Prinos

Government pursuing Egypt carbon emissions storage plan

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The Greek government is pursuing the prospect of transporting and storing CO2 emission quantities beyond the EU, in Egypt, as part of a plan to help local industries reduce their carbon footprint through carbon capture and storage (CCS) solutions.

Athens has reached out to the European Commission for a revision of its industrial emissions management strategy that could permit storage of captured CO2 in countries outside the EU.

The Greek government supports that the geology in Europe’s south differs from that in the north, meaning that geological structures suitable for CO2 storage in Mediterranean countries are scarce.

The prospect of Greek industries utilizing carbon emissions storage infrastructure to be developed in Egypt has been extensively discussed at recent meetings between the governments of the two countries.

These talks have been constructive and established firm ground for further cooperation between Greece and Egypt in the CCS sector, amongst other fields, sources told energypress.

Greece’s carbon emissions are estimated to total 15 million tons, annually, well above the storage capacity of the prospective Prinos CCS project planned by Energean in the country’s north. This project is expected to offer a carbon storage capacity of between 3 and 4 million tons.

EDEYEP exploring two more areas in north for CCS potential

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EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, appears to have identified two more areas in Greece’s north, besides Prinos, that could be appropriate for the development of carbon capture and storage (CCS) projects.

Unlike Prinos, a hydrocarbon deposit, the new areas identified by the company are deep saline aquifers, or geological formations consisting of water permeable rocks that are saturated with salt water.

CO2 storage needs of industrial producers are constantly rising throughout Europe. This trend has led to more extensive scanning of both hydrocarbon and non-hydrocarbon areas, onshore and offshore, for suitable sites that could cater to CCS needs.

One of the two areas identified by EDEYEP is situated in Greece’s central Macedonian region and is spread both onshore and offshore. The other is in western Macedonia’s Grevena region.

Both locations, selected from a longer list that resulted from an initial survey conducted by EDEYEP in 2020, seem to possess attributes suitable for CCS projects, namely large capacity and a proven safe and secure storage environment.

EDEYEP, joined by EKETA, the National Center for Research and Technological Development, has been surveying the CCS potential of the aforementioned locations for quite some time with support from an EU-funded PilotSTRATEGY CCUS program, designed to promote exploration of sites in southern and eastern Europe for development of large-scale CCS projects.

Brussels set to approve state support plan for Prinos CCS

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The European Commission is set to approve Greek State funding support for Energean’s Prinos CCS project following the completion of a third round of exchange between Greece’s energy ministry and the Brussels authority on the issue, energypress sources have informed.

Pre-notification of the support scheme was announced last June, but this was followed by three rounds of consultation entailing questions which the Greek ministry was required to answer, in line with the European Commission’s CEEAG procedures concerning guidelines on State aid in the climate, environment and energy sectors.

The Prinos CCS project has been included on the sixth edition of the EU’s PCI/PMI list.

Greek gas grid operator DESFA has already received funding support worth 75 million euros through the REPowerEU program for the development of a pipeline to serve carbon capture units planned to be installed by cement producers Heracles and Titan at their respective facilities in Milaki, on the island Evia, and Kamari, in the Viotia region, slightly northwest of Athens.

DESFA’s pipeline will deliver emissions from the two production plants to a carbon dioxide liquefaction facility, which will also be built by DESFA but will not be supported by REPowerEU funding.

The liquefied emissions of the two cement plants will then be transferred for permanent storage at the Prinos CCS, an underground facility to be developed by Energean.

Talks have begun at a European level, as highlighted in a recent European Commission report, for the establishment of an extensive CO2 transport network by 2050.

According to the report, CO2 transport pipelines in the EU could reach up to 19,000 km by 2050 and will require investments of between 9.3 and 23.1 billion euros.

Greece is considered among the European countries that can potentially contribute to CO2 storage, the Prinos underground storage facility being pivotal to this potential.

Energean CEO meets with Israeli president on local role

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Energean Group CEO Mathios Rigas and the company’s Country Manager in Israel, Shaul Zemach, have held a crucial meeting with the Israeli President Isaac Herzog, for talks focused on the importance of natural gas production for Israel and the energy market of the wider eastern Mediterranean region, according to posts by Energean on its social media accounts.

Mr. Rigas stressed the importance of domestic production for both the Israeli economy and consumers, confirming that he and Energean remain fully committed to Israel’s secure energy supply.

