Energean: The “black hole” of Prinos is growing

The “black hole” of the exploitation of Prinos, the only oil field in Greece, is expected to grow even more this year. And already the accumulated losses amount to 180 million euros.

According to the budget submitted by Energean to the Hellenic Hydrocarbon Management Company (HHRM S.A.), the financial loss for 2021 will exceed 32 million euros – not counting the repayment of loans from investments made in previous years.

According to the budget, which has been prepared with a forecast for an average price of Brent at $ 60 per barrel (revenue from the sale of Prinos production is $ 7-8 lower due to quality) and at the euro / dollar rate of 1.20, production is expected to be just over 500,000 barrels this year.

Thus, revenues of 22.3 million euros and expenses of 54.3 million euros are expected in a year in which investments for the development of the Epsilon deposit are expected to resume.

The Epsilon deposit

For this project, an investment of around 13 million euros is planned, while the total investments will reach 23 million euros. It is worth noting here that the scheduled shut down for the maintenance of the facilities has been planned, which is expected to take place in October and will last 17 days.

Production will result from a total of 14 boreholes, two of which, one in North Prinos and the second in Epsilon, are horizontal. According to Energean’s plans, the vertical drillings in the Epsilon field will enter production about 15 months after the resumption of investments, which include the completion of construction and, of course, the installation of the new Lambda platform above the field.

It will be the first platform placed in Greece since 1977 in a historic development – as, of course, the 40th anniversary of the start of oil production in Prinos, which are being completed these days.

The voluntary departure of employees

It is noted that the budget has taken into account the gradual reduction of permanent staff to 180 employees in 2022 from 240 today, with the culmination of the volunteer program that has already begun and aims to reduce operating costs by more than 2 million per year in relation to at the level of 2020. On the contrary, the budget submitted to ΗΗΡΜ does not include the repayment of loans from investments made in previous years, which is of the order of 40 million euros for this year.

Negotiations on loans

As it is known, after the relevant approval of the Commission, the Greek Parliament two months ago voted for the regulation for the support of Prinos with two loans, totaling 100 million euros, in order to make the necessary investments to complete the development of the Epsilon deposit. The two loans must be disbursed within 2021 and repaid with interest within 8 years, while one of them, amounting to 9.5 million euros, is of reduced security and is granted directly by the Greek State, which also places a representative in the administration of the Greek subsidiary of the Energean group, to which Prinos belongs.

Negotiations are underway between Energean and commercial banks for the largest loan, amounting to 90.5 million euros, for which a guarantee has been granted by the Greek State.