Crete

Hydrocarbon licenses on hold as a result of snap elections

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The country’s ambitious hydrocarbon exploration and production plan appears set to be impacted by further delays as a result of the government’s call for snap elections, now expected to take place on July 7.

License agreements signed recently for offshore blocks in the Ionian Sea and west of the Peloponnese, will, as a result, not be pushed through for ratification in parliament until after the elections.

An Ionian Sea license has been acquired by a consortium comprising Repsol and Hellenic Petroleum (ELPE), while ELPE has also taken on Block 10, further south, west of the Peloponnese.

Licenses offered for blocks west and southwest of Crete to a consortium made up of Total, ExxonMobil and ELPE are also set to face delays as a result of the country’s political developments. The triple-member team will need to hold on for several more months before it can begin work at these promising spots. The consortium’s licences, still in the hands of a supervisory committee, have also yet to be ratified in parliament. No action on these is expected prior to the early general elections.

Procedures concerning the formation of a new government and the ensuing summer break will delay the ratification of these agreements until September, experts have estimated.

Investors looking forward to exploration work in the Ionian Sea and off Crete have become well acquainted with the slow-moving ways of Greece and are prepared to remain patient until this latest obstacle is cleared, pundits noted.

The country’s recent administrations have all moved slowly on hydrocarbon licensing matters.

 

Bigger power shortage forecast for Crete demands extra action

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Having just determined a bigger-than-expected electricity shortage on Crete for this coming summer, DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, has informed the main power utility PPC to bolster its plan for additional mobile electricity production units on the island.

The operator has increased its projected summer shortage for Crete to 90 MW from the previous forecast of 50 MW.

PPC licensing procedures concerning the transfer of mobile electricity production units to Crete are already in progress, based on the original power shortage forecast. These mobile units, including 18 company-owned units currently stationed on Rhodes and totaling 23 MW, possess a total production capacity of 61 MW.

More units will now need to be brought into action to cover the 90-MW shortage forecast for Crete. RAE, the Regulatory Authority for Energy, has urged PPC to act fast. Crete’s electricity needs will begin escalating to high levels in July.

PPC has already made clear it will need to be assured of reimbursements before it can make any additional capacity-boosting moves for Crete. It is awaiting officials documents from RAE recognizing the cost entailed.

Once the Cretan capacity issues for this summer have been resolved, RAE will need to think about the summer of 2020 as a small-scale grid interconnection linking the island with the Peloponnese will not have been completed. Solutions for the summers of 2021 and 2022, the intermediate period between Crete’s small-scale interconnection and the big link to Athens, also need to be found.

Solutions minimizing cost and environmental impact are the top priority for authorities.

Greek PCI support for Eurosia conditional, minister suggests

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Greece’s decision to proceed with the development of the Crete-Athens electricity grid interconnection as a national project through power grid operator IPTO’s special purpose vehicle Ariadne rather than as part of a wider Euroasia Interconnector project planned to link the Greek, Cypriot and Israeli grids has cast doubts over the future PCI status of Euroasia’s Crete-Cyprus and Cyprus-Israel segments.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, will need the support of all parties involved if the Crete-Cyprus and Cyprus-Israel segments are to secure a place in the EU’s new PCI list, enabling favorable funding, when the updated list is published later this year, in autumn.

Though Greece’s energy ministry has yet to make its intentions clear, it faces pressure, especially from Cyprus, to support the continued PCI-status of the Crete-Cyprus and Cyprus-Israel segments as their development would end Cyprus’ electricity grid isolation.

Greece’s stance will most likely depend on Euroasia Interconnector’s moves and whether it will seek to obstruct the development of the Crete-Athens interconnection through legal procedures and other action.

Energy minister Giorgos Stathakis has suggested Greece’s support for the wider project’s PCI status would be conditional.

IPTO recently decided to remove the Crete-Athens segment from the wider Greece-Cyprus-Israel interconnection project as the operator was embroiled in a dispute with the Cypriot consortium over the local segment’s control.

EDEY to drum up Greek oil, gas hopes at Italy, Romania events

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Spurred by recent significant gas field discoveries at Cypriot and Egyptian offshore blocks and the favorable prospects these have generated for the wider region, top officials at EDEY, the Greek Hydrocarbon Management Company, will be looking to attract major foreign investors to new Greek blocks at two industry events in Italy and Romania.

