Balkanalysis.com

By Ioannis Michaletos in Athens*

The energy sector in Greece is currently one of the key areas of the economy in which both the state and the private sector are planning investments, in spite of the country’s debt crisis and the consequential economic recession.

In the following Balkanalysis.com special business report we outline the main trends marking Greek energy planning today, including a focus on the key players and projects, along with some of the larger international aspects of these projects.

Regional Potential

Greece’s strong energy focus is largely due to the fundamentals of the mid- and long-term prospects of the Balkan region. This region is projected to have an annual 4-5% increase in energy consumption from 2012, for the next 30 years or so.

Coupled with the expanding Turkish economy of some 70 million consumers in need of massive electricity consumption, and the still underdeveloped market of Ukraine (more than 50 million people), it seems that the Greek energy planning outlined below is inexorably related to the promising Southeastern European energy demand on a multi-national level.

Renewable Energy Resources

In 2010, the number of solar energy installations in Greece tripled. It is projected that in 2011 some 200 MW of photovoltaic systems are going to become operational, in addition to 300 MW of wind parks.

In parallel, the Greek state has announced four international competitions for exploitation of the domestic geothermal energy resources (projects worth approximately 350 million euros) that are going to be completed by early 2012. At the same time, two small islands in the Aegean, Agios Efstratios and Lipsi, have already been announced as “green islands” due to their 100% use of renewable energy resources for local energy production. The state has plans to include dozens of other islands and mainland communities in similar projects in the coming years.

Furthermore, the Greek Ministry for Energy is managing a nationwide project to install 60,000 “smart electricity meters” for large-consumption users and 160,000 smart meters for low volume ones, under a joint program with the EU. This opens a new market for the industries that will supply these systems, which are spreading at a rapid rate across Europe.

Disengagement from Oil Consumption and Imports

Greece meets 55% of its domestic energy with oil; some 99% of it is imported, mainly from Saudi Arabia, Russia, Libya, Iran and Algeria. Greece currently pays around 5% of its GDP (estimated according to current world barrel prices). For the energy needs of its islands in the Aegean alone, Greece pays more than 500 million euros a year for oil consumption, in order to produce electricity at local power plants.

For this reason, the Greek state has unveiled a series of upgrades of the electricity networks connecting the mainland with the islands- a 365-million-euro investment. The new plants and installations on the mainland will thus be able to supply much greater volumes of electricity in the islands, thus reducing to a large extent the need for oil consumption.

In broad figures, the total investment need for this upgrade may be up to 3 billion euros through 2020. This cost will largely be covered by the EU and through investment loans by the EBRD, along with state subsidies and private investments.

An Oil Licensing Agency to Be Established?

By mid-2011, voting in parliament will happen for a law that would establish a new state agency; this body would be responsible for disbursing research and exploration licenses for oil in Greece.

Sources from within the Greek state energy circles note for Balkanalysis.com that, in their estimation, the potential hydrocarbon wealth that can be exploited reaches up to 500 million barrels- equivalent in today’s prices to over $50 billion. For the moment, a Greek company, Energean, produces around 8,000 barrels of oil from an offshore field in Northern Greece, and there are another four fields in a close range of short-term attention.

Natural Gas Expansion Trends

The national gas company DEPA is 65% controlled by the state with the rest of the shares belonging to the semi-state oil company ELPE (Hellenic Petroleum). The Greek government will privatize some 35-40% of the shares to a private strategic investor.

Throughout 2011, three more regional gas companies, 100% owned by DEPA, will become operational in Thrace, Macedonia and Central Greece peripheries in order to increase penetration of gas consumption in the country. Thereafter, strategic investors from abroad will be sought for these as well.

Regarding international natural gas projects, Greece and Azerbaijan recently signed a gas supply deal in mid-March, in which Greece will import directly 700 million cbm of gas. The culmination of the ITGI pipeline connecting Azeri gas to Italy through Greece and Turkey is proceeding too, with a timetable to be concluded by 2014, and for this pipeline to become the so-called “Southern Corridor” for the EU.

Greece is also cooperating with Bulgaria for the IGB pipeline that will carry gas to Haskovo from Greece; it will be used as a supplementary supply route for Bulgaria and, to a second investment degree, for Romania as well, should the plan deliver and mature over the next decade.

The IGB planning is related to the proposed creation by private Greek companies of a natural gas depot in the region near Kavala in eastern Macedonia. This 300-million-euro investment aims to secure quantities of approximately 500 million cbm of gas, to be used as a regional Balkan strategic reserve.

For the moment, this proposal is under review by the Ministry of Energy’s special committee and the governmental authorities dealing with the legal aspects of the case, since there is an entanglement of certain technicalities and bureaucratic obstacles regarding this investment.

Another major project is the South Stream one, where the main driving forces are Gazprom along with Italian, French and German companies.

Here, DEPA has already formed a joint venture with Gazprom relating to the Greek portion of the proposed pipeline. It aims to carry some 30 billion cbm to Italy through Bulgaria and Greece (its southern axis) and through Bulgaria-Serbia-Croatia-Slovenia (its northern axis).

Greek Energy Strategy Today: The Three Imperatives

At present, Greek energy planning seems to be following three general trends, which are in accord with larger EU-level policies and trends: an increase and diversification in renewable energy resources; the reduction of oil imports and exploitation of local hydrocarbon resources, and the increase in natural gas consumption and imports.

This process will significantly alter the country’s present energy status and will require substantial amounts of investments, along with importation of know-how and a whole array of supplementary services for the next generation. But the cost and effort will be worth it, if it can cumulatively guarantee a larger degree of energy independence and sustainability for Greece.

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Balkanalysis.com Research Service– The Western military offensive against the Libyan government of Moammar Gaddafi has been officially handed over to NATO and allied countries such as Greece are playing a key, if less visible role.

The NATO Mediterranean headquarters in Naples, Italy is overseeing Operation “Unified Protector,” under the command of Canadian Lt. Gen. Charles Bouchard. Other bases including one in Izmir, Turkey. But the Greek island of Crete – which sits opposite Libya – is strategically more important.

NATO’s naval operations base at Souda Bay, in the northwestern prefecture of Chania, has long been considered the most important base for air and nautical operations in the Eastern Mediterranean. Even in ‘peaceful times,’ the base sees much activity.

Along with the large Greek air and nava base at this protected, deep bay, an American NATO base and a NATO maritime interdiction center (among other specialized NATO schools) are located.

Currently, seven Greek airfields (including Souda) are being used for the Libya operation, hosting more than 40 fighter jets from the USA, France, Belgium, UAE, Qatar, Denmark and soon other allied states. Another four Greek jets, one frigate, two or three smaller ships and two rescue helicopters are being employed.

