The CEO's blog, 02/07/24

Halliburton’s LIFE2024 Landmark Innovation Forum & Expo

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The role of gases was at the heart of the discussion at COP - when considering the energy trilemma, the reliable and secure supply of natural gas that is significantly cleaner than coal or fuel oil equivalents can be the foundation of and catalyst for a more sustainable energy dynamic. 

We should also remember that gas does not just mean “natural gas” CH4. The role of the oil and gas industry will be vital in the CCUS value chain. Instead of extracting CH4 we will be injecting CO2, decarbonising heavy industry and protecting industrial capacity and employment, particularly in Europe.

CCS Revolution.

The upstream oil & gas industry has the necessary skill set to lead the CCUS value chain revolution. We understand geology. We understand gas molecule transport and injection. We understand major engineering project management. We understand accessing finance for major engineering projects. “Big Carbon” will come to complement “Big Oil”.

At Energean we are developing the only CO2 Storage project in SE Europe & the greater East Med. Our project will support multiple major industrial employers in the region, decarbonising their operations and underwriting their future. I’m delighted that we have now submitted out application for a Storage Licence to the Greek Government [link to announcement]

East Med. 

The East Med has for many years been a hoped for saviour for EU energy security. This is and remains a pipe dream, just like Nabucco was, but for very different reasons. Unlike the phantom pipeline, there is a lot of gas in the region. However, the primary issue is local demand is not met by local supply. There will be many LNG tankers unloading in Egypt this year.

If governments want energy security, then they need to develop policy that encourages exploration and production and that once there has been a discovery, the molecules are extracted as fast as practicable and affordable. There is 10 TCF of reserves in an EU East Med country that has gone unproduced for years. The regional production levels not only the result of the typical engineering challenges of E&P – there are political challenges at play as well.

Role of Independent E&P.

This is where we came in. We acquired Karish; constructed a regionally unique FPSO; drilled 9 wells; discovered 2 new fields in Karish North and Katlan and in a relatively short amount of time are now producing approx. 150k boepd. This is because it is in our interest to discover, develop and produce swiftly. Our interests are entirely aligned with those of the sovereign state. We hope to repeat the process in Moroccco, where we will drill a well and we hope to support Moroccan energy security within a short space of time through a swift route to production. Innovation is in our DNA – we would not have been able to achieve what we had without embracing innovation and by having a regional and gas focus that allowed us to be expert on the necessary subject matter.

ESG remains vital.

The world has changed a little. 3 years ago, conferences like this would have been more discreet. ESG pressures were restricting access to capital. The majors were bleeding cash buying or setting up green ventures that wouldn’t be cashflow positive for decades. And now? Even if we are not asked about it quite as much, ESG remains vital. We remain totally committed to our ESG leadership position, exemplified by being the first E&P to set a Net Zero target. This is not just talk – even if at the time we were not entirely certain about how to get to NZ. We have made verifiable progress. Energean originally targeted an 85% reduction in carbon intensity from 2019 to 2025. By 2023, we have not only met but exceeded this goal by reducing our carbon emission intensity by 86% compared to our baseline year – from 66.8 to 9.3 kg CO2/boe, we are now heading to 5 kg CO2/boe.  

Energean has always aligned commercial strategy and ESG objectives. We chose to focus on gas because it was the right thing for the planet and for Energean’s long term growth strategy and ability to pay dividend to shareholders. We will continue this strategy as we continue to develop Energean. CO2 Storage will be the same. CCS will be great for the Greek economy. It will support decarbonisation of industry and underwrite employment, as well as being robustly commercial.