EDEY chairman Yiannis Basias, who is in Ravenna, Italy today to attend the Offshore Mediterranean Conference & Exhibition, a leading industry event, will be exploring the potential interest of oil majors, including Italy’s ENI, for new offshore blocks in the Ionian Sea and off Crete to soon be licensed out.

EDEY chief’s deputy Spyros Bellas will follow up this effort in Bucharest at the Balkans & Black Sea Cooperation Forum, scheduled to take place April 4 and 5.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, hailed the wider region’s prospects at the recent Delphi Economic Forum in Greece. ExxonMobil is currently involved in exploration work being carried out in Romania.

Speaking earlier this month at London’s Global APPEX (Prospect & Property Expo), an event organized by the American Association of Petroleum Geologists (AAPG), Bellas, EDEY’s deputy, presented a road map of Greece’s hydrocarbon plans for 2019 to officials of foreign companies as well as latest and more detailed geological data on the Ionian Sea and Cretan regions. This data was processed by Norway’s PGS.

The strategy adopted at EDEY is to plan tenders for offshore blocks based on the interest expressed by foreign investors at this series of meetings.

Besides ENI and ExxonMobil, EDEY is seeking to convince Repsol, Shell and other US majors of Greece’s hydrocarbon prospects.

 

 

Motor Oil’s LPG power plant plan for Crete raises local objections

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Motor Oil is preparing to develop a 120-MW LPG-fueled combined cycle power power plant on Crete but will need to overcome local resistance, early developments have already indicated.

The company has applied to RAE, Greece’s regulatory authority for energy authority, for an electricity production license for a combined cycle power power plant in the Hania prefecture’s Souda area, seen as a major prospective investment for Greece’s electricity generation sector.

The region’s Pera Platani area has been classified as an industrial zone in Crete’s new regional spatial plan, already revised and endorsed by authorities.

However, local community and authority objections have already been raised. The Hania municipal council yesterday voted unanimously against the project, noting its choice of location is part of a residential area. The island’s Korakia, Atherinolakkos and Xylokamara areas have been classified as the island’s energy hubs, the local council noted in its decision.

All parties with objections to Motor Oil’s choice of location for the investment plan have until March 23 to inform RAE.

Fast-track procedures for Crete energy shortage threat

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The government is preparing fast-track procedures for the installation of electricity production facilities on Crete by  2020, needed to avoid an energy shortage following an EU-required withdrawal of old units at the end of 2019.

Installations of wind turbines as well as power generators that may be hired or transferred from Rhodes are among the solutions being considered by authorities to ensure the island’s energy sufficiency.

Building permit demands are expected to be omitted to make the fast-track procedures as swift as possible.

The plan’s new electricity generation solutions will be crucial until the completion of a small-scale grid interconnection linking Crete with the Peloponnese, expected during 2020. Even then, Crete will still face a 200-MW capacity deficit until a major-scale grid interconnection, linking Crete with Athens, is completed in 2022.

Three old, high-polluting units with a total capacity of 728 MW will need to stop operating on Crete as a result of strict EU environmental regulations, Miguel Arias Canete, the European Commissioner for Climate Action and Energy, has made clear to the Greek government.

Electricity demand on Crete, one of the country’s biggest tourism destinations, currently stands at 630 MW and is expected to exceed 700 MW in 2020.

 

IPTO plans Crete link tender for Euroasia’s neglected 39%

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Greek power grid operator IPTO has announced it will stage a tender offering investors, especially European operators, a stake in Ariadne Interconnector, an SPV established by the grid operator for the development of a Crete-Athens interconnection.

The move was prompted by the neglection of a pre-emption right, for a 39 percent stake in the SPV, by Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project. Euroasia Interconnector had been set a December 31 deadline to accept the offer for 200 million euros.

IPTO and the Cypriot consortium have been embroiled in a dispute for control of the wider grid interconnection project’s Crete-Athens segment.

RAE, the Regulatory Authority for Energy, which appointed IPTO project promoter of the Crete-Athens link, required to prevent a looming energy shortage threat on Crete, will need to approve IPTO’s plan for a tender before this procedure can go ahead.

