Greek company Energean Oil & Gas plans to build its own production system in the eastern Mediterranean at a cost of up to $1.5 billion to tap two Israeli offshore gas fields, the group's CEO said on Jan. 11.
Energean, Greece's only oil producer, wants to bring a financial partner into the project to develop the Tanin and Karish fields, which are situated in deep waters about 100 kilometers (62 miles) off Israel's coast and have combined gas reserves estimated at 2.4 trillion cubic feet (Tcf).
Energean bought Karish and Tanin last August for $148 million from U.S.-Israeli partners Delek Group and Noble Energy Inc. (NYSE: NBL), who are developing two much larger fields nearby and were required by Israel to sell off other discoveries in an effort to open up the sector to competition.
Rather than piggyback off that group's infrastructure, an idea previously suggested by some experts, Energean plans to lease its own FPSO vessel and build a separate pipeline to Israel.
"We are going to be a totally independent system," CEO Mathios Rigas told Reuters, adding that a combination of local and international banks will help finance the $1.3 billion to $1.5 billion that is needed.
Before making a final investment decision, which is expected in December, the Israeli government must first approve the development plan and Energean needs to secure sales contracts for 3 Bcm of gas per year, Rigas said.
Israel has determined that gas from Tanin and Karish must be sold domestically.
The Israeli fields are Energean's biggest assets and the company is looking to lighten the load.
"In the next three to six months, maximum, we will bring in a financial partner ... that will work with us to share the risk and help us develop the project," Rigas said.
He expects gas production to begin in 2020.
Recommended Reading
E&P Highlights: April 29, 2024
2024-04-29 - Here’s a roundup of the latest E&P headlines, including a new contract award and drilling technology.
Kosmos Energy’s RBL Increased, Maturity Date Extended
2024-04-29 - Kosmos Energy’s reserve-based lending facility’s size has been increased by about 8% to $1.35 billion from $1.25 billion, with current commitments of approximately $1.2 billion.
Barnett & Beyond: Marathon, Oxy, Peers Testing Deeper Permian Zones
2024-04-29 - Marathon Oil, Occidental, Continental Resources and others are reaching under the Permian’s popular benches for new drilling locations. Analysts think there are areas of the basin where the Permian’s deeper zones can compete for capital.
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-28 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Repsol to Drop Marcellus Rig in June
2024-04-28 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.