"Energy independence is important regardless of whether there’s a war or not. Israel is the only Mediterranean country that is energy independent. The mistake that the Europeans made is that they handed the energy keys to President of Russia Vladimir Putin, and when war broke out, gas prices skyrocketed. But in Israel, they remained stable," Mathios Rigas, CEO of energy company Energean (LSE: ENOG), said yesterday at the Globes Israel Business Conference. Energean owns the rights in the Karish and Tanin gas reservoirs off Israel’s coast.
"The biggest challenge we face in Europe is that if there’s a cold winter and there’s any disruption to the gas supply, gas prices in Europe will soar again, and inflation will rise," Rigas warned. "The reason is that there has been no investment in gas production. That’s the great advantage that Israel has today," he added.
Rigas said that the dispute over Israel’s gas plan had been decided, and that Israel’s population was now benefitting from the fact that the government at the time did not succumb to pressure and went ahead with the plan. "Israel started exploring its natural resources a decade ago, and everyone remembers the arguments and the protests over who the gas belonged to. Today, the fact that Israel can keep the gas it needs, and also export, and also maintain relatively low gas prices, has enabled it to carry on with its life without being dependent on anybody. In business as in life, to be dependent on someone else is always a very bad thing, and Israel has managed to be energy independent thanks to the gas that we and other companies have developed in Israel."
Rigas explained that, in his view, there was no sense in keeping the gas for Israel for the next hundred years, for two reasons. The first is that, unless they can make profits, companies will not develop the gas reserves, and so there will be no gas; and the second is that it is by no means certain that the world will consume gas in a hundred years’ time.
"Israel benefits from low gas prices, and for that it also needs to export," Rigas said. "There are two problems with keeping gas in the ground for 100 years. The first is that in that event there will never be production. Companies are here to make money, we are answerable to investors on the stock exchange. People who have invested in our shares expect to see results and dividends. Besides that, Israel did something else smart that others didn’t do. Gas production generates tax revenues today. I don’t know what will happen in another hundred years; perhaps they won’t need gas. So now is the time to exploit the resources for every country. Not just Israel."
On the attack by Hamas on October 7, Rigas said that it caught him just as he was about to fly to Israel. "It was a terrible day for us and for all those who were meant to take part in our tour. Of course it gave rise to a great deal of concern on our part and on the part of investors. Managing a business in which you don’t know what’s happening and you have many employees onshore and at sea is probably the most tense moment in my career."
"Completely committed to Israel"
"We have always been committed to Israel, to gas supply security for the country," Rigas said. "This was my promise when I took responsibility for Karish in 2017. The terrible event of October 7 turned us in the middle of a crisis into the suppliers of 60% of the gas consumed in Israel. You can imagine the weight of the responsibility we had for the energy supply for the whole country. As I said, Energean is completely committed to Israel."
Asked whether gas production strengthens, or at least keeps alive, the peace agreement with Egypt, Rigas said, "Everyone knows that, in history, oil has been a reason for the outbreak of major wars. In the case of Israel’s gas, I think that it’s just the opposite. This is a tool that facilitates peace. We were the catalyst that compelled the two countries to reach agreement - an agreement that made production possible. In end, all of us around the Mediterranean need this gas."
Asked whether the threats had grown following the massacre in the south of Israel and the Swords of Iron war, Rigas said, "Anyone who chooses to do business in gas and oil in the East Mediterranean has to be prepared for challenges like these. I live in Greece, and were in conflict with Turkey for about 50 years. Israel is a high priority for us. I can tell you that we did a deal, and Algeria blocked it, because it didn’t want a company that had ties with Israel. So we paid a price for it, because we can’t do business with places that are hostile to Israel.
"For those who don’t know Israel, the risk map has grown. But for us, who have lived and breathed Israel in the past few years, we feel comfortable with the country, and with the risks, and we continue to take them. We expect that the government will continue to support companies that are committed to Israel, so that they will continue to support the region."
The 2023 Globes Israel Business Conference was held in partnership with Bank Hapoalim and The Phoenix Holdings, with sponsorship from Meta, Shufersal, Bazan, Amdocs, Pagaya, Energean, MSCI, Cisco, and the Yanai Foundation, and with the participation of Mekorot, Israel Ports Company, the Port of Ashdod, and the Israel Innovation Authority.
Published by Globes, Israel business news - en.globes.co.il - on December 20, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.