Euroasia Interconnector will now need to participate in IPTO’s prospective tender should it ultimately decide to become involved in the development of the Crete-Athens grid interconnection.

IPTO has already begun contacting European energy transmission operators, Manos Manousakis, chief executive at IPTO, informed yesterday. The Greek operator had approached Belgium’s Elia and France’s RTE in the past. A new invitation for their participation cannot be ruled out.

Euroasia Interconnector is widely expected to launch a legal challenge.

Earlier this month, the European Commissioner for Climate Action and Energy Miguel Arias Canete forwarded a letter to Greek energy minister Giorgos Stathakis informing him that RAE’s decisions have led to delays in the wider PCI project, according to Greek daily Kathimerini.

The commissioner has apparently asked Greece to decide whether the Crete-Athens grid interconnection will be developed as a PCI project, enabling EU funding advantages, or as a national project, which would eliminate the project’s promoter from the Connecting Europe Facility (CEF), a key EU funding instrument. The repercussions would spill over onto tariffs paid by consumers.

 

 

PPC asked to explore Crete energy sufficiency solutions until 2022

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The main power utility PPC, in ongoing exchange with RAE, the Regulatory Authority for Energy, has reiterated its concerns of a potential energy sufficiency threat on Crete until 2022, when the anticipated launch of grid interconnections is expected to have resolved the problem.

A study conducted by RAE in conjunction with DEDDIE, the Hellenic Electricity Distribution Network Operator, has forecast a capacity deficit for the island in the lead-up to the island’s grid interconnections.

Responding to a RAE request calling on PPC to explore possible solutions, the power utility has asked for further clarification. The power utility wants specific figures concerning Crete’s capacity shortage threat.

The energy authority apparently wants PPC to work on proposals covering three scenarios for additional electricity generation of 50, 100 and 150 MW.

Solutions contemplated so far include a PPC tender for the installation of additional wind energy facilities as well as proposals by Gek Terna and Socar for the development of small-scale LNG-fueled power stations as back-up solutions.

However, at this stage, it remains unclear if future market conditions can secure the sustainability of such back-up LNG units once Crete’s grid interconnection projects are launched.

 

 

Crete gas discovery will prompt ‘need for LNG facility on island’

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The potential discovery of natural gas deposits west and southwest of Crete will prompt the need for infrastructure development on the island, including an LNG facility, Yiannis Basias, chairman of EDEY, the Greek Hydrocarbon Management Company, has told local newspaper Haniotika Nea in arguably his most forthright comments to date on the island’s energy prospects and subsequent actions.

Besides an LNG facility, the discovery of natural gas deposits in the region would also require pipeline development for natural gas transmission to platforms or the shore and subsequent transportation, Basias told the Cretan newspaper.

The official noted he is confident drilling expeditions planned for the region will produce favorable results. “Natural gas will be discovered west and southwest of Crete as the geological characteristics here converge with those of Egypt, Cyprus and Israel,” he pointed out.

Athens defies Brussels limit for Crete’s diesel power stations

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The energy ministry appears to have decided not to restrict the operating capacity of Crete’s diesel-fired power stations by the end of 2019, when a European Commission extension for these high polluting units expires, as all alternatives examined to cover a consequent energy sufficiency shortage on the island are seen as high-cost solutions.

Though Greece’s interest for a further operating extension has not been officially rejected by Brussels, the European Commissioner for Climate Action and Energy Miguel Arias Canete recently made clear the country will not be granted more time.

Energy minister Giorgos Stathakis is counting on an increased level of understanding by the European Commission, given the looming energy shortage threat on Crete, as well as lengthy procedures implemented by Brussels officials in reaction to environmental violations.

A prolonged operating period of Crete’s diesel-fired power stations, covering electricity needs until a submarine power cable connection linking the island with the Peloponnese is completed, should make the energy scare manageable.

Taking into account higher electricity demand levels anticipated on the island, an additional 50 MW should be needed in 2019 and 70 MW in 2020, according to a DEDDIE/HEDNO (Hellenic Electricity Distribution Network Operator) study that was reportedly presented at an Athens meeting this week.

Small units to be transferred from Rhodes and, possibly, leasing of other units for Crete, are planned to cover this extra demand.

