Energean, an oil and gas company with operations in the Mediterranean, is looking to expand its production by developing more gas prospects in the region, despite the uncertainty caused by the Israel-Gaza war, its chief executive has said.
The London-listed company provides 60 per cent of Israel’s domestic natural gas demand from the Karish offshore gasfield, located in the Israeli segment of the Mediterranean Sea.
Reliance on Energean’s gas output increased after Tel Aviv ordered a temporary shutdown of the Chevron-operated Tamar gasfield in the aftermath of the October 7 attack. Production was restarted a month later.
“We have not been affected operationally [and] we continue to produce the gas that we can and that goes to bring energy security for the wider East Mediterranean,” Mathios Rigas told The National on the sidelines of the Cop28 climate summit in Dubai.
“We get involved in producing oil and gas. We leave the geopolitics and the politics to the people that have created them and need to solve them,” Mr Rigas said.
The company, which currently has a production of 150,000 barrels oil-equivalent per day, has operations in Israel, Egypt, Italy, Greece, Croatia and the UK.
“We are looking to do more and our focus is to develop more gas resources in the wider region, not just the eastern Mediterranean region,” Mr Rigas said.
The Levant Basin in the eastern Mediterranean has one of the world's largest natural gas reserves.
In 2009 and 2010, consortiums comprising US and Israeli companies discovered the Tamar and Leviathan gasfields, which are estimated to hold 26 trillion cubic feet of natural gas.
Within the past two decades, Israel has switched from being a net importer of oil and gas to an exporter of the commodity to countries such as Egypt and Jordan.
Egypt liquefies the gas it acquires from Israel for export. The North African country shipped most of its liquefied natural gas to Europe last year as the Ukraine war resulted in a sharp drop in Moscow’s exports to the continent.
Europe is exposed to spot gas prices amid a lack of progress in long-term LNG contracts and low domestic production, Mr Rigas said.
Natural gas prices reached a record high last year after Russia’s military offensive against Ukraine, causing economic hardship for European households.
“Spot gas prices have to do with the weather. It has to do with geopolitical events or operational events. All it takes is one small disruption and then the market will be imbalanced,” Mr Rigas said.
However, the Energean chief expects a “long future” for the commodity as many countries eliminate the use of coal.
“There's a huge demand for gas around the world and as we displace coal, there's going to be an even bigger demand,” Mr Rigas said.
“We're all moving towards electric vehicles that still need electricity. This electricity has to be produced from cleaner sources and natural gas is one of them.”
However, the International Energy Agency expects global gas demand to slow in the coming years amid declining consumption in mature markets due to an “accelerated” roll-out of renewables and improved energy efficiency.
Demand is projected to grow by 1.6 per cent a year between 2022 and 2026, down from an average of 2.5 per cent a year between 2017 and 2021, the agency said in its Gas 2023 Medium-Term Market Report in October.
All energy needed
The effects of two geopolitical conflicts and sluggish economic growth in many economies have raised concerns about energy security.
That has added to the friction between many developed countries and emerging economies regarding the continued use of fossil fuels.
The tripling of renewable energy by 2030 will require trillions of dollars in funding and the oil and gas industry can help with the financing, while providing the technical capabilities, Mr Rigas said.
“People in this Cop are starting to be more realistic and are starting to come to terms that this is not a fight between renewables and the fossil industry,” he said.