“Strengthening gas exploration, development and production in the Mediterranean will be crucial for a just and secure energy transition in the region. We are proud to be a catalyst for regional energy development as the leading independent exploration and production company focused on natural gas, the environment, society and corporate governance,” the Energean CEO declared during the meeting.

The company, listed on the London and Israeli stock exchanges, which started from Prinos in Kavala, northern Greece, has been producing natural gas in Israel from the Karish field since 2022 with its “Energean Power” unit, the only FPSO (Floating, Production, Storage, Offloading) facility operating in the eastern Mediterranean. It covers about 50 percent of Israel’s domestic gas needs, producing at a rate of about 6 billion cubic meters per year.

Energean also expects to begin producing, in the the first quarter of this year, from the Karish North field, which the company discovered in 2019.

The Israeli government recently approved Phase 1 of the Development Plan for the Katlan gas field. Katlan, also known as the Olympus Area, was discovered in 2022 by Energean and can be used for export if Israel grants the necessary permits.

Israel’s interest in Energean’s production is obviously very high, as highlighted by the Israeli Minister of Energy and Infrastructure Eli Cohen’s recent visit to the “Energean Power” facility.

REPowerEU: €75m for DESFA pipeline serving Prinos CCS

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Gas grid operator DESFA stands to receive funding support worth 75 million euros through the REPowerEU program for the development of a pipeline to serve carbon capture units planned to be installed by cement producers Heracles and Titan at their respective facilities in Milaki, on the island Evia, and Kamari, in the Viotia region, slightly northwest of Athens.

The pipeline will deliver emissions from the two production plants to a carbon dioxide liquefaction facility, which will also be built by DESFA but will not be supported by REPowerEU funding.

The liquefied emissions of the two cement plants will then be transferred for permanent storage at the Prinos CCS, to be developed by Energean.

The liquefaction facility will be located at a coastal area in the wider Athens area, one possibility being the islet Revithoussa. The choice of the location will be made once technical studies have been carried out by DESFA.

The project is planned to be developed concurrently with Energean’s Prinos CCS. The pipeline is planned for launch in 2026 following its completion late in 2025.

Prinos CCS state aid talks with European Commission begin

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Prinos CCS, a carbon capture and storage project being promoted by upstream company Energean as Greece’s first CCS facility, at a depleted underwater Prinos field, south of Kavala, is approaching the stage of development.

The Greek ministry has pre-notified the European Commission on a relevant support scheme, within the framework of Climate, Energy and Environmental Aid Guidelines, allowing exceptions to an EU ban on state aid in the climate, environment and energy sectors.

The ministry’s pre-notification is expected to initiate consultation between the two sides for the formation of a support scheme that will need to be appraised and approved by Brussels.

Greek officials have also submitted a funding request for 50 million euros through the REPowerEU facility.

Prinos CCS has been included in a sixth edition of a PCI/PMI list, which was given the green light yesterday by a relevant Brussels committee but still needs to be approved by European Parliament and the European Council.

PCI/PMI status would facilitate financing for the CCS project’s development plans through the Connecting Europe Facility, the EU fund supporting infrastructure investments in transport, energy, digital and telecommunication projects. This status could also lead to favorable borrowing terms for the project.

Greek gas grid operator DESFA is supporting the effort to secure PCI/PMI status for the Prinos CCS project.

DESFA’s role in the project’s development would entail constructing a network for collecting CO2 quantities. Industries operating in the wider Athens area would be connected to this network.

CO2 amounts would be liquefied and temporarily stored at a facility near the port of Elefsina, west of Athens, then loaded onto CO2 tankers and shipped out to the Prinos CCS.

Energean holds a license for the Prinos facility, currently running until August, 2024. As a next step, the company will need to secure a social and environmental impact study. Its approval would enable Energean to take a next step and apply to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, for a CO2 storage license, which would make the company its operator.

Energean plans to start operating the Prinos CCS in late 2025 or early 2026 at a first-phase level for storage of up to 1 million tons of CO2 per year.

 

Italy aiming for CO2 exports to Prinos facility by early 2030

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Italy is focusing on efforts to export captured CO2 quantities for storage in Greece starting early next decade.