Qatar team in Crete to survey units for sufficiency proposal

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A team of Qatar state-run energy company officials has arrived in Crete to survey the main power utility PPC’s diesel-fueled power station in the Atherinolakos region as part of the firm’s interest to offer a solution for Crete’s looming energy sufficiency threat as of 2020, when PPC will need to have withdrawn its diesel-fired power stations operating on the island.

The survey to be conducted by Qatari energy company technical officials will also include the Atherinolakos port facilities, intended to be utilized as a key part of the plan. The firm’s proposal entails the usage of a floating power station and electricity supply unit to be anchored at the Atherinolakos port for additional electricity generation on Crete. The vessel will include an LNG storage facility as well as a gasification unit, according to the Qatar firm’s plan.

At this crucial stage, given the little time remaining before the withdrawal of PPC’s old diesel-fired power stations on Crete, it still remains unclear how the government and RAE, the Regulatory Authority for Energy, will go about resolving the island’s energy sufficiency threat from 2020 onward.

As his most preferred choice, energy minister Giorgos Stathakis hopes the European Commission will offer a further operating extension for Crete’s existing power stations. If Brussels does not, then the old units will need to stop operating by December 31, 2019.

GEK Terna, Socar and Spain’s Enagas have also made proposals along the lines of the plan proposed by Qatar’s energy firm.

PPC currently operates three diesel-fueled power stations on Crete with a total capacity of 728 MW. Total electricity demand on the island is estimated at 630 MW.

A planned submarine cable link from Crete to the Peloponnese will provide a further 150 to 180 MW to the island, while a major-scale grid interconnection, to link Crete with Athens, will offer around 700 MW.

These interconnection projects have been delayed as a result of an ongoing dispute between Greek power grid operator IPTO and Euroasia Interconnector – a consortium of Cypriot interests heading a wider Greek-Cypriot-Israeli PCI-status interconnection project – for control of the Crete-Athens segment.

 

 

 

Canete’s deadline extension rejection for Crete diesel units raises alarm

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A question forwarded by ruling Syriza party Euro MP Stelios Kouloglou to the European Commission’s climate change and energy chief  concerning project awarding procedure delays for the Athens-Crete grid link has unintentionally raised the alarm for urgent action at the energy ministry and RAE, Greece’s Regulatory Authority for Energy, suddenly both under major pressure to seek a solution that would prevent an energy shortage problem on Crete as of 2020.

Responding to the Greek MEP’s question, the European Commissioner for Climate Action and Energy Miguel Arias Canete made clear, in a public statement, Greece will not be granted any further deadline extensions beyond December 31, 2019 for diesel-fueled power stations operating on Crete.

The commissioner’s reaction also serves as a preemptive response to any deadline extension, as has been contemplated by Athens, for Crete’s diesel-fueled power stations. Such a request has yet to be made.

According to sources, highly ranked Brussels officials visiting Athens last month had kept alive the prospect of a deadline extension for Crete’s high-polluting power stations until the energy shortage fears on the island were overcome, under the condition that this allowance was accompanied by an environmental initiative from Athens, such as the withdrawal of lignite-fired power stations operating on the mainland.

 

 

 

Socar, Qatari firm proposals for Crete energy sufficiency issue

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LNG usage and the establishment of a floating regasification terminal for gas-fueled electricity generation at power stations are the common factors of at least two proposals to be presented this week to RAE, the Regulatory Authority for Energy, as possible solutions for the Crete’s looming energy shortage problem as of 2020.

An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

An Athens-Crete interconnection plan that would resolve resulting power insufficiency issues on the island has fallen behind schedule and prompted the need for solutions until the project’s launch.

Azerbaijan’s state-run energy firm Socar – possibly in partnership with Heron, which has been given permission to relocate a natural gas-fueled power station from provincial Thebes, slightly northwest of Athens, to Crete – is expected to present RAE a model implemented by the firm on Malta in 2016. The island country faced a similar energy situation to Crete. A gas storage facility (FSU) and floating regasification terminal and combinations of gas-based electricity production now provide 50 percent of electricity demand on Malta.

A representative of a state-run Qatar energy firm has also approached RAE for a solution entailing gas supply and electricity production via a floating terminal to be anchored off Crete.

