The considerable reduction of oil prices in the international market over the past six months has prompted major changes in the field of hydrocarbon exploration and exploitation, causing significant problems even for major players, Energean Oil & Gas CEO Mathios Rigas noted earlier today.
The Energean Oil & Gas head official, who was delivering a speech at a Hellenic-American Chamber of Commerce event on the Greek economy in Athens, pointed out that exploitation of the oil deposit in the Prinos area, northern Greece, would only have long-lasting potential if new major investments are carried out to increase production.
Rigas noted that the recent plunge in oil prices has shed thousands of jobs in the oil industry, worldwide, and stalled numerous investment plans. When Greece was preparing new legal framework for hydrocarbon exploration and exploitation about three-and-a-half years ago, the price of Brent was close to 117 dollars per barrel but had now fallen by about 40 percent, the Energean Oil & Gas chief told the conference. Analysts anticipate a further slide as a result of the major oil production increase in the USA through revolutionary shale oil extraction methods being applied, as well as weaker growth rates in Asian economies and the subdued market demand these are causing.
The country’s current tender procedures for oil exploration and exploitation have coincided with the negative international climate, as well as a growing level of political uncertainty here, as a result of major delays experienced by Greece’s effort to develop the industry, Rigas noted. This was affecting financing costs, he added.