There have been several reports in the Israeli media in the past few weeks, citing military and diplomatic sources, to the effect that production from the Karish gas field will be deferred to October, in order to avoid the possibility of a confrontation with Hezbollah during the negotiations with Lebanon on the maritime border between the two countries’ economic zones.
“Globes” has repeatedly reported that Energean (TASE: ENOG; LSE: ENOG), which holds the production rights in Karish, stands by its announcement in the Spring that production will start in the third quarter, that is, before the end of September.
Today, Greek-US energy company Energean released its first half financials. In the accompanying press release, Mathios Rigas, the company’s CEO and controlling shareholder, is quoted as saying, “Our flagship Karish project is on track to start production within weeks and will enhance energy security in Israel and the region.”
Talking to investors, Rigas was even more forthright, saying that a great deal of work had been done on the rig towards production, and that it would start in the current quarter, giving September 20 as the likely date when the gas will start to flow. There could be no clearer declaration. Rigas added that the company was aware of the negotiations between Israel and Lebanon with US mediation, and expressed complete confidence in Israel and its government and its ability to defend its interests.
The reports from the diplomatic and military sources ignored the fact that Energean is committed under signed contracts to start supplying gas to customers, not to mention its commitment to its investors.
US President Joe Biden’s Special Envoy and Coordinator for International Energy Affairs Amos Hochstein is due in the region tomorrow after meetings in Paris with the heads of French energy company Total. Total is due to develop the Qana/Sidon gas field, which is partly in the area in dispute between Israel and Lebanon. Hochstein will first go to Beirut to meet outgoing president Michel Aoun and Prime Minister Najib Mikati.
“Globes” has reported that under the agreement being formulated, Total will receive a concession to produce gas from the entire Qana/Sidon reservoir, and Israel will receive a share of profits. There is apparently a proposal for a border in the disputed triangle that will be a zigzag rather than a straight line.
Other sections of the proposed agreement deal with security for the gas platforms and their distance from the maritime border that will be drawn. Israel and Lebanon are meant to submit to the UN their agreement to the border, and it will be determined officially.
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Energean reported revenue of $339 million for the first half year and a pretax profit of $198.2 million. The company has declared a first dividend, of $0.30 per share.
Published by Globes, Israel business news – en.globes.co.il – on September 8, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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