Ministry presents plan to tackle Crete’s looming energy threat

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The government intends to implement a gradual power station withdrawal program on Crete, beginning with older units and continuing with the remainder of units subject to EU environmental terms, as a means of countering a looming power sufficiency threat on island, energy minister Giorgos Stathakis has told parliament in response to questions forwarded by opposition party MPs.

An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019, meaning the island could face energy sufficiency issues as of 2020. A major-scale interconnection project planned to link Athens and Crete, which would compensate for the Cretan power station withdrawals, has fallen behind schedule, raising concerns.

According to the government’s interpretation of the EU directive, 300-MW gas turbine units in, Linoperamata, Chania will be able to operate, energypress sources informed. Athens also plans to request an EU law exemption that would enable steam turbine units with a capacity of 100 MW to operate in the Lasithi prefecture’s Atherinolakko area.

In addition, Crete’s small-scale interconnection to link the island with the Peloponnese is expected to completed by 2020, providing a further 150 MW to the island’s grid.

Renewable energy units already installed, especially large wind energy parks in the Sitia area, eastern Crete, will be fully utilized as part of the effort and should cover as much as 25 percent of the island’s energy needs, according to estimates.

 

Heron seeks extended license for power plant transfer to Crete

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Energy firm Heron has requested improved terms for a license granted by RAE (Regulatory Authority for Energy) in 2017 permitting the firm to relocate a natural gas-fueled power station from provincial Thebes, slightly northwest of Athens, to Crete, as the energy group believes the initial terms offered do not ensure the power station’s sustainability, energypress sources have informed.

The firm’s planned Cretan move comes in anticipation of energy sufficiency problems expected to affect the island as of 2020, when some older power stations operating on the island will need to be shut down permanently as a current exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

Heron is primarily seeking a longer-lasting production license on Crete for Heron 1, a gas-fueled unit located on the outskirts of Thebes, as an extension would justify the costs entailed in moving the power station to Crete.

Heron also intends to install an FSRU (floating LNG terminal) on Crete for gas supply to the Heron I power station, planned to be relocated to Atherinolakos, in the island’s southeast.

An existing main power utility PPC diesel-fueled power station also operating in this area will also be able to be supplied by the FSRU.

Heron’s Cretan plan will also enable the development of a small-scale gas network for supply to big and small industrial facilities.

Greece’s first privately owned power station, Heron I, which emerged in 2004, is comprised of three open-cycle gas turbines and has a total capacity of 150 MW. Located next to Heron II, the firm’s more recent power station, Heron I runs on two types of fuel, natural gas as the main fuel and diesel as a backup fuel.

RAE is examining Heron’s request as part of a wider effort to counter Crete’s energy shortage dangers as of 2020.

 

 

EDEY set to deliver opinion on Crete, Ionian hydrocarbon contracts

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EDEY, the Greek Hydrocarbon Management Company, plans to forward, to the energy ministry, a study evaluating details of contracts for three hydrocarbon licenses in the Ionian Sea and off Crete between late April to early May, energypress sources have informed.

Early in March, two consortiums submitted bids for three blocks to international tenders. Total-ExxonMobil-ELPE (Hellenic Petroleum) submitted offers for two blocks west and southwest of Crete. Repsol-ELPE made an offer for the Ionian Sea block.

The EDEY study is focused on technical, legal and financial aspects of the contracts prepared. It is a mandatory step before the participants may be declared prefered bidders.

Once the green light is given, the Greek State will be able to commence licensing negotiations with the consortiums. The aim is to finalize procedures within the next few months, which will clear the way for investments and exploration work.

Both the Greek government and local hydrocarbon sector are placing great emphasis on this specific effort as the interest expressed by ExonMobil, Total and Repsol has raised hopes of potential hydrocarbon discoveries.

Turnout for Crete, Ionian Sea blocks lower than expected

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The turnout by petroleum firms for an international tender offering hydrocarbon exploration and exploitation rights to three offshore blocks off Crete and in the Ionian Sea was lower than had been anticipated by Greek authorities. The deadline for offers expired Monday.

Without a doubt, the stature of participating consortiums – Total, Exxon and Mobil, Hellenic Petroleum (ELPE) as well as Repsol-ELPE – which submitted respective offers for the Crete and Ionian Sea blocks, cannot be disputed, but the early interest expressed by other players expressed was not followed through.