A joint carbon capture and storage (CCS) project involving Greece, Italy and France, also open to the participation of other countries in the future, was presented earlier this year in the neighboring country’s revised National Energy and Climate Plan, as part of the TEN-E regulation, offering guidelines for cross-border energy infrastructure.

Rome is seeking to channel CO2 quantities to Greece for storage at the depleted Prinos field. According to Italy’s NECP, facilities with a capacity of 3.6 million tons per year will be built in Italy to offer export potential to Greece from the first half of 2030.

As a next step, Italy needs to complete a regulatory framework for carbon capture, before establishing related bilateral contacts with Greece.

The underground Prinos storage facility is planned to be operational no sooner than three years from now, with an initial CO2 storage capacity of between 0.5 and 1 million tons, which could be boosted in the future.

The project has been included in the Recovery and Resilience Facility (RRF), while an application has also been submitted for EU Innovation Fund support.

Motor Oil, Titan CCS grants step towards value chain

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Energy group Motor Oil and cement producer TITAN have been selected for EU Innovation Fund grants, supporting innovative low-carbon technologies, for respective carbon capture and storage (CCS) initiatives taken by the two corporate groups.

Their selections promise to create opportunities for synergies and the development of a domestic value chain in the CCS sector.

For example, an annual sum of 1.9 million tons of CO2 to be captured at TITAN’s production facility in Viotia’s Kamari area, slightly northwest of Athens, will benefit Energean’s CCS project at its depleted offshore oil fields in the northern part of the Aegean Sea.

The Prinos CCS also stands to gain from Innovation Fund selection for cement industry Holcim’s production facility in Croatia, as Prinos is the nearest CCS facility. On a larger scale, the Prinos CCS can develop into southeast Europe’s first CCS facility catering to industry.

Motor Oil’s Iris project, concerning carbon capture at the energy group’s Oil’s refinery in Corinth, west of Athens, has been selected for a 127 million-euro Innovation Fund grant, it has just been announced.

This development gives Motor Oil the opportunity to greatly reduce its carbon footprint, produce 56,000 tons of blue hydrogen annually, and prepare the groundwork for e-fuel production, through the development and operation of a new low-carbon synthetic methanol production plant.

TITAN’s Ifestos carbon capture project, also just selected for an Innovation Fund grant, will enable the group to produce approximately 3 million tons of zero-carbon cement on an annual basis.

Energean’s Prinos field losses seen reaching €32m in 2021

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Upstream company Energean’s Prinos field concession, south of Kavala in northern Greece, is projected to incur yet another increase in losses this year, in excess of 32 million euros, according to a 2021 budget submitted by the company to EDEY, the Greek Hydrocarbon Management Company.

These losses, which do not include debt payments for investments made in previous years, will add to accumulated losses of 200 million euros incurred by the company through its operations at Prinos, Greece’s only active hydrocarbon field.

Production at the Prinos field is expected to narrowly exceed a total of 500,000 barrels this year, according to the company budget’s projections.

The budget’s projections were based on the assumptions of an average Brent index oil price of 60 dollars per barrel, reduced revenues of between 7 and 8 dollars per barrel at the Prinos field as a result of the inferior quality of oil produced, as well as a euro-dollar exchange rate of 1.20.

Based on these figures, the Prinos field’s revenue for 2021 is projected to reach 22.3 million euros, with expenses reaching 54.3 million euros.

Despite the negative results amid an unfavorable climate, Energean plans to recommence investments at the Gulf of Kavala’s “Epsilon” field with an amount of 13 million euros, part of total investments worth 23 million euros.

Prinos is currently producing from 14 wells, two out of which are horizontal at the North Prinos and Epsilon Fields.

The horizontal drills at the Epsilon field are expected to begin producing 15 months after the recommencement of investments.

These investments will include the completion of a new platform at the Lamda deposit, to emerge as the first new platform in Greece since 1977. Prinos began producing 40 years ago.

 

 

Prinos support package, worth €100m, submitted to Parliament

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A financial support plan for upstream company Energean’s Prinos field, south of Kavala, comprised of a state-guaranteed commercial loan of 90.5 million euros for the group’s domestic subsidiary, plus a supplementary loan of 9.5 million euros from the Greek State, has been submitted to Greek Parliament for approval following its endorsement by the European Commission.

The financial support to be offered for Energean’s Prinos field, based on a temporary EU support framework established to offer economic support in response to pandemic-related effects, will be provided by December 31, 2021, used to cover Energean’s investment and working capital needs over 12 months, and will have a maximum duration of 8 years.