Radar bases in Crete are on full alert, as are the anti-aircraft and anti-ballistic systems, due to the perceived fear of retaliation by Libya with its Scud -C missiles. However, the military believes that such possibilities are slim, as the radius and ability of these missiles is the subject of dispute- it is not sure if they could even reach Crete, should Libyan forces try to use them.

Further north, Belgian F-16′s together with Greek ones have recently conducted exercises in the southwestern Peloponnese. The bomb-targeting exercises were held in the Karavia training grounds, and simulated bombing of military installations in Libya.

Currently, every military center  in Crete and the Peloponnese is on high alert, while the crisis center in the Ministry of Defense in Athens has been activated over the past 14 days.

NATO has announced that the operation in Libya may last for up to 90 days, though this is subject to change. This operation is coming at a very difficult time for Greece, which faces considerable public discord over budget austerity measures. For the Libya operation, Greece must spend approximately 4 million euros per day.

A small number of Libyans live and work in Greece, primarily in Athens, and the majority of them have voiced anti-Gadaffi sentiment, even holding demonstrations outside the Libyan embassy in the capital.

Greek security planners are preparing for other risks that could accompany a protracted conflict, including refugee crises, arms smuggling and other forms of organized crime. Colonel Gaddafi’s influential, Western-educated second son,  Saif Al-Islam recently told the French Television Arte that Libya could become a “second Somalia,” afflicting the Mediterranean with the scourge of piracy and bringing more opportunities for terrorists to attack European targets.

–END REPORT–

By Ioannis Michaletos in Athens

Currently, Greece imports more than 70 percent of its energy needs. The country’s only reliable domestic energy source is lignite, which accounts for some 70 percent of its internal electricity production.

Plans for solar and wind power are expected to draw investments worth 5 billion euros by 2020, according to information provided by the Ministry of Development. Foreign companies that specialize in this field – most of them, from Germany – have already set up local offices in order to take advantage of the new market that is to be created.

Overall, 7 percent of the country’s energy needs could be sustained over the next decade by solar energy, though over the next few decades this percentage might exceed 30 percent due to Greece’s ample year-round sunshine, which in the southern regions of the country exceeds 3,000 hours a year.

Wind energy can fulfill another 15 percent, and wind parks are being constructed in various suitable locations. If one adds biofuel, geothermic, and wave energy, Greece has the ability to become a fully independent energy producer by the middle of the 21st century, freeing itself from the constraints of energy imports and helping itself to withstand the perils of desertification and environmental degradation.

The oil factor is a very important one too, since it represents some 55 percent of Greece’s yearly energy consumption and is imported, barring some minimum amounts being produced in the Kavala offshore oil field in northern Greece. Natural gas is a quickly expanding commodity, but for the time being its contribution to Greece’s energy total is a mere 9 percent.

Finally, the ongoing economic recession in Greece has decreased electricity consumption by around 4%, thus causing plans for the creation of new plants to be stalled.

At the present time, those companies driving developments on the Greek energy scene most strongly include the following major energy players.

Hellenic Petroleum  (ELPE)

Hellenic Petroleum is one of the leading energy company in Southeastern Europe, and one of the largest industrial and commercial companies in Greece.

ELPE’s main current business activities comprise refining and marketing of petroleum products (R&M), petrochemicals and natural gas, while the company is also in the stage of developing an exploration and production of hydrocarbons (E&P) international portfolio. Hellenic Petroleum also operates the first private CCGT power generation plant in Greece.

The company owns and operates three of the four refineries in Greece and covers 73% of local demand for oil products. Hellenic Petroleum also covers 28% of the retail petroleum products consumption in Greece, being present in more than 1,400 retail stations throughout the country and operating a strong network of LPG, industrial, aviation, marine and lubricants sales.

Hellenic Petroleum further has a strong position in seven countries. It operates the OKTA refinery outside of Skopje, and it has a presence in Cyprus, Serbia, Montenegro, Bulgaria, Albania and further afield, in Georgia.

Further, the corporation is the sole petrochemicals producer in Greece with market shares higher than 50% in all the products it produces or trades in this sector. The key products are polypropylene, BOPP film, PVC, aliphatic solvents and inorganic. The polypropylene production is considered as one of the top of its kind in Europe and the bulk of the commodity is exported globally.

Moreover, it has a 35% stake in the Greek Public Natural Gas company (DEPA) which owns and operates the domestic high and medium pressure natural gas pipeline’s grid.

The company is in the stage of developing an international E&P portfolio, and currently has exploration interests in Greece, Egypt, Albania and Montenegro. Other projects at hand include a 1.5 billion euro investment in its facilities, in order to boost productivity and the ‘environmental friendliness’ of its products.

Hellenic Petroleum also owns and operates the first private CCGT power generation plant in Greece, Thessaloniki, with a capacity of 390 MW. (The plant commenced operations on December 24, 2005). The fixed investment for this plant amounted to 250 million euros.

The main shareholders in this plant are the Greek state (35.48%), Paneuropean Oil and Industrial Holdings S.A.; some 41.25% of this venture is owned by Greek tycoon Spyros Latsis, while the remainder (23.27%) is floated on the Athens Stock Exchange.

For the year ending December 31, 2010, Hellenic Petroleum Group posted net sales of 14,557 billion euros, with total assets of 4,191 billion euros and EBITDA of 474 million euros. The company has 5,200 employees.

Greek Power Corporation (DEI)

The Greek Power Corporation (DEI) is the largest electric power company in Greece. The state currently owns 51% of its shares, and it produces and supplies electricity to all the country.

The DEI facilitates Greece’s energy efficiency through several vast projects. The 34 major thermal and hydroelectric power plants and the 3 aeolic parks of the interconnected power grid of the mainland, as well as the 60 autonomous power plants located on Crete, Rhodes and other Greek islands (33 thermal, 2 hydroelectric, 18 aeolic and 5 photovoltaic parks) form DEI’s industrial complex, and constitute the energy basis of all financial activities of the country.

The total installed capacity of DEI’s 98 power plants is currently 12,760 MW with a net generation of 53.09 TWh.

There are five current major developments going on under DEI’s initiative. They include: an 800MW natural-gas fired unit to be installed in Megalopolis; a 450MW lignite-fired unit to be installed in Meliti; a 450MW lignite-fired unit using fluidized bed technology, to be installed in Kozani-Ptolemaida; a 700-800MW hard-coal-fired unit to be installed in Aliveri, and a 700-800MW hard-coal-fired unit to be installed in Larymna.

Moreover, DEI is now developing a project to introduce natural gas into the island of Crete following a development agreed with DESFA S.A. (Hellenic Gas Transmission System Operator), for the creation of an LNG terminal in Korakia and gas pipeline infrastructure. The DEI will build 2X250MW combined cycle units near the terminal, and will transfer there three existing GTs from the Linoperamata Power Station. The aforementioned investment program is estimated at more than 4 billion euros.

