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In London, Greece Promotes New Offshore Hydrocarbons Investment Potential

By Chris Deliso 

As it tries to promote economic growth following an extended economic depression, the Greek government is looking to the country’s untapped offshore hydrocarbons reserves to attract foreign multinational energy companies, and other relevant industries. A high-profile and well-attended event at London’s Hellenic Centre on July 1-2 most recently gave the government an opportunity to highlight the new opportunities in this sector.

A comprehensive report on the relevant offshore and onshore potential hydrocarbons reserves in Epiros, the Ionian Sea and the Libyan Sea south of Crete appeared in May on In the analysis, author Ioannis Michaletos presented anticipated figures, locations and potential investors involved, as well as the schedule of bid announcements, along with notes on political and social factors affecting further oil exploitation. The report built on previous predictions now verified from, in an article published in December 2010.

Event Proceedings

The July gathering in London constituted an official pre-launch event for the upcoming Offshore Licensing Round 2014 for new hydrocarbon blocks in the Ionian Sea and the Libyan Sea, south of Crete.  Sponsored by Norway’s Petroleum Geo-Services (PGS), which has conducted undersea surveying of the blocks in question for the past two years, the event brought together more than 180 people from oil companies, service companies, law firms and funds. Among these were 34 international oil companies (seven of them majors).

In addition to presentations by PGS on the geology, and an oil potential report by Beicip Franlab, the event allowed for numerous private meetings between representatives of these companies, interested attendees and Greek energy officials. The Greek ministry has confirmed that it will submit a call for tenders to the EU Gazette in the next few days. The next step in the bidding process should then take place in mid-September.

The pre-launch event, organized by the Greek Ministry of Environment, Energy and Climate Change, and the Greek Embassy in London, also featured prominent Greek officials and experts. Constantinos Bikas, the Greek ambassador in London, provided opening remarks and was followed by the minister, Yiannis Maniatis. The legal and regulatory issues regarding the offshore blocks and licensing was next discussed in a presentation by Dr Sofia Stamataki, the president of the Hellenic Hydrocarbons Resources Management SA (HHRM) and also the director of the Laboratory of Applied Geophysics at the National Technical University of Athens.

Following these presentations, potential investors were treated to in-depth presentations that got to the heart of the issue – the results of offshore block surveying and geological factors – from PGS’ Sales and Marketing Manager Øystein Lie and Beicip-Franlab’s Veronique Carayon and Bernard Colletta, respectively.

Mr Lie’s presentation disclosed the general results of PGS’ two-year survey, which includes over 32,000 sq km of 2D data (12,500 sq km of new data, plus 9,000 sq km of reprocessed data and 9,000 sq km of reconstituted data), data which “showed characteristic lines with their corresponding geological cross sections in areas such as west of Corfu and south of Crete,” according to a ministry press release. The French experts meanwhile presented the results of the interpretation of the survey, plays, oil potential and the methodology followed.

Greek National Energy Strategy- Matching EU Energy Strategy on Diversification

In his keynote speech, Minister Maniatis deemed the pre-launch event “a historic day” for Greece’s hydrocarbons development. With the anticipated projects,Greece is upgrading “its geopolitical role in the wider region of the Eastern Mediterranean and South-East Europe,” said the minister, noting that this will benefit energy security in the European Union.

Indeed, said Minister Maniatis, “this national effort is at the heart of European strategy for developing indigenous resources, diversifying resources and their routes and upgrading the energy infrastructure. With perseverance, transparency, efficiency and consistency in time schedules, the Government has claimed and won an important vote of confidence today for Greece. In this national effort we should be and we are all united,” he concluded.

A large part of the government’s goal is, like any government in the same situation, to play up the potential undersea oil reserves to gain attention. However, considering the as-yet-unproven nature of the finds and difficult geological conditions of at least some of the blocks, could they be too optimistic?

“In general, geologists over-estimate reserves/resources with a view to engage investments,” says Slav Slavov, Regional Manager for Europe & Central Asia at the UN-accredited World Energy Council, an organization based in Geneva. Geologists also tend to hope “that with the energy price increases, a great share of today`s resources will become exploitable reserves tomorrow,” says Mr Slavov for

At the same time, the WEC expert agrees with Minister Maniatis’ stated objective here, telling that “there is no doubt that any potential exploitation will provide not only diversification of routes but also diversification of supply sources.” Generally, but particularly since the Russian annexation of Crimea this spring, the word ‘diversification’ has been repeated by EU officials, not to mention the US government. Greece, which is strategically located in the Eastern Mediterranean between Italy, the Balkans, Turkey and the MENA, hopes that it can play a leading role in the EU’s diversification strategy. With the east-west TAP pipeline projected to open by 2019, and north-south interconnectors to Bulgaria and Albania, Greece sees offshore hydrocarbon development as an addition to its existing energy policy as both a producer and energy corridor.