The European Commission offered its approval of the support package as it deemed that Energean generates the greatest proportion of its domestic revenues through the sale of crude, acknowledging this activity has been hit hard by plummeting oil prices amid the pandemic, making it difficult for the company to gain access to capital markets.

According to the company’s results for 2020, announced at the end of April, Energean’s Greek subsidiary incurred operating losses of 83.4 million euros in 2020, forcing its parent company to provide it with 62.4 million euros during the year.

According to sources, Energean’s Prinos activity lost 120 million euros over the two-year period covering 2019 and 2020.

Despite improved oil price levels, more recently, the subsidiary’s inability to invest as a result of a lack of financing has led to a further reduction of production, which is expected to lead to losses of approximately 40 million euros this year.

Energean Prinos field support to include State participation

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A financial support plan for upstream company Energean’s Prinos field, south of Kavala, just announced by the European Commission, will be comprised of a state-guaranteed commercial loan of 90.5 million euros for the group’s domestic subsidiary, plus a supplementary loan of 9.5 million euros from the Greek State. Greek Parliament still needs to approve the plan.

As part of the plan, the Greek State will appoint a representative to the Board of Directors of the company to monitor the utilization of this financing.

Also, the financial support terms for Energean’s Prinos field, under pressure in recent years as a result of deteriorated market conditions, include a series of key guarantees for the Greek State.

Besides Energean’s bank loan, to be repaid, with interest, to the participating bank, the company’s domestic subsidiary will also need to pay related fees to the Greek State for the latter’s provision of the loan guarantee enabling the company to borrow.

The financial support will be provided until December 31, 2021, will be used to cover Energean’s investment and working capital needs over the next 12 months, and will have a maximum duration of 8 years, according to the terms.

According to Energean sources, activities at the Prinos field in 2019 and 2020 resulted in losses totaling 120 million euros. Despite an improvement in oil prices, a lack of finances for investment has led to a further reduction in output at Prinos, which is expected to lead to a further loss this year, estimated at 40 million euros.

The financing support plan will ensure the completion of development at the Epsilon deposit, which Energean considers essential to ensure ongoing operations of Prinos, along with the implementation of administrative and organizational restructuring planned by the company with the aim of reducing operating costs and moving ahead with a series of new projects.

Energean upbeat on support prospects for Prinos, 4-year extension granted

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Upstream company Energean has received promising feedback from the finance and energy ministries in its effort to secure an EU support package to protect the sustainability of its offshore Prinos field, the country’s only producing unit, in the North Aegean.

The government has relayed that it is cautiously optimistic of a favorable outcome in its support-package application submitted to the European Commission.

Brussels appears to be concluding its exchange with Greek government officials handling the issue and could soon offer its approval, sources informed.

The effort has lasted nearly nine months from the time Greek government officials submitted a support request accompanied by Energean’s Prinos business plan, worth nearly 75 million euros.

The time taken in Brussels has been attributed to this essentially being the EU’s sole case concerning a support request in the hydrocarbon exploration sector.

Meanwhile, EDEY, the Greek Hydrocarbon Management Company, has granted Energean Oil & Gas, a member of the Energean Group, a four-year extension, until March 19, 2025, for exploration activities aiming to identify new fields in the Prinos and South Kavala areas, following a request submitted by the company.

Prinos field threatened by poor results, decline projection

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Operations at the Prinos field, Greece’s only producing oil field, in the country’s offshore north, are in great danger of being disrupted following poor production figures in 2020 and a further decline predicted for 2021, a wider company update just delivered by Energean Oil & Gas, the field’s license holder, has suggested.

In 2020, production at the oil field reached just 1,800 barrels per day, while its inferior-quality output was sold at a discount price, between 7 to 8 dollars below Brent levels.

This level of output represents less than 4 percent of Energean’s overall production, which, last year, reached 48,000 barrels – mostly natural gas.

Output at the Prinos field is projected to drop below 1,500 bpd in 2021 as, even if a rescue plan for the facility is approved, related investments needed at the facility will take time to complete.

The rescue plan, announced last June by Energean and dubbed Green Prinos, envisions an adjustment for eco-friendly operations through a series of investments worth 75 million euros.

