Energean Oil & Gas recently announced the extension of the Prinos long-term offtake agreement with BP until 1 November 2025.
Earlier in February, Energean announced the signing of a reserves-based senior facility agreement, amounting to USD 180 million, with the European Bank for Reconstruction and Development (EBRD), the Black Sea Trade and Development Bank, EximBank Romania and Intesa Sanpaolo Bank.
All of the Group’s production of crude oil from the Prinos basin is currently sold to BP under the offtake agreement, which was originally signed in 2013 and covered the period until 31 July 2021.
The extension of this agreement secures Energean’s sales of crude oil from the Prinos basin for a further four years, helping safeguard the Group’s cash flow.
Energean is implementing a new investment programme to further increase production from the Prinos and Prinos North oil fields, as well as to develop the Epsilon oil field, which is also a part of the Prinos licence. The new programme, to be financed by a USD 180 million reserve-based lending facility, consists of drilling of up to 25 wells and the installation of two new platforms up to 2021. This will be executed by both the Energean Force, Energean’s owned and operated offshore drilling rig, and the jack-up GSP Jupiter that will drill the first 3 Epsilon wells.
The scope of work includes the drilling of three wells at Lamda Platform location (Aegean Sea), using GSP Jupiter jack-up rig, as well as the Project Management, Construction, Transportation & Installation Engineering, Procurement, Construction, Installation, Pre-commissioning, Assistance in the Commissioning and Start-up of the Lamda platform and inter-connecting pipelines.
We are very pleased to extend our agreement with BP, a relationship that started in April 2013 and is now developing into a strategic partnership that secures cash flow from our production in Greece. BP has consistently lifted Prinos cargoes in the past four years and has established the Prinos crude in the international markets. Increasing our production from Greece, the USD 1.6 billion capex Phase 1 development of the Karish and Tanin gas fields, offshore Israel, and the exploration of the Eastern Mediterranean remain our focus and we believe the extended BP offtake agreement further strengthens our position to deliver maximum value from the Prinos licence,” Energean Oil & Gas CEO, Mathios Rigas, commented.
Energean is a leading independent E&P company focused on the Eastern Mediterranean region, where it operates in offshore Israel, Greece, the Adriatic and Egypt. It is the only oil and gas producer in Greece and its predecessors have a combined 36-year history of operating offshore and onshore assets in environmentally sensitive areas.
Energean employs 388 oil and gas professionals in total. The Group has 2P reserves of 50.0 MMbbls of oil and 6 Bcf of gas and 2C resources of 22.9 MMbbls of oil and 11.5 Bcf of gas at its Prinos Basin and Katakolo fields, and its associate, Energean Israel, has 2C resources of 32.8 MMbbls of liquids and 2.4 Tcf of gas.
The Company received approval in August 2017 from the Israeli Government of the FDP for the Karish and Tanin fields, aiming to use an FPSO and produce first gas in 2021. The Company is also pursuing an ongoing investment and development programme to increase production from the Prinos and Prinos North oil fields and develop the Epsilon oil field, located in the Gulf of Kavala, Northern Greece. The Company has secured a 25-year exploitation license for the Katakolo offshore block in Western Greece.
Energean also has significant exploration potential in the other licences held in offshore Israel, Western Greece, and Montenegro.
About Prinos Oil Field
The Prinos Oil Field is the main structure in the Prinos-Kavala basin, located offshore in the Gulf of Kavala. It covers an area of 6 km2 and is about 8 km north-west of the island of Thassos and 18 km south of the mainland of Northern Greece, in a water 31 metres deep.
Following exploration of the Prinos Basin in the 1970s, the Prinos Field was discovered in 1974 through the drilling of Prinos-1, the first exploration well drilled in the area. It was developed during the late 1970s and brought into production in 1981.
The initial development of the field took place from 1979 until 1981, following the drilling of the delineation wells which confirmed the extent of the Prinos reservoir,. Facilities were installed offshore and onshore to allow 30,000 bopd to be produced along with associated gas. Two drilling jackets were installed above the Prinos Field and bridge linked to an unmanned offshore processing platform. Via a pipeline, these offshore facilities were linked by pipeline to the shore, where a complex gas and oil processing plant was constructed along with oil storage tanks (500,000 bbl capacity) and offshore loading terminal.
Crude oil production commenced in early 1981, at initial rates of 8,000 to 10,000 bopd, with production peaking at more than 27,000 bopd in 1985.
Prinos 2P reserves were initially estimated at 60 million oil bbls, but the field has already produced more than 110 million bbls since 1981.
The Prinos Field is formed by a low relief faulted anticline, with oil trapped in the Prinos Group reservoir of Miocene Age at a depth of between 2,490 and 2,770 metres TVDSS. The reservoir produces under-saturated sour crude oil with an API gravity of between 27 and 30 degrees.
Prinos contains up to 60 per cent hydrogen sulphide gas. The onshore Sigma plant features facilities to convert it to sulphur. The sulphur is then sold to a local fertilizer plant.