Energean suspends Israeli offshore operations on government security order
Energean has suspended production at its Karish field and placed the Energean Power FPSO on standby after the Israeli government ordered a temporary halt to offshore gas operations for security reasons amid regional tensions.
The company is incurring standby costs of approximately $10 million per month while the facilities remain shut-in. The move also threatens the timeline for its $1.2-billion Katlan development, with first gas now at risk if the suspension extends beyond May.
As reported by Reuters, Energean CEO Mathios Rigas said the suspension was “entirely dictated by government security decisions” following US-Israeli strikes on Iran that triggered wider conflict across the Gulf. Company officials say they are complying with the directives but remain in ongoing dialogue with the Ministry of Energy to restart as soon as security conditions allow.
Rigas has described the lost production as “deferred revenue” rather than a permanent loss. He noted the company holds more than $300 million in liquidity to weather the period. Before the shutdown, Energean was producing around 15,000 barrels per day of oil alongside gas; following planned facility upgrades, output is expected to reach 20,000 b/d upon restart.
The planned May milestone for the Katlan project (also known as Orca/Olympus) — a phased subsea tieback of gas discoveries made in 2022 to the existing Energean Power FPSO — is now at risk if the halt is prolonged. First gas from Katlan is still targeted for the first half of 2027, though that could slip depending on how long the shutdown lasts.
Katlan is designed to extend the life and output of the FPSO with low-royalty gas, adding meaningful new volumes without requiring major new surface infrastructure. The company views any delay as recoverable once operations resume.
About the Author
Bruce Beaubouef
Managing Editor
Bruce Beaubouef is Managing Editor for Offshore magazine. In that capacity, he plans and oversees content for the magazine; writes features on technologies and trends for the magazine; writes news updates for the website; creates and moderates topical webinars; and creates videos that focus on offshore oil and gas and renewable energies. Beaubouef has been in the oil and gas trade media for 25 years, starting out as Editor of Hart’s Pipeline Digest in 1998. From there, he went on to serve as Associate Editor for Pipe Line and Gas Industry for Gulf Publishing for four years before rejoining Hart Publications as Editor of PipeLine and Gas Technology in 2003. He joined Offshore magazine as Managing Editor in 2010, at that time owned by PennWell Corp. Beaubouef earned his Ph.D. at the University of Houston in 1997, and his dissertation was published in book form by Texas A&M University Press in September 2007 as The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005.