Energean’s administration, in its company update to analysts, expressed hope that a solution can be found in the first quarter of 2021 for its rescue plan, submitted to the Greek government, which then forwarded the plan to the European Commission.

The rescue plan has remained stuck at the European Directorate for Competition, whose approval is required.

Energean is considering the development of a carbon capture and storage project at its Prinos field, which would be the first in Greece, promising new life for the project, along with the support of investments at field E, whose development depends on the outcome of a financing bid, company officials informed.

Overall, the news for the Prinos field is not good. Losses incurred by this unit since September, 2019, when its crisis began before being further aggravated by the pandemic, have exceeded 100 million euros.

This loss, however, has not affected the overall financial results of Energean, generating significant earnings in Egypt, primarily. Israel, too, could become a major source of earnings for the company as of next year.

Prinos rescue plan may offer Greek State stake in Energean Oil & Gas SA

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A government rescue plan for Prinos, Greece’s only producing oil field, in the country’s offshore north, will offer the Greek State a small stake in Energean Oil & Gas, the field’s operator, and provide state guarantees for 75 million euros in financing needed by the company in 2020 and 2021 for investments included in its business plan, according to well informed sources.

The government is believed to be just days away from announcing its finalized rescue plan for Energean’s Prinos field, hit hard by the pandemic and lower international oil prices, factors that have impacted the global upstream industry.

Greek government officials are currently discussing the Prinos rescue plan with the European Commission, whose approval will be required. Though alterations to the aforementioned solution cannot be ruled out, good news on the rescue plan appears imminent.

Energean Oil & Gas recently published a business plan that lists interventions needed for Prinos’ rescue as well as the field’s sustainability over the next 15 years. The plan’s measures include actions to reduce emissions and drastically reduce the company’s environmental footprint.

Energean has invested approximately 460 million euros at Prinos during the company’s 13 years of operations at the field, including 50 million euros between last September and May, to avoid the closure of offshore and related onshore facilities. Some 270 jobs have been protected.

Prinos field rescue effort now at the finance ministry

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A government effort to rescue offshore Prinos, Greece’s only producing field, in the north, is now in the hands of the finance ministry following preceding work at the energy ministry, sources have informed.

The field, like the wider upstream industry, has been impacted by the pandemic and plunge in oil prices.

Deputy finance minister Theodoros Skylakakis is now handling the Prinos rescue case following the transfer of a related file from the energy ministry.

According to the sources, three scenarios are being considered. A financing plan through a loan with Greek State guarantees appears to be the top priority. A second option entails the utilization of an alternate form of state aid. The other consideration involves the Greek State’s equity participation in the Prinos field’s license holder, Energean Oil & Gas.

The European Commission will need to offer its approval to any of these options as they all represent forms of state aid.

Energy ministry sources have avoided offering details but are confident a solution is in the making.

Rescue talks for Prinos, Greece’s only producing field, making progress

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Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Ministry still examining Energean Prinos rescue plan

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The energy ministry is continuing its close examination of a business plan delivered by Energean Oil & Gas for the rescue of its Prinos offshore oil field in northern Greece, requiring investments totaling 75 million euros in 2020 and 2021 if the venture is to be kept afloat following the negative impact of  lower oil prices and the pandemic, according to the company.

“The ministry is continuing to examine the data provided by the company as well as the business plan. They have determined the size of the necessary funds at 75 million euros but we, too, need to verify this,” an energy ministry official informed.

Early signs of a petroleum market rebound are encouraging but this does not mean that the market has fully recovered, the official added.

The ministry acknowledges the potential damage closure of the oil field would have on the local economy and, as a result, is looking for solutions, the official added.

Energean officials have stressed that time is running out for the oil field’s rescue, urgently needing a solution to remain viable.

The government will need to utilize the EU’s temporary state aid framework to ensure financial support for the Prinos oil field, Greece’s only producing field at present, and its necessary investments.

Crisis’ impact on Prinos looked at, Energean up against time

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The energy ministry has turned to specialized consulting firm assistance for a detailed analysis on the pandemic’s financial impact on the Prinos offshore oil field in northern Greece, the country’s only producing field at present.

The energy ministry’s secretary-general Alexandra Sdoukou, handling the matter on behalf of the ministry, is currently holding talks on a daily basis with officials at Energean Oil & Gas, the field’s license holder.

