ECONOMY

Greece’s Energean looks at offshore tenders amid Russia interest

Energean Oil & Gas, Greece’s oil and gas producer, may bid for exploration rights in 20 offshore areas in the country as Prime Minister Alexis Tsipras’s government is trying to attract Russian investors.

“We will examine the data and would look to build a partnership with an international player,” Chief Executive Officer Mathios Rigas said in an interview Thursday. “With oil at around $50 a barrel, deep water exploration is a big risk.”

Greece this week extended the deadline of the tender to search for hydrocarbons in areas in the west of the country and south of Crete by two months to attract wider interest. Russian companies will bid, Greek Energy Ministry Panagiotis Lafazanis has said. Tsipras plans to visit President Vladimir Putin next week amid a stalemate with creditors over releasing funds from a 240 billion-euro ($261 billion) bailout fund.

“We would welcome foreign companies to come to Greece for the tender as deep water exploration requires specific skills,” Rigas said near Athens, after inaugurating the country’s first floating oil rig. “By keeping the same terms for the offshore tender, Greece is showing international investors that there is stability in the Greek oil sector.”

Energean is focused on developing the offshore Prinos basin in the north Aegean Sea, to raise production to 10,000 barrels a day by the end of 2016 from 1,800 barrels today, Rigas said. It spent $30 million for the new rig, part of its $200 million, three-year investment plan, Rigas said. Prinos has 30 million barrels of proven and probable reserves, according to ERC Equipose, an independent reservoir evaluation firm.

“It’s difficult to attract foreign companies to Greece with the uncertainty around the country’s future,” Rigas said.

Energean has a six-year deal for BP Plc to buy all oil produced in Prinos. Greece could raise taxes and royalties of more than $400 million in the next 15 years from the field, based on Brent prices of $55 to $70 a barrel, Energean estimates. Greece forecast revenue of about 15 billion euros in 30 years from three other drilling concessions awarded last year.

[Bloomberg]