Energean may have recently announced the start of natural gas production from Israel's offshore Karish field, however the clouds for the hydrocarbon exploration and production company appear to be dangerously thickening.
Years of delays in gas deliveries, as well as the breach of terms in agreements with strategic “players” in the Israeli energy market have put Energean in a precarious position, with litigation and legal actions coming one after the other.
A typical example is the dispute with the Tsabar Group, which in 2015 opened the door for Energean to operate in the Karish and Tanin natural gas fields. According to the lawsuit filed by the Israeli energy group, Energean breached their agreement, having secured the exploitation rights exclusively for itself. The Tsabar Group is claiming almost €170 million in damages from Energean, while recently, the Israeli authorities rejected Energean's request not to pursue the case as unfounded. Given that Energean is listed on the London and Tel Aviv stock exchanges, a possible vindication for the Tsabar Group would bring a domino effect of negative developments for the company, at the helm of which is by Mathios Rigas.
This is not the only open front. Large companies that had signed contracts with Energean for the delivery of natural gas have been forced to buy the quantities they need from other suppliers at much higher prices. The reason? Energean's long delays in developing the Karish and Tanin deposits. The reasons invoked by the company (delay in the construction of the floating mining platform due to the coronavirus) probably did not convince the Israeli market, since companies such as Dorad, one of the largest independent power producers, claimed compensation of around €4 million from Energean. Something similar happened with the country's largest power company, Dalia Energies, which cancelled its contract with Energean, seeking the required quantities of gas from other suppliers.
New Med Energy also took the legal route, claiming that Energean breached the terms of the agreement to sell the Karish and Tanin gas fields for $148 million.
As if the above were not enough, shadows are also cast on the transparency with which Energean handles its shareholding issues, since the incomplete and delayed information provided to the investing public regarding the sale of the shares held by the US fund Third Point since 2013, raised many questions.