Energy Security in Europe

Energy Security in Europe 

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In recent history the topic of global energy security has rarely been of such urgent importance. To overcome Europe’s current crisis, governments must review their imports and rethink their approach to energy system policy and regulation. For the oil and gas industry, whilst no single company can claim to have the solution, we do have a significant role to play, working to support newly prioritised energy security objectives.

 

Russia’s invasion of Ukraine and wider economic and geopolitical factors has resulted in an energy crisis in Europe that will ripple across the globally interconnected energy market. Russia supplies 40% of the EU’s gas, and a quarter of its crude oil. Unfolding events make that dependency appear even more myopic. The entire European energy system assumes Russia will always deliver. Until recently, this mutual dependency has had no downside. The war however has resulted in countries searching for solutions to reduce the reliance on Russia.[1]

 

[1] https://www.ft.com/content/b32bf4fc-608c-46fa-944b-0b3fe8642919

Image: The Solitaire and the Normand Cutter laying the Karish Gas Sales Pipeline, managed by Technip FMC

We at Energean do not claim to have a unique solution to this crisis. We can however make a valuable contribution. At the heart of our ETHOS is a commitment to supporting energy security for the communities that host our operations. Declining investment in the hydrocarbon sector for both Greece and Italy has increased their already heavy dependency on imported Russian energy.

Roberto Cingolani, Minister for Energy Transition has made this very point: “We did reduce our domestic gas production, but we increased imports... The environmental impact was constant, and we self-damaged the economy.”[1]

We see a significant role for Energean and others across our sector, in providing the deep technical insight and market knowledge that can help deliver the marginal gains needed to relieve pressure on the European energy supply.

There is no quick fix to achieving national energy independence. A pragmatic approach must balance the acceleration of the energy transition with investment in strong domestic hydrocarbon production and storage – where those resources are available. This will provide the resilience and security to meet current and projected energy demand of broad and diverse industrial economies.

Domestic production is vital as Russian hydrocarbons cannot be replaced via the tight global LNG and pipeline markets. This has been made clear by Israel and Egypt. Likewise, the UK has announced the first new UCKS Licencing Round in two years.[2]  Whilst European economies are desperately in need of increased oil and gas supply in the short-term, suppliers will be focused on longer term contracts to de-risk upstream development.

A material enhancement of the Eastern Mediterranean energy market is a key focus for us, and our flagship Karish gas project will be important in boosting energy supply for the region, helping to drive sustainable development, competition and energy security both in Israel and the broader region. We also look forward to the results from our current drilling campaign.

As the leading independent, gas-focused E&P company in the Mediterranean, we are well placed to support with this region’s energy transition and its efforts to deliver energy security.

 

[1] https://www.ft.com/content/b32bf4fc-608c-46fa-944b-0b3fe8642919?shareType=nongift

[2] https://www.ft.com/content/3c958f6b-2f71-4a86-97eb-97c71434df1d