Greece Gears Up for Hydrocarbon Search
11th March 2012
Greece has received bids from eight geological survey companies to conduct seismic exploration in the country’s western and southern seas, the Greek Ministry of Energy announced in early March. The move is seen as an attempt by Athens to finally get its hydrocarbon industry moving in light of the recent discoveries in the eastern Mediterranean.
The geological surveys are to be carried out in the Ionian Sea and in the waters south of Crete covering an area of around 220,000 square kilometers. The region is estimated to hold several hundred million barrels of hydrocarbons according to data that was previously gathered.
Greek Energy Minister George Papaconstantinou said the response to the tender had exceeded the country’s expectations. The companies that have bid for the tenders include the world’s major hydrocarbon survey firms: ION Geophysical of the US, TGS – NOPEC, Dolphin Geophysical and Petroleum Geo – Services (PGS) of Norway, CGG Veritas of France, Spec Partners, Spectrum Geo Ltd and Fugro Multiclient Services.
As many as three contracts are expected to be awarded in April and survey work is slated to begin shortly thereafter. Greece is then expected to delineate up to 15 blocks and introduce a licensing round before the end of the year.
Mr. Papaconstantinou said more tenders for onshore seismic surveys would be issued by July. Furthermore, tenders have been opened for exploration work in the areas of Patras, Katakolo and Ioannina. Greek company Energean is currently working in the Prinos oil fields in the Gulf of Kavala.
The development of its own energy resources could dent Greece’s energy costs which currently amount to €10 – 12 billion, some 5% of its gross domestic product (GDP). Greece is in the midst of a financial crisis with accumulated debt of some €350 billion. The situation has moved it to privatize its natural gas company DEPA and the gas transport and service company DEFSA.
The energy minister also said that Greece would take steps to identify its offshore exclusive economic zone (EEZ) in accordance with the UN Convention on the Law of the Sea (UNCLOS). “In no way is Greece willing to not exercise all its sovereign rights and these include EEZs. EEZs are a tool Greece intends to use, in line with its overall policy,” Mr. Papaconstantinou said in late February.
Greece plans to negotiate a maritime delimitation agreement with Albania and Italy in the Ionian Sea and with Egypt and Libya regarding the Mediterranean south of Crete. Negotiations with Turkey on the issue of the Aegean Sea territories are expected to be difficult as Ankara is not a signatory to UNCLOS. Turkey has made claims on parts of the Aegean and has expressed its opposition on numerous occasions to the creation of an EEZ in Cypriot waters and exploration work carried out there by the US company Noble Energy. In December last year, Noble announced the discovery of 5 – 8 trillion cubic feet of natural gas in Block 12, near to significant discoveries made by the company in Israeli waters.
Energy cooperation between Greece, Cyprus and Israel has grown over the last two years during the course of natural gas discoveries in the eastern Mediterranean. The three plan to sign a memorandum of understanding on energy cooperation by the end of March.
Cyprus and Israel have already taken strides towards energy cooperation in joint offshore development, with a joint LNG facility proposed for construction on the southern coast of the island. The Israel Electric Corporation (IEC) and DEH Quantum Energy, a Cypriot – Greek joint venture, in early March signed an MOU regarding a feasibility study to lay an electricity cable between the two countries. The project’s cost is estimated at €500 billion. The plan calls for the cable to eventually be extended to Crete and from there connected with Greece’s national electric grid.