Finally, in 2007 DEI decided to divide its renewable energy production from its core business. It is assumed that this move will facilitate the company’s strategy of expanding into the lucrative and environmentally-friendly fields of wind, solar and alternative energy production.

Already, the company’s current business plan dictates the production of 1540MW from renewable energy sources by 2014, with a total budget of 1.6 billion euros. The capital will be sourced by the parent DEI Company and private funding.

In this regard, one key development came when the DEI Renewable Resources Company signed an agreement with the French EDF Energies Nouvelles for the construction of wind parks, with a power capacity of 122MW, and another with the Greek ETBA Bank for solar parks of 35MW. The EDF is aiming at securing deals for an infrastructure of over 1,000 wind parks in Greece over the next decade.

DEI Renewables currently has as a strategy to acquire at least 25% of the market share by 2012, while it already has almost 10% of the market, with 100MW of operating energy production. The list of such infrastructure already operating includes 23 wind parks, 5 photovoltaic stations and 9 small hydro electrical plants.

In the first 9 months of 2010, DEI registered net sales of 4,467 billion euros, EBITDA of 1,223 billion euros, and also invested 694 million euros in infrastructure projects.

DEPA

DEPA is the largest natural gas corporation in Greece. It is 65% owned by the state, with the remainder controlled by the Hellenic Petroleum Group. (Some 35% of the state’s shares are also optioned by DEI).

Recent notable developments with DEPA include the upgrade – with a 130 million euro investment – of its LNG facilities in Revythousa, where the bulk of the gas from Algeria is imported and refined. Approximately some 20% of the gas imported comes from Algeria, while the rest from Russia and Azerbaijan.

It is estimated that for 2010 DEPA’s client demand remained steady, allowing an approximation of at least 4 billion cubic meters of gas required annually from the company.

Finally a deal signed between the Russian Gazprom and the Italian ENI in 2007 regarding the “South Stream” project (should it is completed by 2015) foresees the transfer of some 30 billion cubic meters of gas per annum through Greek territory and into Italy. Present information reveals that the storage of some of the above will be in DEPA-owned facilities in Northern Greece, and used for exports.

Finally, DEPA is participating in the ITGI project that involves the transfer of Azeri gas to Italy through Turkey and Greece; it has already formed a 50-50 company with the Italian EDISON, while it also participates with the same company in the IGB pipeline going from Northern Greece to Bulgaria.

DEPA also owns 100% of DESFA, Greece’s natural gas company that operates the domestic network system. For 2009, the last year for which total figures are available, DEPA registered net sales of 980 million euros and EBITDA of 149 million euros.

Motor Oil

Motor Oil owns the second-largest oil refinery in Greece and the second-largest network of gas stations, along with a host of other energy-related businesses. It employs in its production facility 1,300 personnel, and has invested around 1 billion euros over the past 8 years. The company maintains business interests in Egypt, Saudi Arabia and Yemen. Its refinery has 9 million metric tons of oil refinery capacity per annum.

Currently, 51.5% of Motor Oil is owned by Petroventure Holdings Limited, which belongs to the prominent Greek business family of Vardinoyannis. For 2009, it had net sales of around 4 billion euros, and EBITDA of 215 million euros.  Currently, a 285-million euro investment plan is being developed for the construction of 436MW natural gas power plant, along with the Mytilineos group in the region of Korinthos.

Mytilineos Group

The Mytilineos group S.A. is an industrial conglomerate founded in Greece in 1990, and listed on the Athens Stock Exchange. Its consolidated turnover amounts to about 1 billion euros, and it employs more than 3,000 employees, both in Greece and abroad.

The group maintains a presence in Greece, Romania, Turkey, Syria and Pakistan. In 2008, it formed a joint venture agreement with Motor Oil Hellas S.A. for the joint construction, operation and exploitation of natural gas-fired power plants with an output capacity of more than 800 MW within the Motor Oil facilities in Ag. Theodori (Corinth).

The company’s activities include construction, development and operation of thermal power plants and renewable energy sources (wind, hydropower and photovoltaic parks), and trading in electrical power and CO2 emissions, as well as LNG trading.

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By Ioannis Michaletos in Athens

(The second in an occasional series of Balkanalysis.com business intelligence reports).

Over the past year, the Greek state has been battered by an unprecedented debt crisis, resulting in a widespread economic downturn in the domestic commercial and service sectors.

According to the latest figures issued by the Greek statistics service, GDP for the last quarter of 2010 was -4.7% and similar figures are expected for 2011, before an eventual growth period. The latter is only estimated to be reached sometime between late 2012 and early 2013, however.

A Prescient Analysis: Greek Shipbuilding Investment

Amidst this gloomy economic news, however, what should also be considered is the dynamic of the shipping sector in Greece, which boasts the world’s largest merchant fleet, and which operates globally. Greek shipping interests today are benefiting from the general increase in global trade, and particularly in the growth of new emerging powers like China and India.

In the present day, some 1,200 shipping companies are located in Athens’ port of Piraeus, the main port of Greece and one of the largest in the eastern Mediterranean. It is estimated that more than 250,000 persons depend on shipping activities in Greece, directly or indirectly, and that the industry annually generates more than $33 billion. Shipping has thus greatly assisted keeping the economy afloat in a country that suffers from increased de-industrialization, high unemployment and tightening austerity measures.

In 2009 the Greek-owned fleet measured 2.974 vessels (More than 1,000 gross tons), which accounted for 14.18% of the global merchant fleet. In terms of capacity, this amounted to 173.54 millions of dwt.

By the end of December 2009, some 748 ships had been ordered over the course of the year by Greek companies; these vessels had a total capacity of 64.9 million dwt. Interestingly, Greek maritime companies traditionally have tended to invest in new ship-building during times of global recession, so as to receive their orders just in time for the anticipated economic upturn to materialize.

In a late 2005 article by the present author for Balkanalysis.com, it was noted that “It is widely assumed that the ‘righteous circle’ of shipping will end around 2010… the assumption that the cycle will be completed in a few years means literally that the analysts have predicted a slowdown of world trade. By closely monitoring the shipping industry, very illuminating highlights can be made regarding wider economic and political affairs.”

The above example illustrates two things: firstly, that the Greek shipping interests had already predicted the slowdown, and the coming 2008-09 global crisis; and secondly, that Balkanalysis.com had at that time pinpointed an important aspect of Greek maritime sector affairs, in the larger global business context, through continuous monitoring of relevant business intelligence.

