Subdued interest for offshore tender as July deadline approaches

The level of interest being expressed by foreign oil companies for a tender offering exploration and exploitation rights to twenty offshore blocks in the Ionian Sea and south of Crete, whose deadline expires on July 14, is reportedly subdued.

According to sector sources, investor interest has remained anemic as a result of lower international crude prices, now at about 60 dollars a barrel, as well as because of the prevailing negative conditions in Greece.

During yesterday’s presentation of the new investment plan at Energean Oil & Gas, the Greece-based energy company’s Chairman and CEO Mathios Rigas, while explaining that his company was currently not interested in taking on new investment risks in deep-sea regions, also noted that the tender deadline should be given a new extension if the procedure draws little or no interest, to avoid giving the international investor community the impression of failure.

Rigas also expressed concern over the prospect of certain companies acquiring licenses for some of the offshore blocks on offer without any intention to invest in exploration work, but, instead with the objective of selling their acquired rights later on to energy groups able to pay higher prices.

Despite an effort, in recent times, by Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis to draw the interest of companies in Russia, China, Japan, Brazil, and Venezuela, no interest has yet to be seen.

Apart from three companies, Exxon Mobil, Total, and ELPE (Hellenic Petroleum), which have already purchased seismic survey packages offered by Norway’s PGS, no other energy company appears to have acquired the research results. This is also disappointing for the Norwegian company, which, at this stage, does not appear likely to cover the cost of its survey work conducted in the Ionian Sea and south of Crete.

According to sources, the foreign buyers of the PGS survey package for the Greek offshore blocks are unlikely to submit offers. However, ELPE appears to preparing to submit a bid and is believed to be currently seeking to join forces for the venture with a major foreign partner.