highest on record, with Earnings per Share (EPS) at 1.18.

Higher sales volumes and crude prices led 9M18 sales revenues at €7.3 bn (+ 25%).

Likewise, excluding the impact of increasing crude oil prices on inventory and one-off items, 3Q18 Adjusted EBITDA reached €237m, (+15%), while 9M18 came in at €574 m, with Adjusted Net Income at €111m (+25%) in 3Q18 and €239m in 9M18 (-23%).

The main driver for improved 3Q18 operating profitability was strong refining performance which, through increased mechanical availability, normalized operations and optimal crude selection, delivered the highest ever overperformance vs benchmark refining margins of $7.3/bbl. Equally, the significant increase in production vs 3Q17 (4m MT, +19%), led total sales higher by 8% and exports by 27%. Operating performance outweighed the significant decline in benchmark refining margins by 20%, as well as the cost of increased CO2 emissions rights provisions. Regarding feedstock supply, following the re-imposition of US sanctions, the Group substituted Iranian crude with alternative crude oil types, a switch that did not affect performance adversely.

As a result, 9M18 production rose to 11.7 m tons (+ 5%) and sales volumes to 12.4 m tons (+ 3%) with exports at 7.1 m tons, accounting for 57% of total sales.

The Group’s financial position strengthened further, with finance cost 13% lower in 9M18 and 11% in 3Q18, following the successful completion of the 2018 refinancing program.

3Q18 operating cashflow (Adj. EBITDA – Capex) amounted to €203 m, the highest since 1Q17, bringing Net Debt at €1.8bn, lower q-o-q and gearing at 40%, the lowest level in the last 2.5 years.

Based on 9M18 reported results, the Board of Directors approved the distribution of €0.25/share as interim dividend for 2018.

High and volatile crude oil prices, strong USD sustained

US sanctions on Iran, combined with increased production in North America, led 3Q18 crude oil prices averaging $76/bbl, flat vs 2Q18, but significantly higher compared to 3Q17 (+46%). Prices were volatile, recording their highest level since 2014, at the end of 3Q18.

Macro and political developments in the euro zone and the US resulted in a further strengthening of USD against the euro q-o-q, averaging $1.16, flat vs 3Q17 ($1.17).

Product cracks, excluding diesel, were weaker compared to 3Q17, leading the Med benchmark refining margins 20% lower, with FCC benchmark at $5.7/bbl vs $7.1/bbl last year, while decline was lower for Hydrocracking margins, which averaged $5.6/bbl (3Q 2017 $5.9/bbl).

Increased aviation fuels demand

Total domestic fuels demand was 1.6 m tones, – 1% vs 3Q17. The marine and aviation market recorded an increase of 3%, with a significant improvement in aviation fuels market (+ 10%), due to tourism.

Important developments

In E&P, the lease agreements for “Block 10 – Kyparissiakos Gulf” (ELPE 100%) and two offshore areas west and southwest of Crete, (ELPE 20%, Total 40% – operator, ExxonMobil 40%) were finalized, pending formal signing and customary approvals.

With regards to DESFA sale, the spin-off of DESFA from DEPA through an in kind share capital reduction of DEPA, in exchange for DESFA shares to owners TAIPED, the state privatizatiion fund, and ELPE is in process, while the certification of DESFA from energy regulatory authorities is pending. The transaction is expected to be completed in the next quarter. The proceeds of the sale, net of applicable taxes, will be applied mostly towards repaying existing debt, while an extraordinary dividend may also be considered.

In the context of DEPA Group’s reorganization of distribution and marketing activities, the acquisition of remaining 49% of EPA and EDA Attikis from Attiki Gas (subsidiary of Shell Gas BV) is expecting approvals from competition authorities.

Key highlights and contribution for each of the main business units in 3Q18 were:

REFINING, SUPPLY & TRADING

  • Refining, Supply & Trading 3Q18 Adjusted EBITDA at €173m (+25%), with 9M18 at €423 m (-17%).
  • The improved operation of the refineries in 3Q18 led to an increase in production and sales to 4 m tons (+19%) and 1 m tons (+8%) respectively.
  • ELPE 3Q18 realised margin amounted to $12.1/bbl, mainly on taking advantage of opportunities in crude pricing structure.
  • Crude slate differentiation had an impact on product yields as well, with middle distillates at 52%, while fuel oil was reduced at 10%.

PETROCHEMICALS

­       Higher sales volumes of polypropylene (+5%) and increased contribution of the Aspropyrgos refinery propylene unit led to increased profitability, with Adjusted EBITDA at €25 m (+5%).

MARKETING

  • 3Q18 Marketing Adjusted EBITDA at €42 m and 9M18 at €81 m.
  • Increased aviation fuels volumes maintained 3Q18 profitability at similar levels vs 3Q17, with Domestic Marketing Adjusted EBITDA at €26 m (-3%).
  • Weaker margins in most markets where the Group operates, had a negative impact on International Marketing profitability, with 3Q18 Adjusted EBITDA at €16 m (-14%).