A New Focus on Epiros

The offshore hydrocarbon potential targets spread through an area of over 225,000 sq km, ranging from north of Corfu in the Ionian Sea to the Libyan Sea south of Crete. Incidentally, along with the Ionian Sea’s offshore deposits (and some potential onshore areas inland) the ‘Epiros Riviera’ looks set for further tourism development, as Russian and Arab investors are tipped to open new hotels in years ahead. The Emir of Qatar famously purchased several private islands off the Epiros coast in recent years, and maintains logistics support for his enterprises from the expanding Epiros port of Preveza, which has also sought to attract more foreign yachtsmen by making the central one of its several ports free to dock in.

The cumulative result is hoped to be an economic boost for what has historically been one of the poorer regions of Greece. The Greek government, with heavy support from the EU, took the first major step towards integrating this mountainous and relatively isolated region with the creation of the Egnatia Odos highway several years ago, an engineering marvel that connects the Ionian Sea with Turkey across the provinces of Epiros, Macedonia and Thrace, substantially reducing driving times and access to the former.

There is another factor potentially playing a role in oil deposits in northern Epiros and the northern Ionian; their proximity to a foreign border, in this case, Albania. Oil deposits straddling borders have led and continue to lead to disputes between nations, and some politics experts point to nationalist anger among some political actors in Albania over this specific issue as a harbinger of possible bilateral disputes. In recent years, oil majors have brought in ‘consultants’ with perceived political clout, such as former British officials, to extend their influence in Tirana, though the results of such overtures are rarely publicized.

Nevertheless, energy experts like Mr. Slavov do not see cross-border energy disputes in the Ionian Sea and Epiros as a major area for concern. “I do not believe that there would be any dispute problems with neighbors,” he says for “Albania is very cooperative and involved in common projects with Greece, for example TAP,” the World Energy Council official notes, adding that elsewhere in the region “Greece has gas interconnections with Bulgaria, and Bulgaria wants to import (potentially) gas through Greece.”

Future Potential and Analytical Guidelines

All of the foregoing attests that Greece does have untapped potential in the offshore hydrocarbons field, though only time will tell to what extent the country can woo foreign investors. Numerous factors beyond the perceived difficulty of exploration, exist that will affect decision-making, such as market conditions, politics and policy-making, and the security concerns companies and governments are currently facing in a wide swath of territory – from the Black Sea to Iraq and the Middle East – where volatile and fluid security situations are altering conditions in the energy game.

Thus while the hard work of undersea research and creation of a legal framework has been done, Greek officials will also have to monitor and evaluate a whole range of other, rapidly-changing factors that affect the decision-making of corporate executives and feasibility of exploration projects. In this light, analysts will want to keep a close eye over the next few months on the relative volume of data acquisition and interest of companies in bidding. From September, the picture will become somewhat clearer, but the process will still be a long-term one.

Analysts and other interested parties will be watching keenly in coming months to see the tenor of progress on the Greek bids. Timur Topalgoekceli, an energy analyst at the Directorate of Global Energy Economics at the International Energy Agency, indicates what kind of corporate behavior analysts should look out for.

“Companies are expected to submit bids already (before the set deadline), but before that time they will start analyzing geological data and make an assessment of the business environment (regulation, taxes, upfront commitments, local content requirements),” he says for

But how will observers be able to tell just how much interest potential investors have? “An indication about how serious they are would be to see if they are putting a team together (technical experts and business development) in order to assess the opportunities, in which case you would see an increase in visits to regulators or license issuers,” notes Mr Topalgoekceli. “Also, sometimes it is required to register interest to participate in the licensing round, and get access to the data (purchasing,” adds the analysts. “The data comes at a small cost but gives an indication about whether or not companies are considering it at all.”

All things considered, therefore, it seems clear that government and corporate interests alike will be watching the situation closely, as Greece attempts to diversify and increase its energy supply and get back on the road to economic recovery.