Abu Dhabi, UAESunday 21 July 2019

Development of Gaza Marine field not in the immediate future, says Energean

The Greek company raised $460m from its recent IPO in the London Stock Exchange

The discovery of Gaza Marine nearly two decades ago was seen as a way for Palestine to profit from the Eastern Mediterranean gas bonanza. AP 
The discovery of Gaza Marine nearly two decades ago was seen as a way for Palestine to profit from the Eastern Mediterranean gas bonanza. AP 

Greek energy company Energean does not expect to develop the offshore Gaza Marine field in the immediate future, even as it assigns funds from its recent listing on the London Stock Exchange to building assets in the Eastern Mediterranean.

Gaza Marine is a natural gasfield that lies offshore the Gaza Strip. The field, which was discovered in 2000, falls under the jurisdiction of the Palestinian National Authority, which governs the West Bank. Discovery of the field, which is estimated to hold up to a trillion cubic feet of gas had led to hopes of peace via a possible gas-sharing agreement between Israel, Palestine and Egypt, which lies south of the block.

However, its development remains stalled due to political differences between the Palestinian Authority and Israel.

“I don’t think this is in the immediate future, but things in the region change very quickly,” Energean chief executive Mathios Rigas told The National.

Energean, which was earlier in discussions to acquire 45 per cent of the block, will take a decision on the Gaza Marine concession only if Israel and Palestine come to an agreement on the development of the resource.

“We do not get involved in the politics. We do not sit between discussions that have nothing to do with the development of oil and gas reserves. So it’s the politicians who have to solve the problems and then we come in and operate,” he said.

Energean, which has operations in Greece, Montenegro and Israel, listed on the London Stock Exchange earlier this month. The company raised $460 million (Dh1.69 billion) from the initial public offering, which will largely be put into developing two Israeli gasfields Karish and Tanin, where drilling commenced beginning of March.

Energean raised a total of $2bn last year, of which $460m was IPO equity and $1.6bn was project financing with Morgan Stanley, Natixis, Bank Hapoalim and Societe Generale, for the development of the Karish field, offshore Israel. Another $200m is dedicated to operations in Greece and backed by the European Bank for Reconstruction and Development, said Mr Rigas.

The company is evaluating other opportunities in the Eastern Mediterranean, which has in recent years proved a bonanza for gas exploration for majors and smaller players such as Energean.

“We’re looking at every opportunity in the region, both in the power sector, in the industrial sector. The availability of gas in the region helps a lot of industries develop around this cheap and clean form energy that is available now to the Eastern Mediterranean that wasn’t available before,” said Mr Rigas.

Exploration activity across that region is gathering momentum, following the discovery of the massive Zohr gasfield offshore Egypt in 2015. The North African state has since stopped importing the fuel and looks to transform into a gas exporting hub. The country awarded 12 concessions last month in one of its largest licensing rounds, which brought in the US oil major Exxon. Israel launched its second licensing round in November, while Lebanon, which has banked on possible discovery of gas in its territorial waters as a panacea for its economic woes, is said to be preparing for a second bid round.

Cyprus, which has also joined the race to extract gas from the Eastern Mediterranean, announced its third licensing round in January.

Energean, however, will test the waters carefully when it comes to participating in the Cypriot licensing round, given the government’s preference for engaging with majors.

“We spoke to the Cypriots but they only encouraged the very big IOCs [international oil companies] to participate in the bid rounds,” said Mr Rigas.

“They’ve made some discoveries but still the island doesn’t have gas.”

Updated: March 15, 2019 05:05 PM

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