Local exploration effort to be re-activated; Iran a key factor

Improved offers requested earlier this month by the energy ministry for preceding bids submitted by Energean Oil & Gas and ELPE (Hellenic Petroleum) concerning three onshore blocks in western Greece are expected to be opened for appraisal within the next few days, according to energypress sources.

Both Energean Oil & Gas and ELPE have placed bids for an onshore block in Arta-Preveza. ELPE also submitted an offer for a block in northwestern Peloponnese block, while Energean Oil & Gas placed an offer for a block in Etoloakarnania.

Also, committees to examine three other offers submitted for offshore blocks in western Greece are expected to be assembled over the next few days. The committees will then assess the offers, which have remained sealed.

Just days ago, Stefanos Xenopoulos, a board member at EDEY, the Greek Hydrocarbon Management Company, told a Global Oil & Gas conference that Greece intends to re-activate its state apparatus concerning hydrocarbons exploration and production. Xenopoulos said he hoped procedures for tenders will soon be completed and agreements signed.

Delays by the country’s overall effort to utilize its possible deposits come at a time of worsening market conditions for the sector. Firstly, oil and natural gas prices have fallen significantly, prompting a cutback of investment plans by energy companies.

The reduction of investment funds being made available by energy companies has intensified the level of competitiveness between rival regional projects, all seeking to attract the market’s smaller investment amounts on offer.

This is especially true of the Mediterranean basin, where a new deposit, the super-sized Zohr deposit, located in the deep waters of Egypt, was recently added to the overall picture of prospective projects. It is expected to draw capital that would have otherwise been invested in other regional projects. Cypriot and Israeli exploration efforts are likely to be affected by the development.

Iranian natural gas production, which has the potential to impact the international market in a major way in the medium term, remains an unknown factor at this stage. Iran’s natural gas potential ranks as one of the world’s highest. If this country returns to the international energy market, it may cover a significant part of demand at exceptionally competitive prices. This may postpone plans for the development of projects in Greece.