Greek Firm's EBRD Loan Should Cut Flaring
The European Bank for Reconstruction and Development (EBRD) signed a $20mn loan July 5 with Greece’s only oil and gas producer Energean. It will support exploration of the Prinos Basin in northeast Greece, new projects in western Greece, and reduce gas flaring.
The new loan follows a $75mn EBRD loan to Energean signed in May related to its ongoing development of the Prinos offshore oil-producing field which has been producing since 1981. Energean has been executing a 15-well drilling programme to redevelop it since September 2015, including the installation of a new unmanned platform. Two wells are already on stream and it is about to complete the third. Prinos currently produces 4,000 b/d oil and restricted amounts of gas, but Energean aims to increase this output up to 10,000 b/d by mid-2018.
As well as backing exploration, the new loan will also support introduction of new technology, investments to avoid gas flaring, and a number of resource efficiency investments to optimise the supply and use of energy.
Energean assets map
Privately-owned Energean has a diversified portfolio of production, development and exploration assets in Greece and Egypt.
The firm has onshore Ioannina and offshore Katakolon blocks in western Greece. Katakolon is the only discovery to date offshore Greece, and oil and gas were tested there in the 1980s; an Energean spokesperson says it plans to submit a full development plan of the field in September.
Although not involved in a Greek government licensing round for three other offshore blocks in the Ionian Sea offshore western Greece, Energean is in ongoing negotiations with the nearby Montenegro government for two offshore blocks there.
EBRD does not often lend to upstream firms. Its director for Greece and Cyprus, Sabina Dziurman, said: “After our first agreement in March we are very pleased to have a second signing today. It underlines our confidence in Energean, a truly remarkable and impressive Greek company with great potential, and our commitment to its further success.”
The EBRD began investing in Greece on a temporary basis in 2015 to support the country’s economic recovery. It says that apart from 30mn bbls of proven and probable oil reserves that Energean has been developing in the Prinos oilfield, the firm has 28mn bbls contingent resources in the same licence where significant exploration potential was also identified in a 2015 seismic survey. Energean is 45%-owned by US hedge fund Third Point.
Mark Smedley | www.naturalgaseurope.com