For the first time in its history, Israel became an oil exporter after the British Greek company Energian (LSE: ENOG; TASE: ENOG) launched the first barrels for exports to Europe from the Karish offshore field. The company’s Production Storage and Offloading unit sent Israel’s first crude shipment on Monday.
It’s hard to believe, but only a year ago, this was unthinkable due to Israel’s maritime border dispute with Lebanon. Because of the seriousness of both sides’ claims, there was a real possibility of a military conflict. However, following indirect negotiations, a US-backed agreement was reached last October that delineated the area between the Karish and the Qana gasfields. Energean began manufacturing at Karish late last year.
According to Energean, Vitol, the world’s largest independent oil trader, has agreed to market the Karish cargoes globally.
Energean has grown rapidly since its foundation in 2007. Its shares have doubled in value in the past four years.
Mathios Rigas, Energean’s CEO, was very pleased at the fact that the company helped Israel join the club of oil exporters.
For many years, Israel’s lack of domestic gas and oil production was a source of weakness, as country was boycotted by oil rich nations in the region.
However, multiple discoveries in the eastern Mediterranean’s waters over the last decade have helped reduce the nation’s reliance on imported energy commodities.
Although the majority of crude oil is still imported, Israel has become self-sufficient in natural gas. Furthermore, this has helped to improve relations with Jordan and Egypt, as export agreements have been signed with both countries.
While Karish is primarily a gas field, the success of its associated oil production is critical to Energean’s project economics.