ASSOCIATED COMPANIES

­       DEPA Group participation to consolidated Net Income came in at €7m.

­       Elpedison EBITDA amounted to €4 m (+82%), due to improved Retail contribution.

 

 

ELPE contenders to be given one final binding bids deadline extension

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Vitol and Glencore, the two contenders of an ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake, will be granted a final deadline extension for binding bids, which will shift the submission date to some time in December, possibly early January, the chief official of TAIPED, the state privatization fund, has told local radio.

Vitol, Glencore and the privatization fund have found themselves needing more time despite a decision reached yesterday by the local Capital Market Commission that resolves an ambiguity as to whether the preferred investor to emerge from the sale will need to make a public offering to other company shareholders. The commission decided such follow-up action by the winning bidder will not be necessary, sources informed.

The bidders need more time to prepare their respective offers, while TAIPED and its consulting team are still fine-tuning binding offer terms.

There has been some speculation that the privatization fund could set a December 15 deadline but TAIPED is more likely to set a January date.

EDEY presenting five new fields in search for more investors

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EDEY, the Greek Hydrocarbon Management Company, is seeking to draw an increased level of attention from petroleum firms for natural gas and oil exploration through five new offshore blocks, located in the Ionian Sea, off Crete and south of the Peloponnese.

The five blocks, ranging from 8,000 to 22,000 square kilometres in size, were presented yesterday by EDEY chairman Yiannis Basias at a workshop organized by IENE, the Institute of Energy for Southeast Europe.

EDEY has reprocessed related seismic survey data concerning these five blocks and plans to present findings at international conferences and meetings with the objective of generating the interest of oil majors.

The Greek hydrocarbon company’s latest initiative comes at a time of elevated activity among southeast Mediterranean, Black Sea and Adriatic countries, all staging tenders for blocks or conducting surveys and drills.

Global oil industry players have turned their attention to the wider region. Total, ExxonMobil, Repsol and Edison have already established a presence on Greek territory. EDEY is hoping to add to the list.

ELPE bids by end of November, public offering presumed

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TAIPED, the state privatization fund, appears headed towards setting a late-November date for binding bids by prospective buyers in the ELPE (Hellenic Petroleum) sale offering a 50.1 percent stake.

The privatization fund, keen to push ahead the ELPE sale process, which has lost some pace, is acting on the presumption that the winning bidder of PPC’s 50.1 percent will need to follow up with a public offering to the remainder of the company’s shareholders.

If so, either Glencore or Vitol – the sale’s two contenders – will need to buy, at the same price, shares offered by other company shareholders, meaning the buyer could end up with as much as a 70 percent stake of ELPE. Greek and foreign institutional investors, as well as small-scale shareholders, hold a 19 percent stake of ELPE.

The local Capital Market Commission has yet to deliver a decision on whether a public offering procedure will be needed.

Commenting yesterday on the need for swifter progress in the sale’s overall proceedings, energy minister Giorgos Stathakis stated the ELPE sale’s bidding procedure would be completed by the festive season.

At this stage, a proposal entailing a legislative revision by the finance ministry that would exempt ELPE from public offering procedures does not appear to have gained any ground.

At the current rate, given the Capital Market Commission’s delays, the sale is not expected to be completed before the summer or autumn of 2019.

Energean shares begin trading on Tel Aviv Stock Exchange

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The shares of independent oil and gas exploration and production company Energean Oil and Gas have begun trading on the Tel Aviv Stock Exchange (TASE) secondary list, the group has announced in a statement.

Energean is the first London-listed, international oil and gas operator to list shares on the Tel Aviv bourse, following the largest E&P IPO in London since 2014.

Delivery of Energean’s highly attractive, flagship Karish and Tanin gas development, offshore Israel, remains on track for first gas in 1Q 2021 providing energy security and supplying gas to the Israeli domestic market.

Energean is currently at the start of an active 18-month period including first steel cut for Energean’s FPSO, the only FPSO in the East Mediterranean, scheduled for 26 November 2018, and drilling of the high potential Karish North well to commence in March 2019, with the potential to de-risk up to 1.8 TCF of resources across Karish North and Karish East.

In addition, during this 18-month period, Energean will continue to de-risk its wider Israeli portfolio which has 7.5 Tcf of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) and pursue future gas sales contracts, to target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders. Energean is also focusing on an ongoing investment and development program to increase production from its Prinos and Prinos North oil fields and to develop the Epsilon oil field, located in the Gulf of Kavala, northern Greece.

Energean has also reported a significant further upside from its diverse eastern Mediterranean portfolio including exploration and appraisal opportunities in Israel, Greece and Montenegro.

Mathios Rigas, Chief Executive, Energean Oil & Gas commented:

“There is strong momentum at Energean as we prepare to begin our active Israeli work program to deliver our flagship Israel gas project which will not only deliver significant shareholder value but provide competition and energy security to the Israeli domestic market. Alongside this in Greece we continue to focus on growing our low cost production.