The reduced competition is expected to subdue the price level of offers made. Had more than one consortium submitted offers for each of the blocks on offer, higher bids, as well as revenues for the Greek State, would have been generated.

Total, Exxon Mobil and ELPE submitted bids for the two Cretan blocks, west and southwest of the island, while ELPE – Repsol delivered a bid for the one Ionian Sea block offered.

The early interest of Total, Exxon Mobil and ELPE in the Cretan offshore area prompted EDEY, the Greek Hydrocarbon Management Company, to stage the tender for the Crete blocks.

Energean Oil & Gas, whose preliminary interest in the Ionian Sea prompted the Ionian block tender, did not turn up. Sources attributed this absence to two factors – the petroleum firm’s focus on Israel, where it has assumed development of the Karish and Tanin fields, as well as a 500 million-dollar equity raising endeavor, through a premium listing on the London Stock Exchange’s Main Market, to support its Karish and Tanin projects.

Other noteable absentees included Italy’s Eni, Israel’s Delek, as well as US firm Noble. The geological risk of the areas offered – especially the Cretan blocks, categorized as unexplored deep-sea frontier areas – was cited as a factor. So, too, was the relatively low price of oil (63 dollars per barrel), which cannot justify the required investment costs. The lack of any major deposit discovery in Greece, such as the Aphrodite hydrocarbon field in Cyprus and the Zohr field in Egypt, has also been cited as a contributing factor behind the subdued turnout.

The problems encountered by Eni in the Cypriot EEZ as a result of the interruption of a drilling attempt by Turkish naval forces at a license held by the Italian firm, is believed to have kept it away from the tender offering Cretan and Ionian Sea blocks.

Oil majors set for Crete block offers, milder Ionian interest

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With just days remaining before deadlines for tenders offering exploration and exploitation rights at a total of three offshore blocks off Crete and in the Ionian Sea, five petroleum firms, including three international oil majors, took part in an exploration security-related meeting held by EDEY (Greek Hydrocarbon Management Company) yesterday, which suggests they will be submitting offers.

Exxon Mobil, Total and ELPE (Hellenic Petroleum), whose interest in the Greek market prompted EDEY to offer two offshore blocks off Crete, Repsol, following developments for Ionian Sea investments, and Energean Oil & Gas, whose interest in the Ionian Sea area led to the other EDEY tender, all participated in the hydrocarbon company’s meeting, ahead of the deadines for the three tenders, expiring this coming Monday.

The interest expressed by investors for the two Cretan offshore blocks appears to be greater.

Noble Energy and Israel’s Delek, which have visited a related virtual room set up for the tenders by EDEY for information, were not represented by any officials at yesterday’s meeting. It remains to be seen whether these absences mean that the two firms will not submit offers on Monday.

At this stage it appears that a three-member consortium made up of Exxon Mobil, Total and ELPE, as well as Italy’s Eni, already active in Cyrpus, will submit offers for the Cretan blocks. A third offer from Noble and Delek would come as a surprise.

Eni recently had to deal with Turkish intervention in Cypriot waters, which has delayed the firm’s drilling plans for that area.

As for the one Ionian Sea block being offered, Spain’s Repsol has displayed a consistent interest, despite negative reactions by local authorities and citizens against nearby exploration work, with Energean, in the Ioannina area, northwestern Greece.

In an Oil & Gas Journal article published last month, two EDEY officials informed that areas west and southwest of Crete have shown serious signs of deposits.

The northwest part of the Ionian Sea, the location of the third block being offered, has also shown hydrocarbon potential as it shares similar geological characteristics with the southeast Adriatic Sea, already producing.

 

 

 

 

Public Service Compensation revisions creating new deficit

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Recent legislative revisions to Public Service Compensation (YKO) categories and charges will reduce revenues needed to fully balance this account, used to cover high-cost electricity generation on non-interconnected islands and also subsidize power supply to low-income households.

Under the new system, higher YKO surcharge rates applying to higher consumption level categories are not imposed on entire electricity amounts consumed, as was the case under the previous formula, but to consumption amounts exceeding category upper limits.

