Aegean Energy, the country’s only operator
of oil and gas production, may launch several new drilling operations in the
northern Aegean Sea in coming months after
exploration revealed signs of more undersea hydrocarbon reserves, it said
yesterday.
Aegean Energy Chairman Mathios Rigas told
Kathimerini English Edition in an interview he is confident the company will
tap more oil reserves off the coast of Kavala, in northeastern Greece, by the
end of the first quarter of 2010 as the company ups current production levels.
Aegean Energy, which employs 280 people,
is developing three offshore fields – Prinos, Prinos North and Epsilon – about 18 kilometers
offshore. It expects to increase production levels by 66 percent to 5,000
barrels per day (bpd) by the end of the year, up from 3,000 bpd, ahead of
further possible expansion in 2010.
Aegean Energy, which drills for
hydrocarbons through its 95 percent-owned subsidiary Kavala Oil, is
implementing a five-year $200 million investment plan, the biggest the sector
has seen in Greece
in more than 25 years. Rigas added that international companies are starting to
take a closer look at oil and gas exploration in Greece, one of the few countries in
the region with unexplored potential for hydrocarbon production.
Aegean Energy has entered
uncharted waters for the Greek economy by drilling for oil. What kind of
production facilities do you have and what kind of oil volumes are we talking
about?
Our drilling program for 2009 includes
three wells. There is the well in the Prinos North Field which was successfully
completed at the end of July, one extended-reach well in the Epsilon Field
being drilled at the moment and a sidetrack well in the Prinos Field, which is
scheduled for year-end or early January 2010. We are confident Epsilon will start
producing before year-end, bringing the company’s daily production to between
4,500 and 5,000 bpd, from 3,000 bpd currently. Maximum production capacity
stands at 30,000 bpd.
How are your investment
plans moving along?
We have already invested more than $50
million for the first well and we are investing a further $30 million for
Epsilon. We expect total production of 1.5 million bpd in 2010. However, we are
planning more wells.
Does your exploration
point to more oil in the region?
In March 2009, we conducted a large-scale
seismic study, an operation which is the first phase of exploration, for new
targets in oil and gas off Kavala. This study revealed some very interesting
potential targets which our geologists are reviewing. The question is whether
it is economically viable to produce these hydrocarbons. It is not just about
finding oil, it is also about finding it in quantities and areas that make
sense for it to be produced. Before the year ends we will be able to announce
what our next exploration targets will be.
Are you confident you will
soon be drilling in more areas?
Yes. We intend to extend the contract for
the Ensco 85 jackup rig and use it for at least two more exploration and
appraisal wells in the first quarter of next year.
Oil prices are very
volatile and crucial to your profitability and investments. At what level does
it start being a concern for you?
A price between $60 and $70 per barrel
suggests a healthy level for everyone, oil companies like us can survive and
make more investments. Our own business plan is based on a much lower oil price
of $55 per barrel.
How does Greece stand in
comparison with its neighbors when it comes to oil and gas exploration?
Greece
is one of the few countries in the Mediterranean
that hasn’t been properly explored. Cyprus had a licensing round in
2009. Albania has been
producing a lot of oil for many many years, while there is major activity in Turkey. Romania is one of the major oil producers
offshore and onshore and Libya
also has a lot of activity. The same goes for Tunisia
and Egypt, while Italy is also
very well explored. So if you look around us, everyone has substantial
operations. This is the only spot where there is only one operator working and
one field producing.
How would you rate the
interest in Greece
from foreign oil companies right now?
I think we will see a lot more interest
going forward. Greece
is now on the international gas and oil map. We are paving the way for
international oil and gas companies to look at Greece again. People have started
to ask what is going on in Greece.
Once results start coming out, like we saw in summer with the successful
completion of the well at Prinos North Field, then we will see increasing
interest.