Oil and gas group Energean calls for an investment boom in the eastern Mediterranean

The chief executive of a London-listed oil and gas company recently threatened by Hezbollah has called for more investment in the energy potential of the eastern Mediterranean after a landmark maritime deal between Lebanon and Israel.

Mathios Rigas, whose Energean delivered the first gas from Israel’s Karish field last month, said the US-brokered deal, after years of on and off negotiations between sworn enemies, offered a “new model” for the resolution of border disputes in the disputed region. Region.

The agreement does not constitute a peace agreement between the two countries, which still do not recognize the other’s governments, but allows the exploitation of hydrocarbons in the region while border negotiations continue.

“[It] presents a new model of how countries that are in conflict can find a way. . . to enable economic development, economic interests, without solving everything,” Rigas told the Financial Times.

Rigas, a Greek national who grew up watching his own country’s border dispute with Turkey, said the deal should encourage more exploration activity in the eastern Mediterranean to make the region a “stable supplier of minerals”. energy” in the EU. “I think there’s a lot more gas to be found,” he said.

Energean is a relative minnow in the oil and gas industry. The explorer, with operations in Israel, Greece, Italy and Egypt, is worth around $3 billion after its shares rose 74% this year. But it has played an outsized role in recent events in the eastern Mediterranean.

In July, Israel shot down three Hezbollah reconnaissance drones heading for Energean’s floating production facility after arriving at the disputed Karish gas field in what Lebanon’s president called a “hostile act”.

A few days later, amid continued Hezbollah threats of more serious attacks, Rigas visited the facility himself to reassure personnel that he was safe to continue working. “I stayed for two or three days,” he said. “The public statements made by the State of Israel gave everyone and me the comfort I needed.”

In the end, US pressure, channeled through US envoy Amos Hochstein, was essential to achieving a breakthrough. The final agreement consisted of separate agreements with the United States, signed by Israeli and Lebanese leaders in their respective countries.

But it is Energean’s commitment to deliver the first gas from the field that appears to have given new impetus to the faltering talks.

“I think we brought with our project a catalyst, because it was a difficult deadline,” said Rigas. “Karish is starting to produce so these two haters had a reason to come together.”

Karish, with about 2 cubic tons of gas reserves, is small compared to other Israeli fields operated by Chevron, Leviathan and Tamar, but already provides additional gas to the Israeli economy.

The border deal also recognizes Lebanon’s rights to part of the prospective Qana field, which could generate much-needed future revenue for its cash-strapped government in Beirut. A consortium led by Total Energies should soon start exploration work.

“Most importantly, our deal allows Lebanon to develop its own resources,” said Rigas, who wants to see gas reserves in the eastern Mediterranean developed for local markets first. “Before we start talking about gas exports from the eastern Mediterranean to Europe, we need to think about how we are going to supply the region that needs this resource.”

The Eastern Mediterranean, including Israel, Egypt and Jordan, already consumes up to 100 billion cubic meters of gas per year, the equivalent of Germany, and continues to grow, he said.

However, in Europe, pressure to reduce dependence on Russian energy has reignited interest in a long-discussed €6 billion pipeline in the eastern Mediterranean to bring gas from Israel, d Egypt and future discoveries towards the EU.

“If you ask me if financially the project is working today, maybe it’s difficult,” Rigas said. “But then I will reverse the question: what is the price to pay to be independent from Russia?”

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