The company wants emergency government support amid the extraordinary market conditions, energypress sources have informed.

The two sides are believed to be closely examining related data to determine the extent of the financial damage, for this project, due to the plunge in international oil prices, prompted by lower demand amid the widespread lockdown.

Energean Oil & Gas has invested 50 million euros between September, 2019 and May to keep production flowing at Prinos, an aging field, sources noted.

Sustainability is becoming a growing challenge at this venture, employing a workforce of approximately 270 employees, market authorities have noted. A cutdown in operating costs is seen as essential.

A cash injection for “Epsilon”, a fresher field in the area also licensed to Energean, could be made as a support for the company. Another option may entail financial support by the Greek State in exchange for a stake in Energean. Alternatively, state guarantees could be offered for a bank loan.

The finance ministry is also expected to become involved in the Prinos rescue effort. Much work lies ahead before any decisions can be reached. These will require European Commission approval.

Gov’t examining pandemic’s impact on Prinos oil field

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The pandemic’s financial impact on offshore Prinos, Greece’s only producing oil field, south of Kavala, is being closely examined by government officials and specialized advisors, energypress sources have informed.

Conclusions have yet to be reached on the extent of the financial damage to the Prinos oil field, licensed to Energean Oil & Gas, but it appears the government will seek financial support for this venture through the European Commission’s Directorate-General for Competition.

Though it is still considered too early for any decisions, the government has apparently already recognized the damage inflicted on Prinos by the pandemic and subsequent drop in demand and oil prices.

The Greek government has pledged production continuity and job protection for Prinos, as was recently highlighted by deputy energy minister Gerassimos Thomas.

Limits have been exhausted to keep Prinos operating, Energean Oil & Gas officials have pointed out, stressing the cost burden on the company.

 

Energean to utilize measures for crisis-hit Prinos field

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Energean Oil & Gas, whose offshore Prinos oil field in the country’s north has been heavily impacted by the coronavirus pandemic’s effects on the global economy, including record-low oil prices, intends to utilize relief measures offered by the Greek government for various sectors, including the upstream industry.

The government’s relief measures, introduced to help enterprises weather the financial impact of the unprecedented coronavirus crisis, promise respite in a variety of forms, including tax payment delays, VAT discounts as well as employee allowances covering suspended work contracts.

Energean, which has invested tens of millions of euros to keep upstream  activities alive in Greece, now needs to reduce its Prinos operating costs and keep production flowing. A disruption of production and resumption at a latter date is not technically feasible. Prinos is Greece’s only producing oil field.

The oil price plunge has made big impact on the Prinos field, an old high-cost venture whose production costs are estimated at 21.5 dollars per barrel.

This specific field produces heavy crude of higher refining demands. Subsequently, Energean sells the unit’s output to BP at price levels that are between 7 and 8 dollars lower per barrel compared to Brent prices.

Production at Prinos is declining. Output peaked at 4,000 barrels per day in 2018 but fell to 3,300 in 2019 and is projected to slide further in 2020, officials noted.

Energean has cut back on investments at Prinos by 80 million dollars.

International crude prices plunged from 66 dollars to less than 25 dollars per barrel in the first quarter. Prices have not fallen so low since 2003.

 

Energean’s Prinos oil field pressured by price slump

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The oil-price plunge in international markets has placed under pressure  Greece’s only producing oil field, Epsilon, an old, high-cost unit operated by Energean Oil & Gas at an estimated 20 dollars per barrel.

Energean has made a considerable, long-running effort to keep Greece’s sole oil field alive through major investment, required to achieve acceptable production levels. However, production at this oil field is unprofitable during times of deflated oil prices, as is the case at present.

Major international credit institutions are nowadays offering far less financial support to oil-producing ventures as a result of negative conditions affecting the upstream sector. Widespread climate-change policies have not helped, while the situation has now been made worse by the ongoing oil-price crisis.

Energean’s Prinos offshore oil field, in Greece’s north, is currently producing smaller amounts after hitting a record level of 4,000 barrels per day in 2018. Last year, production at the oil field fell to 3,300 barrels per day. The current year is expected to be even more challenging, pundits have noted.

Energean is now placing greater emphasis on fully developing its neighboring Epsilon oil field. The company is awaiting the construction of a new platform, a project undertaken by a consortium of Romanian companies, so that production at Epsilon may commence in approximately one year.

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.