“As such, we are delighted to be the first UK listed international oil and gas operator to list its shares on the Tel Aviv Stock Exchange, fulfilling our commitment that we made to shareholders at the time of our IPO, improving the breadth and depth of the Company shareholder base.

“Israel is a core component of our portfolio and we are on track to start producing gas from the only FPSO in the Eastern Mediterranean in 1Q 2021 providing competition and energy security to the Israeli domestic market, so it is only natural that we expand the accessibility of our company to the Israeli market.”

Mr. Yuval Steinitz, Minister of National Infrastructure, Energy and Water Resources, who attended the opening ceremony, remarked:

“Having Energean in the Israeli Stock Exchange is an important development. It is a positive message to the stock market, but mostly a positive message to the developing energy market of the country, a message that shows that Israel is emerging as a player in the global energy market”.

On track for first gas in 1Q 2021

Energean’s secondary listing precedes an operationally active 2019 as it continues to progress its flagship gas development on track for 1Q 2021 and the wider Israeli portfolio which has 7.5 Tcf* of gross prospective resources across the Karish and Tanin leases and Blocks (12, 21, 22, 23 and 31) that were awarded as part of the recent offshore licencing round.

Energean will kick off its 2019 campaign with the drilling of the high potential Karish North well in March which has the potential to de-risk more than 1.8 Tcf** of resources across Karish North and Karish East and is in line with the company’s strategy to target near field prospects where potential discoveries can be quickly, economically and safely monetised through its offshore FPSO.

Following Karish North, the Stena DrillMAX will drill three development wells into the Karish Main structure. These three wells will be the producers that deliver 4.2 bcma of gas sales into the Israeli domestic market from 1Q 2021.

Energean is building its FPSO with a production and processing capacity of 8 bcma and first steel cut is planned for 26 November 2018. Current gas sales contracts, which account for all of its existing discovered resource, underpin the 4.2 bcma of firm contracts signed to date, leaving 3.8 bcma of spare capacity for the tie-back of additional discoveries.

Future gas sales contracts will target both the growing Israeli domestic market and key export markets in the region, with a view to delivering value to all stakeholders.

Energean has a strong environmental track record and working successfully with local communities, The company has over 37 years’ experience of working safely in environmentally sensitive locations in NE Greece and is focused on transferring this safety and success to all areas where it is present. As the first operator of a FPSO in the eastern Mediterranean, Energean is committed to the safe production of hydrocarbons in Israel as well as being focused on leaving as little environmental footprint as possible.

 

 

Looser terms for oil tankers at ports would worsen fuel smuggling issue

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A return to looser regulations for oil supply tankers anchored at Greek ports threatens to worsen the country’s fuel smuggling problem, depriving the Greek State of substantial tax revenues.

A legislative revision currently being worked on by government officials would, if implemented, reintroduce lax terms not requiring tax-related inspections of tankers loaded with fuel and stationed at ports – without corresponding orders – as storage facilities.

Such an arrangement had been permitted in the past as a tax relief measure for the fuel sector but was swiftly terminated by a finance and economy ministry decision in 2002, imposed to tackle illicit fuel trade.

In comments to energypress, sector officials have questioned the incentives behind the government’s latest move.

The loose observation by state authorities of an inflow-outflow monitoring system for the fuel sector, introduced in 2014 as a measure to counter fuel smuggling, combined with the possible return to lax terms for oil supply tankers at ports, is expected to intensify the country’s fuel smuggling problem.

An elevated special consumption tax (EFK) imposed on fuel, in Greece in addition to a VAT rate of 24 percent, has driven many sector players to illicit trade.

Besides depriving the Greek State of tax revenues, the easier terms being considered for oil supply tankers at ports would increase the threat of oil-spill accidents and environmental damage. Just over a year ago, an oil tanker sunk in the Saronic Gulf, just off Athens, spilling a significant amount of oil into the sea for one of the country’s worst environmental disasters.

 

Union action no threat to PPC, ELPE sales, officials assure

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The energy ministry and TAIPED, the state privatization fund, have both reassured respective action taken by union groups representing the main power utility PPC and ELPE (Hellenic Petroleum) will not disrupt ongoing privatization efforts for either.

All necessary steps have been made to ensure smooth progress of a bailout-required sale of PPC lignite units and mines representing 40 percent of the power utility’s lignite capacity, the energy ministry has  declared.

As for the ELPE sale, TAIPED – representing the Greek State, offering 20.5 of its 35.5 percent stake along with Paneuropean’s 30.47 percent of 45.47 percent held – has opted not to comment on the mobilization efforts of PSEEP, the ELPE workers union group, suggesting it does not fear a disruption of the 50.1 percent sale.

Genop, the PPC union, has filed a case to the Council of State, Greece’s Supreme Administrative Court, seeking a rejection of environmental terms concerning the Meliti power facility included in PPC’s sale package. This move’s ultimate aim is to delay the overall sale.

PSEEP has taken triple action, filing its ELPE case to the local Capital Market Commission, which has prompted a public offering procedure dispute, London bourse authorities, and European Parliament’s Committee on Petitions (PETI), believing a violation of European law exists.