The Greek Ministry of Energy and Energean Oil & Gas, a Greek E&P company, have agreed on the conversion of the exploration license for the proven West Katakolon offshore field to a 25-year exploitation license with immediate effect.
The West Katakolon Exploitation area is part of the Katakolon Concession Area off Western Greece, and it covers a 60 square kilometer area with around 10 million barrels of recoverable oil.
Energean said on Tuesday that West Katakolon is the third oil and gas field to go into development in Greece, following on from the Prinos Oil Field and South Kavala Natural Gas Field.
Prinos and South Kavala are located offshore in the North Aegean Sea while Katakolon lies in the Ionian Sea. All three fields are operated by Energean.
The company added that a Field Development Plan (FDP) would be submitted to the Ministry of Energy by the end of February 2017. Drilling is planned for 2018 and will use extended reach drilling (ERD) technology to drill from onshore to offshore reservoirs. First oil is expected in 2018 or 2019 and will be the first ever hydrocarbons produced in the west of the country.
Energean already has several active development plans which will be executed over the next few years. Those plans include the Epsilon Oil Field, part of the Prinos Concession, and the much larger proven Karish and Tanin natural gas fields, offshore Israel bought from Delek Drilling and Avner for $148 million.
Mathios Rigas, CEO of Energean, said: “The progression of West Katakolon into its development phase is an important milestone for both Energean and Greece. It will be the first ever hydrocarbon production program in the west of the country and a major boost to the economy following the challenges of the last few years.
“We are committing to the $50 million investment in Katakolon, as a first step in seeking to open up the oil and gas opportunities in this highly promising territory – an area with similar geology to the wider Adriatic Zone, well known for its prolific hydrocarbon systems in Italy, Albania, and Croatia.
“Energean has taken advantage of its strong cash flow from Prinos to make sure it is well placed for a recovery in the oil price. Energean is aiming to increase production to 10,000 barrels per day by 2018 through an ongoing $200 million investment program with low break-even costs.
“We have acquired two new licenses in Western Greece, been awarded two blocks offshore Montenegro and one more onshore Western Greece, and most recently purchased the Karish and Tanin natural gas fields in Israel. Energean has also prepared for exploration drilling in Egypt, onshore West Kom Ombo block in the next few months.”