Photo: Prinos oil & gas producing complex, Greece. Source: Energean

Energean getting $118 million aid due to ‘severe losses’

Oil and gas company Energean is getting financial aid in the amount of $118 million due to losses suffered during last year’s oil price collapse in the wake of the Covid-19 outbreak.

The European Commission said earlier this week it had approved two Greek measures, expected to mobilise a total of €100 million (about $118 million), to support Energean in the context of the coronavirus outbreak.

The Commission said that these measures were approved under the State aid Temporary Framework.

Energean, focused on developing resources in the Mediterranean, is operating the only oil extraction site in Greece under a concession contract.

The Commission noted that Energean generates most of its revenues from the sale of crude oil and has suffered severe losses due to the collapse of oil prices in the wake of the coronavirus outbreak.

According to the Commissions, Energean is currently facing difficulties in accessing financing on the market. Therefore, the aid measures aim at addressing these liquidity needs.

The support will take the form of a public guarantee on a commercial loan of around €90.5 million to be contracted by Energean and a subordinated loan amounting to €9.5 million by the Greek State.

In particular, the support will be granted no later than 31 December 2021 and it will be used to cover Energean’s investment and working capital needs during the next twelve months.

Furthermore, the support will have a duration of maximum eight years, in line with the Temporary Framework provision that allows to modulate the standard duration of six years if there is appropriate compensation.

The Commission concluded that the measures are necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a Member State.

In recent Energean-related news, TechnipFMC has completed the wet store installation of three steel lazy wave risers for Energean’s Karish and Tanin development project offshore Israel.