Oil giant BP agrees to buy entire Prinos oil output

Oil giant BP agrees to buy entire Prinos oil output


By Lefteris Yallouros – Athens

Oil giant British Petroleum (BP) signed a deal Monday with the Greek Environment, Energy & Climate Change ministry and Greek company Energean Oil & Gas to buy the oil output from the Prinos field in the northern Aegean.

The agreement involves the sale of the entire output Energean generates from the field to BP worth approximately USD 500 million.

The entire Prinos output reportedly amounts to 4,000 barrels per day.

BP and the Greek government also agreed for the country’s Energy ministry to disengage Energean Oil & Gas from a term in the 1999 contract that forces state-owned Hellenic Petroleum (ELPE) to acquire the Prinos output.

BP’s interest in the domestic hydrocarbon market is good news for the government as it tackled red tape in order to finally see the Prinos revival project through.

Greek Environment, Energy & Climate Change minister Yannis Maniatis said “today’s development is practically proof that the Greek economy has turned a fresh page. A large international business Group, BP, has placed its trust in the local market at a time when the oil sector has justly created expectations while showing it could contribute immediately to Greece’s return to growth”.

The minister also said the production of oil in Prinos is safeguarded by the presence of BP and that jobs will be maintained. Finally, he added a message has been sent to the markets that the Greek economy and the country’s companies are trusted”.

Energean Oil CEO Mathios Rigas in turn stated that the company can continue to further invest in the area of Prinos following the agreement with BP. Energean plans to double oil production within two years and invest as much as EUR 150 million in new drilling projects.

Greece is actively seeking to take advantage of hydrocarbon deposits in Greek controlled areas with approximately 300 foreign oil companies having been in touch with the Greek Ministry of Environment, Energy and Climate Change, expressing an interest in the seismic results from surveys in the Ionian sea area and northern Crete, carried out by  Norwegian company, Petroleum Geo-Services (PGS).

The interest suggests that some may proceed to purchase data and then to participate in further exploration, the rights for which the Greek government plans to launch in the spring of 2014, when the ministry is expected to receive detailed results from PGS.