Energean Oil & Gas is becoming a leader in the eastern Mediterranean region as it revives Greek production, adds new licenses, bids for offshore concessions and moves into Israel, Chief Executive Officer Mathios Rigas said.
“We’re emerging as a regional oil and gas champion in the eastern Mediterranean,” Rigas said in an interview in Athens, pointing to the company’s work in reviving Greece’s only domestic oil production, at the Prinos field, under “demanding environmental conditions.”
Energean, Greece’s only hydrocarbon explorer and producer, has begun a $225 million investment plan for 2014-2016 aimed at raising production in the Prinos basin in the north Aegean Sea to 10,000 barrels a day by the end of 2016 from 1,800 barrels today, Rigas said.
Energean will use a new drilling rig it bought in August, due to arrive in Greece “in the next couple of weeks,” to drill 15 wells over the next three years starting in January, Rigas said.
Energean is “examining raising capital in the near future on international markets to fund the Prinos investments,” Rigas said. “We’re protecting our core business by investing in our core asset,” he said. Prinos has 30 million barrels of proven and probable, or 2P, reserves valued at $1 billion, based on an independent evaluation, according to Rigas.
The development plan for Prinos, which envisages two new platforms in 2015 in the Prinos North and Epsilon satellite oil fields, is “low risk,” Rigas said. “Reserves are next to existing infrastructure and we have in place since January a six-year deal for BP to buy all current and future oil production from Prinos.”
The Greek parliament on September 18 ratified the choice of a venture of Energean and Petra Petroleum for an exploration concession in an inland area close to Ioannina and in the offshore Katakolo block along with Trajan Oil & Gas.
After a three-year exploration period in Ioannina, the goal is to start drilling in the fourth or fifth year “with multiple targets in deep and shallow areas to maximize potential,” Rigas said. The block contains around 100 million barrels of oil and 1 trillion cubic feet of natural gas, according to Greek government estimates.
The Katakolo block “is small but key,” Rigas said. “It’s the only proven oil field in western Greece and has similar geology to the whole of the region.” Drilling is planned after a two-year development period and “the block has upside,” he said. Greece estimates Katakolo has three to five million barrels of recoverable oil.
Energean will bid as Greece auctions rights to explore for hydrocarbons in 20 offshore areas in the west of the country and south of Crete and in three onshore areas. “We will be present in the bidding round and we’re looking to build partnerships with international players to bid together,” Rigas said.
A venture of Energean and Mediterranean Oil & Gas PLC will present a technical bid for offshore oil and gas concessions in Montenegro on October 14, Rigas said, with authorities in that country expected to complete evaluations by the end of the year.
Energean is waiting for the Israeli government to approve an Israeli Petroleum Council recommendation to make the company a 25 percent partner and the operator of the Sara and Myra offshore gas fields.
An Israeli go-ahead would be “a big step, as it’s the first time that a Greek company will be a deep-water operator,” Rigas said. “It’s also the first time that a well will be drilled in the Cretaceous formation in the Levantine basin, and if successful, could be a new oil play for Israel, Cyprus and the whole region.”
Energean is also waiting to see Albania’s plans for a hydrocarbon exploration tender and looking at Croatia’s oil and gas bidding round to determine if the company can take more exploration onto its books. “We’ll make an evaluation after we know what happens in Greece and Montenegro,” Rigas said.