A High-Risk Business

The importance and the vital role of business-related intelligence is of outmost importance when dealing with a globalized sector such as maritime trade and only a broad and comprehensive assessment could provide results, especially in terms of pointing out the exact cycles of growth and decrease.

Back in early 2010, the Greek merchant sector, due to its continuous building programs, managed to maintain a fleet in which the average vessel is 11.6 years old on average, compared to the global average of thirteen-year-old ships. This difference translates into better chartering deals worldwide, and lower insurance premiums. Simply put, newer ships have more advantages and a newer fleet is considered to be a big plus.

Therefore, the correct interpretation of global trade trends can be illustrated to a great extent by analyzing investment moves made by the Greek shipping companies as related to fleet upgrades, since they traditionally have been able to properly estimate the up and downs of the global system, and in the process have also attempted to extract as much advantage as possible from this estimating.

Thus, Greek shipping interests tend to sell when prices are high, when the economy seems to be doing fine, and to invest in ship-building when others have quit the business or have chosen to sell. It’s a high-risk game in which the ones that remain cool and industrious can look to multi-billion-euro potential profits, in terms of the decades ahead or, in some cases, just a few years.

2011: An Anticipated Upswing

A recent report released by the United Nations Conference on Trade and Development (UNCTAD), entitled Review of Maritime Transport 2010, has revealed that the previous years of investments and programming by Greek companies  has, as expected, started bearing fruit. 2011 is predicted to be a more dynamic year, and this will greatly benefit the ailing Greek economy. More specifically, the UNCTAD report estimated that the total capacity of the Greek-owned fleet has reached 3,150 vessels, totalling 186,095 million dwt.

In mid-2010, some 15.96% of the global merchant fleet was recorded as being owned by Greeks, a considerable increase over the previous years characterized by global recession. Now, however, a new global upturn has begun- one that is likely to fill the coffers of the trading and transport companies.

After Greece, Japan follows as the second major global shipping power, with China in third place and Germany fourth. It is quite interesting that Greece thus figures higher than these superpowers of industry, trade and export, despite having a population of only 11.3 million people and a limited trade presence, even in the peripheries of Europe.

China is the key factor that explains the virility of the global shipping trade even in times of recession. For example, in 2009, Western Europe witnessed a 38.2% drop in imports of iron ore, whereas China saw a 38.9% increase over the same period. It thus appears that the world was saved from a 1931-style depression at the last moment, due to the dynamics of the Chinese economy along with those of India, Brazil and other emerging economic players.

Greek shipping companies have operated in such countries for decades, and have cleverly made use of their traditional advantages soon enough so as to avoid the recession. It is likely that this saved the Greek economy from collapse in 2010, when the country accepted IMF patronage after the series of public blunders and governmental mismanagement that brought Athens to such a delicate situation.

In 2010, according to research conducted by the Ν. Cotzias Shipping Consultants company, Greek companies invested $9.3 billion, and bought 325 vessels, having a total capacity of 22.8 million dwt. Of those ships, 82 were oil tankers (most of them of the VLCC type), a move that signals confidence that the oil trade will flourish in the coming years and in parallel that the oil prices will inevitably increase and break the $100 barrier.

In total in 2010, ship transactions totalled $30.9 billion, meaning that Greek ship-owners bought almost 33% of the available ships for sale, with the Chinese having a 9% share and the Japanese a 16% share. Therefore, Greeks bought more ships in terms of value than both the Chinese and Japanese companies combined during 2010- a clear signal of overall confidence from Greek ship-owners that global trade is soon to boom, and that they should therefore seek to acquire vessels in order to meet demand before their gigantic competitors.

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By Ioannis Michaletos in Athens

Editor’s note: On 3 December, Greece’s energy ministry announced the creation of a public group to be concerned specifically with hydrocarbons research. The announcement coincided with related developments in the sector, disclosed below, that indicate the growing importance of this sector for Greek authorities and industry alike.

The Greek energy firm Energean Oil & Gas, formerly known as the “Aegean Energy Company,” is expanding its investment in oil exploration projects in Greece’s developing offshore fields.

In early December 2010, drilling equipment will arrive in the Prinos offshore oil field, while existing production at the “Epsilon field” will be stabilized. Further, new drilling will begin during a second stage- the company discovered (through its previous exploration assessments) that significant recoverable amounts of oil exist there. The current investment planning is estimated at around 20 million euros. Cumulatively, the company’s five-year investment plan exceeds 200 million euros.

During 2009, Energean successfully completed two offshore extended reach wells in the Gulf of Kavala, bringing on stream the Prinos North and Epsilon fields. This resulted in a significant increase of production rates, to 5,000 barrels of oil per day from 1,000 one year earlier.

In addition, the Greek Ministry of Energy recently approved the acquisition by Aegean Energy of a 70% interest in the Sea of Thrace offshore concession license. This offshore field, located in the northeastern Aegean near Turkey, comprises an area covering a total of 1,600 square kilometers. Further, in 2009 Energean also acquired a 2,000km 2D Seismic survey for offshore Greece identifying new potential exploration targets, currently being evaluated. This seismic survey is a geological research product and it shows the indications for hydrocarbon reserves in the specified area.

At the same time, the company is also investing in Egyptian offshore drilling through its subsidiary, Aegean Energy (Egypt) Limited. Through it, the company has received from Egypt’s Ministry of Petroleum the Deed of Assignment for the transfer to it of a 60% net interest in the West Kom Ombo (WKO) Block from Groundstar Resources.

A further 20% is expected to be approved through a series of transactions resulting in a final holding of 80% for Energean Oil & Gas; moreover, it will be the operator of the Block, with Groundstar retaining a 10% net carried interest.

Over the past few weeks, the Egyptian authorities have granted all of the necessary approvals. The company has also scheduled a series of infrastructure projects in WKO.

The contract for drilling has been awarded to the Sino Tharwa Drilling Company, while the American Halliburton Company will take care of the project management for drilling. Previous findings by Canada’s Gustavson Associates estimate that recoverable oil in WKO should amount to approximately 570 million barrels.

The estimate by both the company and by Greek energy analysts is that the Prinos “Epsilon” field has approximately 50 million barrels and 17,000 -20,000 barrels per day could be produced over the next couple of years.  A more interesting aspect is the overall potential of all known offshore fields in Greece. Recent scientific and economic conferences have presented figures of approximately 22 billion barrels in the Ionian Sea (off the coast of western Greece) and some 4 billion barrels in the northern Aegean Sea. Of the aforementioned, 10% could be exploited and have a financially viable business plan.

Other Greek regions, such as the southern Aegean Sea and the Cretan Sea have yet to be studied. The now defunct Greek national council for energy policy, in an official report published on 25 May 2008, stated that “production from the oil fields in the Northern Aegean could reach 200,000 barrels per day… Greece is one of the least explored countries in Europe regarding its hydrocarbon potentials.”

