Israel’s Petroleum Council on Wednesday approved the acquisition of the Karish and Tanin natural gas fields by Greek oil and gas exploration company Energean, which is 45%-owned by Daniel Loeb‘s hedge fund Third Point Reinsurance, The fields are being acquired from Delek Drilling and and Noble Energy for $148 million.
This step was taken after the government required Delek Group to sell off the two tiny fields as part of an effort to open the gas market to more competition. Energean is focused on Greece, the Adriatic, the Eastern Mediterranean and North Africa.
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Energean says that within six months it will present Israel’s Ministry of National Infrastructures, Energy and Water Resources with its plan to develop the fields. Energian intends to start production in 2020, and that the cost of developing the fields will be about $1 billion.
Karis and Tanin which discovered in 2013 and 2011 off coast Israel, together contain an estimated 68 billion cubic meters (about 2.4 trillion cubic feet) of natural gas.
The Greek company will be selecting contracting partners in the near future and will also start negotiations with potential gas users, Energean chairman, CEO and founder Mathios Rigas said.
“The acquisition of Karish and Tanin and their development is a significant step for Energean, “said Rigas, “but it is also a big milestone for Israel in developing its gas strategy, by bringing competition in the local market. Energean is committed to delivering a mutually beneficial and successful development and gas sales program as partners with the Israeli government.”
He added, “Karish and Tanin will supply the Israeli domestic market for many years and we are eager to press ahead with its development as soon as possible. We will be submitting a comprehensive Field Development Plan within six months of closing the transaction, and will be selecting our proposed contracting partners in the near future. We will also be starting negotiations with potential gas users and are confident that we can deliver competitive gas prices and services for the Israeli consumers.”
The Karish and Tanin plan is the third that Energean is committed to over the next few years with development programs being prepared for the Epsilon (North Aegean Sea) and West Katakolon (Western Greece/Ionian Sea) with combined 2P reserves of 25 MMbbl. Energean has additional exploration acreage in Western Greece, Montenegro and Egypt. The company anticipates an investment of around $1.3 billion in exploration and development (including Karish and Tanin) over the next 5 years.