ECONOMY

Kavala Oil sees great potential in new deposits

Greek petroleum company Kavala Oil, a subsidiary of UK-based Regal Petroleum, is facing upbeat prospects after the discovery of three deposits in the Kallirachi field, west of the island of Thasos in the northern Aegean, earlier this year. One of the wells, drilled to a depth of 8,386 feet, intersected 200 feet of net oil pay, and the recoverable field reserves are estimated at 227 million barrels of oil. The drill, which cost $30 million, also revealed large quantities of natural gas. Initial combustion tests showed that the deposits are economically viable but operations will not begin before the International Institute of Oil Research, based in Denmark, carries out further studies on which planning will be based. Regal Petroleum said after the find in February that the find had exceeded expectations by «a considerable margin.» The available data indicates that the Kallirachi field may supply more than 35,000 barrels a day, which would make Kavala Oil viable for the next 10-15 years, particularly in view of the current high price of oil. The oil research institute also concluded that another of the three deposits, located off Nea Peramos on the northern mainland, may provide up to 15,000 barrels a day. Kavala Oil already operates in the Prinos field north of Thasos, which yields about 5,000 barrels a day, and hopes to roughly double that after starting new drilling in the same field. More exploration planned The company plans further explorative drilling in the north Prinos and the nearby Epsilon fields, for which an oil rig is currently being constructed by Hellenic Shipyards. Prinos and Epsilon have been shown to have recoverable reserves of 80 million barrels, the equivalent of around eight years’ supply. Regal estimated in February that the break-even level of production from Prinos, north Prinos and Epsilon is 4,200 barrels per day, assuming an oil price of $20 per barrel. The price has more than doubled since then.