ATHENS – A French-led consortium from Total and US energy giant ExxonMobil, each with 40% stakes, as well as Hellenic Petroleum, have submitted a bid to explore for hydrocarbons off western and southwestern Crete, opening the potential for new discoveries in the region and exports to Europe, while boosting the EU’s energy security.

Spain’s Repsol and Hellenic Petroleum have in the mean time submitted a joint bid for a block in the Ionian Sea. On March 5, Greece’s Energy Minister Giorgos Stathakis welcomed the interest of major companies for hydrocarbon exploration offshore Greece, saying, “It is a vote of confidence in the prospects of the Greek economy and the country’s role as a stabilising factor in the Southeast Mediterranean region”. However, industry sources noted that the market expectation was for higher participation.

The Hellenic Hydrocarbon Resources Management (HHRM) will evaluate the bids on the basis of which Greece’s Environment and Energy Ministry will decide.

Commenting on the decision of Exxon and Total to explore off the Cretan coast, energy expert John Roberts told New Europe on March 6 the fact that two of the most prominent companies engaged in prospecting for gas in the Cypriot offshore are also looking for gas in the nearest Greek offshore areas that are closest to Cyprus is highly important.

“If they were to make a commercial discovery it would have two major consequences,” Roberts said, who was in Athens on March 5 to participate in a conference by IENE.

“The first is that it would demonstrate that the Eastern Mediterranean energy province is much greater than previously thought, the second is that it would significantly improve the economics for an Eastern Mediterranean gas pipeline between the fields that have already been discovered in Israel, Cyprus, and Egypt and a landing point in Italy from which it could serve the major markets in Western Europe. But it is still a very big ‘if’ and we probably won’t know whether either of these consequences will come about for quite a few years,” he added.

Meanwhile, Cyprus Natural Hydrocarbons Company CEO Charles Ellinas told New Europe on March 7 that the Total-Exxon bid is good news for Greece as it opens up the potential for new, major, hydrocarbon discoveries. He noted that these companies were attracted to the region by the discovery of Zohr off of Egypt.

“As a result of the success with Zohr and now Calypso in Cyprus, the East Med is becoming very attractive for the industry,” Ellinas said. “Another factor is that these are areas free of conflict and geopolitics, something which poses major challenges in the rest of the East Med,” he added.

He explained that these are international majors with the technical and financial capabilities needed to explore and develop hydrocarbon resources in the challenging areas west of Crete and Greece, where water depths can exceed 2,000 metres and the total depth of potential reservoirs can reach 5,000 metres.

“For Greece it has been a tortuous path getting to this stage, following a number of disappointing attempts and more than 50 years of trying. What has become clear in 2017 is that the Greek Ministry of Energy and HHRM are now giving priority to the hydrocarbons sector and are ready to work with the international oil companies needed to develop it,” Ellinas said, adding that these developments bode well for Greece, which has been struggling with a severe debt crisis in the past few years.

“Resuming efforts to search for and develop Greece’s hydrocarbons sector can only help. Success can possibly lessen the country’s dependence on energy imports in the future and actually become an energy exporter, something which has the potential to shore up its battered economy,” he said.

The proximity to Europe makes getting any discovered oil and gas there more competitive and less challenging in comparison to the East Med, Ellinas said.

Turning to ExxonMobil drilling in Block 10 in Cyprus’ Exclusive Economic Zone (EEZ), Ellinas expressed his hope that it can proceed as planned.

“This is crucial. Much hangs on the more optimistic indications from the evaluation of seismic data that has shown that Block 10 may hold significant amounts of natural gas, in formations similar to nearby Zohr,” he said. “A major discovery there could alter the gas balance and associated geopolitics in the region. It could put ExxonMobil at the forefront of future gas developments and would rekindle interest in the region. It would also increase pressure on all sides to solve the Cyprus problem, to unlock the gas riches of the region,” Ellinas added.

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