When the twin crises of the pandemic and the oil rate slump destabilized the entire US oil sector, forcing many companies to shut down and multinationals to freeze their investment plans, the oil reserves at Prinos in the northeastern Aegean appeared doomed.
Dodging fate will depend on the answer the government gives to the dilemma over whether or not the state participates in Prinos oil extraction. The application of German flag carrier Lufthansa’s model – whereby the state offers cash for shares – is one of the scenarios on the table, and possibly the only realistic one, given that it would be near impossible to find the necessary working capital for the reserve to keep working through borrowing, as the Prinos activity does not fulfill the necessary banking criteria.
The output of Prinos turned loss-making long before the slump in oil rates, forcing Energean, the developer of the oil field, to slash its investment program by $80 million. Since oil prices nosedived, Energean has told the government that production will cease without funding, as it cannot continue to keep operating at a loss, putting 270 jobs on the line too.