Energean to begin exploratory Israel drilling

Mathios Rigas Photo: PR

Energean is looking for more natural gas nearby what it already has in the Karish reservoir.

After five years in Israel with no exploratory drillings, Greek company Energean today notified the London Stock Exchange (LSE) that it intended to begin drilling in Israeli economic waters. The first exploratory drilling will be in the company's "old" block in the northern part of the Karish lease.

Energean also announced that it was considering additional drillings in the eastern part of Karish and in Block 12, where the company six months ago won a licenses tender held by the Ministry of National Infrastructure, Energy, and Water Resources. The company says that it will carry out the Karish north exploratory drillings just before development of three wells from the main proven Karish reservoir.

The company says that the purpose of the exploratory drilling in Karish is to "take full advantage of all the existing resources" in the lease. In the event of a discovery, Energean plans to connect the existing pipeline in the facility to the floating production storage and offloading (FPSO) unit, which has a gas production and processing capacity of 8 BCM. The drilling is scheduled for late March 2019 at an estimated gross cost of $15-25 million. An Independent Competent Persons Report by Dutch firm Netherland Sewell & Associates Inc. (NSAI) for the Karish North prospect estimates gross recoverable unrisked prospective resources at 33.5 BCM and 14 million barrels of light oil.

Energean CEO Mathios Rigas stated, "We view Karish North as an attractive near-field exploration opportunity offshore Israel that could deliver significant upside alongside our existing Karish development, for which we have already signed 12 gas contracts and secured 4.2 BCM of supply over an average period of 16 years."

The second company that won licenses in the tender, the results of which were published in December 2017, was Indian consortium ONGC, which won Block 32. The Ministry of National Infrastructures, Energy, and Water Resources granted the Indian consortium a three-year license for natural gas and oil exploration with an extension option. The consortium is currently in the initial stages of collecting material. The Ministry of National Infrastructures, Energy, and Water Resources expects to hold an additional competitive procedure by the end of 2018.

Energean has 13 exploration licenses, five of them outside of Israeli waters in Greece and Montenegro. The Greek company, which acquired the Karish and Tanin reservoirs in Israel following approval of the gas plan, is a competitor of the Leviathan and Tamar natural gas reservoirs, controlled by Yitzhak Tshuva's Delek Group Ltd. (TASE: DLEKG) and Noble Energy.

The holders of rights in the Gaza Marine reservoir yesterday told "Globes" that they were negotiating with Energean for development and operation of the reservoir. Energean has not yet confirmed this assertion. A report by the World Bank estimates that development of the Gaza Marine reservoir will cost $1.2 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Mathios Rigas Photo: PR
Mathios Rigas Photo: PR
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