Exploitation in Sight

A development that illustrates the government’s desire to proceed in the exploitation of these oil reserves is the creation, in due course, of an organization that will manage the research and exploitation activities. It would also be responsible for attracting prospective investors. The region involved has a total surface area of around 62,000 sq. km (32,447 sq. km land, and 28,250 sq. km of sea) that were determined in late 2007.

A very reliable source in the Ministry of Industry and Development in Athens stated for Balkanalysis.com that this new organization “will be formed as a public company, with the state having 100% of the shares initially,” adding that “the most likely date for its establishment is in the coming months.”

It is interesting to mention here the 2008 findings of Greek professor Antonis Foskolos, and an associate in the Canadian geological service that believes in prior forecasts of his- namely, that “the region has the potential for up to 2 billion barrels of oil.” The region discussed is not related to the seabed and EEZ confrontation between Greece & Turkey, an issue of importance for the Aegean Sea.

The former Minister of Industry in Greece, Mr. Evangelos Kouloumbis has believed and publicly stated ever since the 1990’s the Greece has significant opportunities in this respect. He recently stated for the newspaper Ethnos that Greece can cover “50% its needs with the oil to be found in offshore fields in the Aegean Sea, and the only obstacle to that is the Turkish opposition for an eventual Greek exploitation.”

Turkish opposition is mainly related to the chronic failure to reach an agreement regarding the sovereignty of the seabed between the two countries. As Professor Theodoros Kariotis of Maryland University has explained, “Greece has a lot to gain regarding the oil fields if it signs a deal with Turkey based on a double agreement that will divide both the seabed and the EEZ.”

On the other hand, the ex-minister for energy and an expert on the oil and gas business, Mr Andreas Andrianopoulos, recently made remarks on the issue. At a public conference in Athens in November 2010, he stated that “the majority of arguments relating to mass amounts of oil in the Greek territory are based on the so-called ‘assumed fields,’ which means that any research and exploration projects may well prove that the amounts discovered are much less than initially estimated, thus bringing no real return on investment- [making them] not financially viable in essence.”

The overall debate within the country has been heated over the previous months. Strong support for future exploitation was made on well-known Greek television journalist Kostas Hardavellas’ TV show on Alter Channel. The program brought together eminent experts, geologists and energy analysts, who provided ample data for the existence of significant amounts, not only of oil but also of natural gas, worth potentially hundreds of billions of euros.

Certainly, in the financially dire straits that the Greek economy finds itself nowadays, the energy sector in the country, and specifically hydrocarbons research, may well provide an exciting source of investment activity, since it may provide a great boost for the troubled Greek economy.

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By Ioannis Michaletos in Athens

DESFA’s Expansion Plans

The Greek natural gas network company, DESFA, announced in its recent board meeting that it has concluded its mid-term planning regarding upgrading of the Revythousa LNG terminal, and that it will construct a third LNG storage facility that will mainly be used in order to secure export supplies to neighboring countries (Bulgaria and Turkey) interested in using the Greek-based facility as one of the main LNG import points in the wider Southeastern European region.

The project has a budget of 130 million euros, and involves the construction of a 95,000 cbm storage facility in Revythousa, as well as the modernization of the local port infrastructure in order to serve vessels having a capacity of up to 180,000 cbm of LNG. This will be a significant improvement, as at present ship storage capacity does not exceed 135,000 cbm. The Revythousa LNG terminal currently has two LNG storage facilities, each of 65,000 cbm.

According to statements made by DESFA President Dimitris Mavrokefalos in the middle of October, for Athen’s Channel 9 Business TV, “the timeline for the completion of the project is scheduled [to be] by early 2014.” Moreover, he added during a press conference that “private companies from both Turkey and Bulgaria have already showed interest in order to secure imports of LNG that will enter Revythousa, and the quantities being discussed are approximately 500 million cbm per year.”

Furthermore, DESFA’s management has unveiled its expansion plans for the future, which include the completion of the Korinthos-Megalopoli natural gas pipeline that will supply the Megalopoli electricity power station of the Greek power company (DEI). The project is expected to be completed by January 2012, and will cost 110 million euros.

The completion of the Athens-Aliveri gas pipeline, which will also supply DEI’s power station, will be ready by September 2011, with a budget of 64 million euros.

The company is also investing in upgrades to the main pipeline from the Greek-Bulgarian border as far south as the Athens region, in order to increase its capacity in imports from this route (under a long-term contract with Gazprom).

Lastly, DESFA’s board of directors has assured investors and the public that it is energetically involved in regards to projects like ITGI and South Stream, and is awaiting a decision from the main shareholders in order to proceed. Should both projects in fact go ahead, DESFA will raise capital in the amount of more than 1 billion euros for its share of the pipelines construction on Greek territory.

DEPA CEO Giorgios Paparsenos also recently commented on the viability of the Prinos depot project, which is currently in discussions with the private firm Aegean Energiaki. This involves the use of the Prinos depot in Northern Greece as a main gas storage facility- specifically, as a strategic reserve installation for Greece and the neighboring countries. He noted, however, that prospective investors with adequate funds and expertise have to be found, while in addition all legal aspects related to such an endeavor have to be thoroughly discussed with state authorities and the bodies in charge of energy affairs in the country.

Lastly, DESFA estimated that it will achieve an approximately 40 million euro net profit for 2010, in comparison with a 33 million euro profit registered in fiscal year 2009.

A New Player in the Greek Natural Gas Market

A new joint venture has been announced by two significant players on the Greek energy scene: Mytilineos Group and the Motor Oil Company which operates Greece’s second-largest oil refinery. Created under the name of “M+M GAS,” this Athens-based company is intended to become a prime LNG importation company in Greece. The Greek market has registered a significant increase of this type of shipments lately, and so the formation of the company comes at a fortuitous time.

The new company will merge the existing LNG importation operations of its shareholding parent companies, which already control around 10% of the local market through LNG imports they have procured since last April. M+M has a share capital of 2 million euros, and will also target natural gas commerce in an LNG form for the regional market.

For the time being, Mytilineos Group and Motor Oil have imported four LNG shipments since April 2010 into Greece (a total quantity of 375,000 cbm), and the newly formed company will now import an additional six shipments recently awarded by the Greek Power Company (DEI). The total value for these, shipments which have to be delivered by the beginning of 2011, is 450,000 cbm.

According to the Athens-based IENE energy institute, the main reason behind the merger in the LNG sector between these two leading Greek energy companies is the complementary nature of their experience and operations. Motor Oil is owned by the Vardinoyannis shipping family, which has a long history in the field of merchant marine transportation. For its part, the Mytilineos Group is traditionally a major user of natural gas in Greece. Moreover, and most importantly, both of these companies intend to participate in the long-awaited privatization of the state-owned natural gas company DEPA, which the incumbent government has put on the list of companies to be sold.

