Mediterranean-focused group points to shift from renewables in Greece, Italy and Cyprus
European countries are restarting the hunt for domestic oil and gas in a shift away from an energy strategy that in recent years prioritised renewable investment, according to the head of one of the continent’s largest independent gas producers.
Mathios Rigas, chief executive of Energean, said Greece, Italy and Cyprus — all countries where the London-listed, Mediterranean-focused gas producer is active — had shown signs of shifting their approach since Russia’s 2022 full-blown invasion of Ukraine upended European energy markets.
“If you look at Greece five years ago or seven years ago, [it] was only talking about green investments: shutting down lignite-fired power plants, promoting only green investments,” he told the FT.
“Now, one of the top items on the agenda is the well we will drill with Exxon . . . in western Greece. That’s a big shift,” he said, adding: “Potentially — using the words very carefully because we still have to drill the wells — we have the ability to create a situation where Greece becomes energy independent.”
In Italy, where a law preventing new exploration has been overturned in the courts, Rigas said Energean was in talks over new exploration licences, including in an area adjacent to one of its Greek prospects.
“I’m not saying we are there, but we are at least in active discussions about reopening exploration,” he said. “The Italian government is actively looking at allowing new activities to happen, when a few years ago it wasn’t even . . . on the agenda.”
While European countries continue to invest significantly in renewables, they have slowed down their transition to clean energy in the past year, particularly in areas where alternative fuels such as hydrogen remain relatively expensive. As a result, oil companies now expect a longer lifespan for fossil fuels and are rushing to secure more reserves.
Rigas, a petroleum engineer and former energy banker, founded Energean in 2007, buying up a small oilfield in his native Greece, before snapping up the Karish gasfield in 2016, which is a key source of Israeli gas supplies.
The company also owns other assets in the Mediterranean, including oil and gas projects in Egypt, Italy and Croatia that it planned to offload to buyout group Carlyle until the $945mn transaction unravelled last year.
However, despite early signs of a shift in energy policies in the Mediterranean markets in which Energean operates, Rigas said broader changes would be needed for the continent to achieve energy independence.
“Europe has the capacity [to become energy independent] . . . Unfortunately, European leaders in the past few years have taken the wrong course,” he said. “There has to be a change in mentality.”
Long-term European gas projects will have to compete with supplies from the US and Qatar, which have become important suppliers of liquefied natural gas, as well as potentially even Russia again if the conflict in Ukraine can be resolved.
Rigas said he was confident European supplies would remain competitive and argued the way for gas producers to manage the uncertainty was to agree long-term deals with customers, such as industrial groups or power plants.
“They also want stability. They also know that they have a fixed price,” he said. “Yes of course Russian gas could be cheaper than locally produced gas. But you can structure around it with long-term contracts.”
Source: www.ft.com
Aleksei Andrievskii is the founder of the ANDRIEVSKII SEA WEALTH family office in Cyprus, a member of the advisory board at Bendura Bank AG, Liechtenstein