The offshore sector has not so far been a factor in Greece’s rich maritime history, but the country’s debt crunch could change that.
Greece’s government said on 14 July that it has received three bids for undersea acreage in western and southern Greece. The names of the bidders had not been disclosed as of 21 July by the ministry of reconstruction of production, environment & energy.
Hellenic Petroleum reportedly filed for several blocks, and Exxon Mobil and Total were understood to have bought tender documents.
The bids, which were the result of Greece’s Second International Licensing Round (SILR) begun in 2014, mark its latest attempt to tap into offshore energy reserves.
“With prospective areas in much of the Greek Aegean largely off limits because of maritime border disagreements with Turkey, Greece pivoted to acreage offshore western Greece and the island of Crete,” commented IHS Energy, an affiliate of IHS Maritime.
“Given the current situation of the oil industry [under pressure from] low commodity prices, the relatively moderate interest in the tender is viewed by officials as a positive step in the county’s efforts to exploit its offshore hydrocarbon potential,” it added.
Revenues from offshore oil and gas could provide much-needed support for Greece, which came close to bankruptcy earlier this month – and which will face hard times for years as it struggles to climb out of its economic depression.
The country is not without some offshore oil exploration. In October 2014, Greece’s Energean Oil & Gas, along with Trajan Oil, a London-based energy group, signed a licence agreement with Athens for Greece’s offshore Katakolon block in the northwestern Peloponnese.
The tract covers 545 km². It was proven as an oil field by an exploration well drilled in 1981; Energean estimates its recoverable oil yields to be 5 million barrels.
Trajan wrote in a note to shareholders in February that the collapse in oil prices, along with Greece’s economic woes, had forced the company to revise how it obtains funding for operations.
If Greece stays in the EU, “it might be assumed that the EU would frown on delays in the commercialisation of natural resources”, it added. “If they leave the eurozone, they should need all the revenue they can muster. However, reason does not always prevail, but we can say that the economics of the project are robust at current oil prices.”
In preparing for the SILR, Petroleum Geo-Services (PGS) was contracted by Athens to acquire non-exclusive 2-D seismic data off western Greece. PGS, using its survey vessel Nordic Explorer, completed the 12,431 km² seismic survey in February 2013.
The inventory is for 20 blocks, 10 of them off western Greece, one off southern Greece and nine off southern Crete. They range from 1,800 km² to 9,500 km², with a water depth range of several hundred meters to 2,500 m.
A July IHS Energy report noted that new favourable fiscal terms are meant to encourage potential investors with tax cuts and explained that companies will be subject to a special income tax at a rate of 20% and a regional tax of 5%.
Developing an offshore sector, meanwhile, could help stem Greece’s slide in status as a maritime country.
The latest annual survey of maritime centres released by Norwegian consultancy Menon Business Economics revealed that Athens had dropped two positions to number 10.
The report did not link the ranking decline with Greece’s recent economic crisis but left open the question of how much its maritime sector could have developed without it. The study does point out that Greece still dominates the world orderbook, suggesting that Athens will keep its position as an important ownership city.
However, Greeks “haven’t been able to build a complete maritime industry”, Menon partner Erik Jakobsen told IHS Maritime. Singapore tops Menon’s list, with Hamburg second and Oslo third.
Hamburg and Oslo, along with London and Rotterdam, are fighting to become the leading city in Europe for maritime activities, the report observed.
“While London deals with traditional maritime and Oslo more offshore, Oslo handles both, which gives it a slight edge,” Jakobsen noted.