A December 2008 report by the Greek Ministry for Energy estimates the book value of the company to be 2.5 billion euros, though this figure may have changed downwards since then, due to Greece’s ongoing financial crisis.

The decrease of DEPA’s reach in the local natural gas market owes to the end of its monopoly in early 2010. This event has changed the established business order in the sector, and already 40% of the LNG shipments reaching the Revythousa terminal are being ordered by competing companies.

In this light, the creation of M+M establishes it as the first main corporate adversary of DEPA. It also enjoys the advantage of making orders to facilitate the production of the Mytilineos Group and has already secured significant amounts of LNG for DEI, with both of the aforementioned being Greece’s top two consumers of gas.

Since the shareholders of M+M have adequate financial resources and the ability to supply the Greek market with great amounts of LNG, it is likely that the creation of the new company will accelerate competition and will lead to developments in the Greek natural gas business sectors, in parallel with DEPA’s privatization.

Greece’s LNG consumption is increasing because of the low prices, though there is a 50% increase between the first shipments in April 2010 and the ones arriving in September. The energy analyst Sotiris Chiotakis commented in a recent issue of Greek business newspaper Capital that “the first shipment was ordered from ENI at 5 USD per mbtu, while the price tag has reached 7.5 USD presently. Nevertheless, the Russian-imported gas from the existing pipeline system costs just above 10 USD per mbtu, and thus there is still room for further increase in LNG imports in the country.”

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By Ioannis Michaletos*

Water management is attracting the attention of businessmen in Greece, especially when it is related to the water cycle and energy production. Dams, water transmission pipelines, water depots, and seawater desalination plants are all included in the five-year plan that the Karamanlis administration has relayed recently to the press, as a plan to develop this very lucrative sector.

Greece‘ss national plan was drafted by the Ministry of Public Works, along with the national Directorate of Hydro-management and the Athens National Technical University.

This national program includes both large and small hydro-projects, since Greece has significant hydrodynamic potential, most of which is concentrated in the western and northern sections of the country, where major rivers such as the Acheloos, Arachthos, Aoos, Haliakmon, Stymonas and Nestos flow. At the same time, Greece makes excessive use of electricity, almost 40% more than any of its Balkan neighbors. Greece also imports substantial amounts of electricity per annum, especially from Bulgaria.

Most European countries have reached the highest potential of their hydrodynamic reserves. Greece is an exception; only one-third of the economically exploitable hydrodynamic resources are being exploited. Therefore, the country has significant unused domestic reserves, and can thus create a long-term strategy in this field.

The National Program Management and Protection of Water Resources includes measures for better distribution of water in the 14 designated water departments in the country, which, as announced by Minister George Souflias, include large and small projects for water diversions or transfers and for electricity production. These projects include around 22 large hydroelectric structures and about 300 small hydropower ones.

In order to meet the needs of the more arid regions of the country, a system of small and large dams along the rivers and pipelines transporting water from one water compartment to another will be constructed. For coastal areas and islands, seawater desalination plants have already started to be built, some of them using hybrid technology, meaning they are powered by renewable energy resources such as solar and wind power.

These major projects will be designed so as not to disturb the water balance areas. Yet all the evidence suggests that this is inevitable, as water in the coming years will become a more precious and expensive commodity than oil.

The diversion of the Acheloos River to the Thessaly region has almost been completed, at a cost of over 700 million euros. As a consequence Thessaly’ss farmers will enjoy a significant boost in their production (mostly wheat, corn, potato and cotton), with a 300 MW electricity production facility.

The water department with the largest surplus is West Central Greece, while the deficit is evident in Thessaly. Other departments with water deficit are the Eastern Peloponnese and the Aegean islands.

With Greece’ss current pace of growth, it is calculated that by 2030 the northern Peloponnese, eastern and central Greece, Attica, central Macedonia and Thrace will start facing problems, if the government’ss envisioned plans are not implemented. For the time being, the wet winter of 2008-09 has resulted in a spectacular increase in water reserves to such an extent that there are plans to export water to the Middle East. Last year Greece exported water to Cyprus when the latter faced a drought.

Today, the main issues associated with water management in Greece are:

-unequal distribution of water resources in western Greece due to heavy rainfall in comparison with the eastern parts;

-the uneven seasonal distribution of water resources, winter being the only significant rainy period;

unequal distribution of water demand in the country, with Attica, Thessaloniki and Patras requiring most of the resources during winter, in addition to the most visited tourist islands of the Aegean in the summer;

-leaks in water distribution networks, affecting up to 20% of pipeline networks, pose an additional problem and require new pipeline infrastructure.

Already, Greece has reached scientific and bi-governmental agreements with the EU countries plus Iceland in order to import much needed know-how regarding water management issues.

It is telling that the country is ranked in the last place among 24 European and Mediterranean countries, having at present only 46 large dams. Spain (ranked 1st) has 1196, followed by Turkey with 625, France with 569, and Italy with 524.

The Greek government moreover is now geared to privatize segments of the hydro-infrastructure. The water and sewerage companies in both Athens and Thessaloniki are high on the list next to privatization.

The Ministry of Finance seems to be planning a gradual reduction in the percentage held and in the state companies EYDAP (Athens) and EYATH (Thessaloniki). Currently, the government holds 70% of the share capital of EYDAP (60% government and 10% of the ATE state bank) and over 70% of EYATH. According to all available information those percentages will fall to 40% by next year. The capitalization of the former is around 400 million euros, and of EYATH, around 200 million euros.

Already, French multinational Suez Environment has expressed keen interest to invest in Greek companies. Since both of them hold significant real estate along the two biggest Greek cities, there are ample opportunities for investing in the sewage management sector, the next big thing in the contemporary “Green business” trend. Certainly, the water business is going to become a well known feature in Greece and elsewhere in the Balkans, as major investors start to move into an emerging and very lucrative sector.

€¦€¦€¦€¦€¦€¦€¦€¦€¦

*Frequent Balkanalysis.com contributor Ioannis Michaletos is a Balkan security analyst for the RIEAS Institute in Athens, Greece. He is also Southeastern European Coordinator and Editor for the World Security Network Foundation.

By Ioannis Michaletos*

Greek businesses today are increasingly looking into the prospects of further investments into waste management and possible applications for the bio-fuels industry. Already, some of the bigger companies are making plans for incorporating bio-fuel production into their portfolios, and the general trend towards renewable energy sources and the generous state and European support towards that aim also add to the appeal in this sector.

