Exxon inks gas deal for Mediterranean's largest unexplored offshore prospect

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Exxon Mobil (XOM [https://seekingalpha.com/symbol/XOM]) said Thursday it will partner with U.K. oil and gas explorer Energean (OTCPK:EERGF [https://seekingalpha.com/symbol/EERGF]) (OTCPK:ENOGY [https://seekingalpha.com/symbol/ENOGY]), which maintains gas fields offshore Israel, and Greece's Helleniq Energy to explore for natural gas offshore western Greece [https://www.offshore-energy.biz/greece-gearing-up-for-offshore-exploration-revival-as-exxonmobil-joins-ionian-sea-block/], in an area described as the largest unexplored offshore prospect in the Mediterranean Sea.

Under the deal, Exxon (XOM [https://seekingalpha.com/symbol/XOM]) will acquire 60% of the Blcok 2 concession, with Energean’s (OTCPK:EERGF [https://seekingalpha.com/symbol/EERGF]) (OTCPK:ENOGY [https://seekingalpha.com/symbol/ENOGY]) stake reduced to 30% from 75% and Helleniq’s to 10% from 25%, with Energean remaining the operator of the concession during the exploration stage; if a hydrocarbon discovery is made, Exxon would assume operatorship during the development stage.

"This significant exploration agreement paves the way for potential future exploratory drilling investments in the 2027 timeframe," Exxon's (XOM [https://seekingalpha.com/symbol/XOM]) VP of global exploration John Ardill said.

Exploratory drilling at Block 2 is expected to begin in late 2026 or early 2027, provided all required approvals and permits are obtained; Exxon (XOM [https://seekingalpha.com/symbol/XOM]) expects the first gas from the project in the early 2030s.

Greece produces only small volumes of oil and relies on gas imports, but it is eager to explore for gas and bolster its role as a transit route for Europe.

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