Author: Stuart Elliott
Editor: Alisdair Bowles
Editor: Alisdair Bowles
There had been concern that work on the 8 Bcm/year capacity FPSO Energean Power could be delayed due to travel restrictions imposed in China after the start of the coronavirus outbreak.
"In the coming weeks, you will see our FPSO hull sail away from China to Singapore, a key milestone in the delivery of first gas from Karish, which is on track for H1 2021," CEO Mathios Rigas said following the release of the company's 2019 earnings.
Energean said final work on the vessel would take place in Singapore and the vessel sailed to Israel around year-end for installation.
In February, Energean said it had received notice from contractor TechnipFMC concerning the coronavirus outbreak in China and its potential impact on work on the FPSO hull.
It said TechnipFMC had said the Chinese travel restrictions constituted a force majeure event, potentially entitling it to claim a time extension.
On Thursday, Energean said that despite the coronavirus, the workforce in the Chinese shipyard had been maintained above 550 people.
Edison acquisition
Ahead of first Israeli gas in 2021, Energean is set to become a significant producer with the planned closure of its $750 million deal to buy Edison E&P, the upstream business of the Italian utility.
Rigas, speaking to S&P Global Platts last month, said he hoped to close the deal in the first half of 2020.
However, in the earnings release, Energean said it now hoped to complete the acquisition "in 2020", signaling a possible delay.
"Energean is working actively to close the acquisition as soon as possible," it said. The deal has an effective date of January 1, 2019.
Energean Thursday also confirmed that Edison E&P's Algerian assets would now not be part of the deal.
"Carve out of the Algerian assets from the transaction perimeter has been agreed in principle at an effective price of $155 million," it said, adding: "The carve out remains subject to a signed, amended SPA."
In late 2019 Algeria signaled it would block the sale of Edison E&P's business there to Energean. Edison E&P holds an 11% stake in the Reggane Nord gas project, which started production in December 2017.
It followed a similar move by Algiers earlier in the year when it blocked the sale of Anadarko's Algerian assets to France's Total.
Energean said it expected 2020 pro forma production to be 42,500-50,000 boe/d once the Edison E&P deal was complete.
Rigas said Thursday the company was well-positioned despite the current macroeconomic uncertainty.
"The COVID-19 pandemic and OPEC+ price war have put us into uncertain times, but we are well-placed to weather the challenges," he said.
"Once the Edison E&P transaction is completed, around 70% of our production will be sold under long-term gas sales agreements that insulate our future revenues against oil price volatility," he said.
SOURCE
Rigas, speaking to S&P Global Platts last month, said he hoped to close the deal in the first half of 2020.
However, in the earnings release, Energean said it now hoped to complete the acquisition "in 2020", signaling a possible delay.
"Energean is working actively to close the acquisition as soon as possible," it said. The deal has an effective date of January 1, 2019.
Energean Thursday also confirmed that Edison E&P's Algerian assets would now not be part of the deal.
"Carve out of the Algerian assets from the transaction perimeter has been agreed in principle at an effective price of $155 million," it said, adding: "The carve out remains subject to a signed, amended SPA."
In late 2019 Algeria signaled it would block the sale of Edison E&P's business there to Energean. Edison E&P holds an 11% stake in the Reggane Nord gas project, which started production in December 2017.
It followed a similar move by Algiers earlier in the year when it blocked the sale of Anadarko's Algerian assets to France's Total.
Energean said it expected 2020 pro forma production to be 42,500-50,000 boe/d once the Edison E&P deal was complete.
Rigas said Thursday the company was well-positioned despite the current macroeconomic uncertainty.
"The COVID-19 pandemic and OPEC+ price war have put us into uncertain times, but we are well-placed to weather the challenges," he said.
"Once the Edison E&P transaction is completed, around 70% of our production will be sold under long-term gas sales agreements that insulate our future revenues against oil price volatility," he said.
SOURCE