The current turnover of the waste management market, according to reports from the Ministry of Development in Athens, is around 100 million Euros. Within the next 3-5 years, estimates are that it will grow to 300 million. Over the next 7-9 years, this figure is estimated to have soared to 700-800 million Euros annually. Overall, this means that at least 25 new recycling units must be constructed in the short term, and there are serious considerations calling for the investments to proceed.

The EU has repeatedly fined Greece for its inability to draft a conclusive plan regarding garbage recycling, and according to Giorgo Angelli, a journalist covering environmental issues, “that provides a strong impetus for great investments and assistance by the state in the near future for this sector.”

The Greek state has already started forming public tenders for the new waste processing installations that will be built using Private-Public-Consortiums- whereby private companies will construct the plants, and then be able to exploit them under a leasing agreement with the state.

The necessary funds for this work will derive in most respects from the EU’s 4th Assistance Package, which describes a broad array of handouts from Brussels to Greece within the period 2009-2014. Furthermore, as Christos Ioannou, an independent business consultant notes, “it is more than certain that Greek corporations will seek the collaboration of experienced foreign multinationals, since this industry is rather new to the country and the know-how deemed essential is still limited.”

The Players

The current market structure is composed of the big players in Greece, which will most certainly strive to acquire larger market shares in the future as well. The first such company, Helector, is a part of the Ellaktor construction group, which is active in multiple locations in Greece, the Balkans and the Middle East.

Another involved business, Helesi, operates a recycling plant in Northern Greece which specializes in motor tire process. Its shares are listed in the AIM stock index in London.

Third is Lobbe-Tzilalis, which constitutes a joint venture between the German group and a Greek representative that specializes in hospital waste management in Athens.

Further, the Greek construction group Hellenic Technodomiki, itself a Ellaktor affiliate, operates a household recycling plant near Athens- the first of its kind in the region. It also has a similar one in the Trier -Mertesdorf area of Germany. Recently it established a power station operating with biogas in Northern Greece. According to its press office “the company is interested in promoting this power generating technology in the country and in other markets abroad.”

Bio-Power on the Rise

The energy derived from biomass in Greece has also ignited a series of investments in the biofuel sector. Since mid-2006, the state has provided substantial subsidies of up to 50 percent of an investment, in order for plants to be created that will produce biofuel.

According to the 2003/30 EU Directive on the Promotion of the Use of Biofuels and other Renewable Fuels for Transport, Greece should conform by increasing biodiesel consumption to 5.75 percent by 2010, and 10 percent by 2020 of the total transport consumption. Currently, it is estimated at only 3 percent.

The decline of the oil price index has already cast a shadow on the viability of a multitude of investments-to-be that had at inception calculated a different price range for their bio-fuel product.

Therefore, as chemical engineer Ioannis Papamichail notes, “the annual diesel consumption in the country is approximately 2.7 million tones per annum, whilst the interest of constructing new plants will lead in theory into the production of more than 3 million tones of biodiesel. For 2008 biodiesel production was 100,000 tones so it’s far from the expectations of many prospective investors.”

It is understood that most plans will not proceed at all in the foreseeable future. If one wants to predict how the market will develop, it’s best to look at the already established businesses that have rooted themselves in the market and, in theory, can thus fend off the potential competition.

The first such company, Agroinvest, owns a plant with a maximum production capability of 252,000 tones a year. Further, the Pettas Company operates a factory in southern Greece with a total capacity of 60,000 tones. The Hellenic Biodiesel company owns an installation with a total 40,000-ton production capability in Northern Greece. Lastly, Vert Oil recently established a 44,000-ton plant suitable for such industry.

All of the above companies are Greek-owned and are likely going to be hotly pursued by larger investors which seek an entrance into the market, but do not want to establish new plants due to the limited profit margins related to the oil price decrease. An example is the joint venture named Biodiesel-Greece, created by Hellenic Petroleum and Viohalco Holdings, two of the top Greek multinationals.

Another potential strong player is the Elin Biodiesel Corporation that belongs to an energy group linked with influential Greek shipping interests. Both of them have relayed to the local press that they will proceed with investment plans that include market entrance through the already established players, and in the mid-term complete their own installations in Greece and in the neighboring Balkan countries.

*Frequent Balkanalysis.com contributor Ioannis Michaletos is a Balkan security analyst for the RIEAS Institute in Athens, Greece. He is also Southeastern European Coordinator and Editor for the World Security Network Foundation.

Editor’s note: this special report comes to us from Dr. Jonathan Harris of Royal Holloway, University of London. It recounts the proceedings of an absorbing workshop recently held at London’s Hellenic Centre, which brought members of the general public into contact with some of the world’s leading experts on Byzantium- this time, in the unique context of its little-known, but lengthy relationship with the British capital. Photos appear courtesy of the author.

…………………

By Dr. Jonathan Harris

On Saturday, February 28, a special public seminar was held at the Hellenic Centre. Attended by some forty people, the workshop aimed to explore the links between Byzantium and London by investigating the ways in which the two societies interacted in the past and by exploring the reminders, remnants and reflections of Byzantium that can be found in London today.

The five talks delivered during the day approached that task from different angles. Anthea Harris of the University of Birmingham looked at Byzantine artefacts that have been found in datable contexts in London and the Thames valley.

While the evidence from London itself is sparse, finds from burials both to the north and south of the Thames suggest that Byzantine luxury objects were reaching Britain during the so-called €šÃ„òDark Ages€šÃ„ô (c.450-c.650). Silver spoons and bronze bowls of Constantinopolitan manufacture have been found interred in high-status graves, probably those of chiefs or kings.

For his part, Scot McKendrick, Head of Western Manuscripts at the British Library, described some of the Byzantine manuscripts in the library’s collection and how they came to be there. He ended with a description of the BL’s Codex Sinaiticus online project, which is making the text of the oldest complete copy of the New Testament available on the internet.

In the afternoon, Geoff Egan of the Museum of London’s archaeological service recounted how an excavation on the foreshore of the River Thames had revealed some unexpected finds: Byzantine coins and lead seals.

When these were sent to experts for identification, they proved to be of eleventh-century date. One of the seals bore the Greek word €šÃ„òGenikon,€šÃ„ô suggesting that it was once attached to a document issued by the imperial treasury in Constantinople.

The presence of these objects in London might have been connected with the recruitment of English mercenaries for the Byzantine army, and the famous Varangian guard.

Eugenia Russell, who recently completed a doctorate at Royal Holloway, University of London, looked at Andronicus Kallistos, a Byzantine scholar who died in London in 1476 in circumstances that are slightly obscure. His lonely end is almost foreshadowed in a lament that he wrote for the fall of Constantinople in 1453, and which highlights the themes of exile and dislocation.

