ELPE, Edison acquire Petroceltic stake in Gulf of Patras license

Hellenic Petroleum (ELPE) and Italy’s Edison now control an offshore licence in the Gulf of Patras, western Greece, as a 50-50 joint venture following the departure of Irish oil company Petroceltic Resources Plc from the consortium in which the three companies held equal shares.

ELPE has released a statement announcing that negotiations between the consortium’s members have concluded for the transfer of Petroceltic’s 33.3 percent share to ELPE and Edison. The agreement is subject to the energy ministry’s approval, the announcement noted.

“We are pleased to announce that ELPE has agreed to acquire half the share, increasing its stake to 50 percent, while Edison has acted likewise, following the intention of Petroceltic Resources to transfer all its rights in the Gulf of Patras licence,” remarked Grigoris Stergioulis, ELPE’s managing director. “We will continue to implement our strategy in the field of hydrocarbon exploration and production, focusing on Greece. Research work in the Patras area is continuing seamlessly, without delay, with the objective of discovering oil in this promising area as soon as possible,” he continued.

Stergioulis noted that 3D geophysical survey work would be conducted as the venture’s next step by UK firm Dolphin Geophysical, to use a newly acquired vessel for the operation.

Petroceltic to withdraw from Gulf of Patras license

Irish oil company Petroceltic is set to exit from a consortium holding an offshore licence in the Gulf of Patras, western Greece, and will transfer its interest to its joint venture partners.

The company, in its latest update on its overall business activities, noted that, in Greece, it has concluded negotiations for an exit from the Gulf of Patras licence.

A consortium comprised of Petroceltic, Hellenic Petroleum (ELPE), and Italy’s Edison, each holding respective stakes of 33.3 percent, was awarded the Gulf of Patras licence for an offshore block measuring 1,900 square kilometers through an international tender finalized in May, 2014.

The move by Petroceltic, a mid-sized oil enterprise producing around 25,000 barrels per day, comes as part of a wider company strategy to transfer assets not possessing immediate earnings potential as a means of reducing exposure to exploration-related expenses. The plunge in crude prices was the driving force behind the decision. The company’s overall exploration costs amount to less than four million euros until 2017.

ELPE holds the consortium’s preferential right for the 33.3 percent being given up by Petroceltic. ELPE officials have informed media that the two sides are close to reaching a deal for the stake’s transfer. In its announcement, Petroceltic went a step further by noting that it “has concluded negotiations to exit its interest in the Gulf of Patras offshore license in Greece.”

Petroceltic had announced it would withdraw from this offshore license last March at an industry conference in London focused on oil investment opportunities in Greece.

The Gulf of Patras is ranked as one of Greece’s most promising spots for oil exploration. A series of geological and seismic surveys have been conducted in the area over the years, beginning in 1978.

Petroceltic has also withdrawn its interests from ventures in Egypt, transferring stakes held in three regions to Italy’s Edison for 9.5 million dollars. Petroceltic incurred a loss of about 1.5 million dollars in this Egyptian venture.

ELPE has maintained an optimistic note. Officials at the company have pointed out that the adverse conditions prompted by lower crude prices are creating major opportunities. For instance, hydrocarbon exploration costs have dropped considerably, they noted, citing geophysical and seismic survey services. These are currently offered for half the price compared to two years ago, while equipment is more readily available, ELPE officials have stressed.