Finally, George Manginis of the Archaeological Museum in Ioannina looked at neo-Byzantine architecture in London. As well as discussing the well-known monuments such as Westminster Cathedral and St Sophia in Bayswater, he showed pictures of obscure buildings such as a Primitive Methodist chapel that show a pronounced Byzantine influence. His presentation left the audience eager to learn more about London’s neo-Byzantine survivals.

Among the many satisfied participants at the event was Londoner Martin Hall, currently embarking on a post-retirement MA in Crusader Studies at Royal Holloway. Mr. Hall says that he was “particularly impressed” by George Manginis€šÃ„ô discussion of Byzantine remnants in London, considering it “a highly professional presentation which caused you to look at London buildings in a new light and with a new understanding.”

The workshop was funded by the London Centre for the Arts and Cultural Enterprise and by the Hellenic Centre, and organised by the Hellenic Institute, Royal Holloway, University of London.

By Ioannis Michaletos*

The electricity sector in Greece has expanded recently, and remains characterized by substantial profits made by companies due to the high system marginal prices. Currently there are several companies active in electricity trade in the country that mainly deal in imports of electricity from the Balkans and Italy to Greece. The country has an actual production capacity of around 10,100MW but its needs during the burdened summer season exceed 10,800MW. Recently, the issue has risen to the attention of the public because of losses caused to the Greek power corporation.

A Trader’s Paradise

Haris Floudopoulos, an energy analyst has assessed that energy trading is a €šÃ„òvery profitable business in the country and many of the companies involved actually employ just a few managers, in some cases not more than two or three people, based in small premises in the center of Athens.€šÃ„ô Thus with a minimum investment, higher return is assured.

The difference between the Greek market in terms of system marginal price (SMP) and that of Scandinavia, for example, is significant. For 2007 in the Scandinavian countries, SMP was at 34.53 Euros/MWh whereas in Greece it reached 78.36 Euros/MWh according to information put forth by the Greek power company. In Spain, the price was 61.38 Euros/MWh, while in Germany it was 58.5/MWh, and in France 64.71/MWh.

Moreover, there has been a trend over the past four years of increase in the Greek SMP. In 2005 it was at 43.14 Euros/MWh, but had jumped in 2008 to almost 90 Euros/MWh- more than a 100 percent increase, representing a unique case in Europe.

The Greek network manager, Hellenic Transmission Systems Operator (DESMIE), has informed that according to its database, €šÃ„òthe Greek market currently operates the most expensive electricity system in the EU, although household prices are much lower than the rest of EU countries bar Portugal.€šÃ„ô The reason for this is that €šÃ„òthe SMP increase correlates with the electricity production deficit in the country, along with the rising demand.€šÃ„ô

Another issue is the rule made by the Greek regulatory authority (RAE) that sets a limit of up to 150 Euros/MWh for the marginal price a trader can gain. Since the peak periods are limited to just a few days a year, there are considerable gains to be made by exploiting cracks in the production system of the Greek power corporation.

Although it cannot be verified for the moment, there were cases over the summer of 2008 in which it appeared that trade companies managed to extract the maximum marginal price. The regulatory authority has stated that, €šÃ„òpresently there is no trend concerning the exploitation of the maximum set price, although that cannot be excluded for the coming season.€šÃ„ô

Problems for the Greek Power Company

The electricity production deficit in the country, in combination with the decreasing production capacity of the power stations that operate using lignite, has made it possible for trading companies to exploit their opportunities to make profits unimaginable in other markets.

The Greek power company which controls almost 93 percent of the domestic market has delayed plans to modernize its plants or construct new ones. Further, private enterprises have also stalled their own investment plans, due to political or financial reasons. On the other hand, a 4 billion Euro investment plan by the power company that calls for the construction of new natural gas sites and the expansion of renewable energy systems will reduce dependence on energy traders (along with their fat profits). Yet this will not be achievable before 2015.

According to public statements by Chris Poseidon, a senior manager in the semi-state Greek power corporation, €šÃ„òin Greece, electricity bills are regulated by the state, whereas the trading corporations operate liberally. Thus the Greek power company is obliged in many cases to buy electricity at much higher prices than it actually sells to its customers.€šÃ„ô

The Greek power company increased its bills for household users by 9.5 percent in July 2008, and is petitioning the government to proceed with another 5-7 percent hike from 2009 onwards. For the moment, the troubles of the company have grasped the attention of the media, since it is losing tens of million of euros per month, a windfall now ending up in the pockets of trading companies.

The whole issue has steadily become a political hot potato for the Greek administration. On November 3, 2008, some 34 MP’s from the Socialist opposition requested an official response from the minister of development, presenting data for the first quarter of 2008 showing that the Greek power company had paid 461.4 million Euros in order to cover its electricity balance.

A sure prediction for the near future is that the activities of trading companies will come further to light and become part of a public discourse on the issue. It is more than certain that they have been able to exploit liberalization of the market better than either the government or the Greek power corporation and will continue to do so for the coming years.

The Main Players

In total there are 21 active traders, holding licenses of around 4,150 MW.

Mytilineos (Greek). Trading license of 310MW

ATEL Hellas (Swiss-Greek). Trading license of 300MW, and has reserved 50MW capacity in the Greek-Italian cable, through an auction by the Italian network manager TERNA.

VERBUND-APT (Austrian-Greek). 300MW

Edison Trading (Italian). 300MW. Has reserved a 10MW capacity in the Greek-Italian cable.

ENEL Trading (Italian). 250MW

EDF Trading (French). 243MW. Has reserved a 10MW capacity in the Greek-Italian cable

NECO (Greek-Bulgarian owned). 200MW, and has reserved 30MW capacity in the Greek-Italian cable.

EGL Hellas (Swiss). 200MW, and has reserved 5MW in the Greek-Italian cable, and another 5MW in the Greek-Bulgarian one.

Hellenic Petroleum (Greek). 200MW

EFT Hellas (British-Greek). 150MW and has reserved a 5MW capacity in the Greek-Italian cable.

Other companies that have trading licenses but average low or minimal trade are: RWE (350MW), Eon (350MW), Cinergy (200MW), Entrade (200MW), Danske Commodities (100MW), Ezpada (200MW), Terna Energy (100mw), TCB Energy (80MW), ITA Energy (50mw), Ener Greece (50MW) and Athens International Airport (25MW).

€šÃ„¶€šÃ„¶€šÃ„¶€šÃ„¶€šÃ„¶€šÃ„¶€šÃ„¶€šÃ„¶

*Frequent Balkanalysis.com contributor Ioannis Michaletos is a Balkan security analyst for the RIEAS Institute in Athens, Greece. He is also Southeastern European Coordinator and Editor for the World Security Network Foundation.