This change is expected to deprive the YKO account of tens of millions of euros, annually.

The Cyclades are being interconnected to the mainland electricity grid this year, a development that promises to lessen the demands of the YKO account and subdue any developing deficit. Even so, the YKO account deficit will not be fully covered and transformed into a surplus figure until other Greek island interconnections are completed, especially that of Crete, the country’s largest and most populous island.

The YKO account benefits to be offered by the Cyclades interconnection are believed to be worth 100 million euros, annually, according to a 2014 estimate.

Data room for Ionian Sea, Crete offshore blocks now ready

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EDEY, the Greek Hydrocarbon Management Company, has prepared a virtual data room set up to offer prospective bidders information on Cretan and Ionian Sea offshore blocks that will soon be offered through international tenders.

Prospective bidders will be permitted access to the data room, containing information on matters such as seismic, drilling and legal issues, as soon as the tender is published in the EU’s official journal, the OJ. Publication is expected soon.

Bidders, who will be charged a 1,000-euro data room entrance fee, will use the information provided to prepare bids for two international tenders offering licenses west and southwest of Crete as well as the Ionian Sea.

Besides a data room for Athens, equivalent rooms have been set up in London, Oslo, Kuala Lumpur and Houston.

Investors will have 90 days to submit their bids once the tenders are officially announced in the OJ. The appraisal period of offers is scheduled to last two months.

Licenses are then expected to be issued within a three-month period. Once approved by a special committee and Parliament, these licenses will offer investors 8-year terms for exploration and 25 years for production.

A consortium comprised of Total, ExxonMobil and ELPE has already declared an interest for blocks west and southwest of Crete. Energean Oil & Gas is interested in the Ionian Sea offerings.

 

 

National RES plan overpowers regional versions, officials note

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Energy and environment ministry officials, in comments to energypress, insist that a national plan determining locations where RES facility installations are permitted overpowers regional plans.

Subsequently, a regional plan for Crete that forbids RES installations within Natura areas – EU network of protected areas – cannot take effect even though it has already been signed by energy minister Giorgos Stathakis and published in the government gazette, ministry officials pointed out.

Even so, RES sector investors fear the regional plan for Crete could include details that may set a precendent and lead to project development restrictions on a wider level.

A considerable number of local Syriza party officials in Crete are playing key roles in moves opposing large-scale RES development.

According to the regional plan for Crete, RES installations, especially wind farms, are subject to existing environmental measures that apply for Natura areas.

On photovoltaic facilities, the plan for Crete notes that further licenses for installations anywhere on the island are to be avoided as a result of this technology’s tendency to proliferate and considerable environmental impact.

EDEY promoting new Crete-Ionian tender, now ‘imminent’

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An official announcement of a new international tender to offer exploration and exploitation rights for  blocks off Crete and in the Ionian Sea could be announced withn the current week, energy minister Giorgos Stathakis suggested yesterday.

The minister was responding to a question as to why yesterday’s signing of an agreement between the Greek State and a consortium comprised of ELPE (Hellenic Petroleum), Total and Edison for the rights to offshore Block 2, west of the Ionian island Corfu, did not coincide with an announcement of the new Crete-Ionian Sea tender, as had been anticipated by certain officials.

Bureaucratic procedures in Brussels are believed to have held up the process.

EDEY, the Greek Hydrocarbon Management Company, is already preparing for the announcement with a promotional campaign, already in progress.

Just over a week ago, EDEY’s deputy chief Spyros Bellas attended an AAPG/SEG (American Association of Petroleum Geologists/ Society of Exploration Geophysicists) international conference and exhibition held in London, to head a Greek booth.

It drew considerable attention from investors. Some 25 presentations were made to international oil companies, including Noble Energy, Anadarko Petroleum and Chevron.

Bellas, the EDEY deputy, is scheduled to return to London next week for a private oil industry meeting, held every three months and involving highly-ranked industry authorities. Information is exchanged and new partnership and investment opporunities are explored at these meetings. Next week’s oil scouters session will focus on southern Europe and north Africa.

The imminent Crete-Ionian Sea international tender was prompted as a result of an interest expressed by two consortiums, ELPE-ExxonMobil-Total and Repsol-Energean.

EDEY is aiming to broaden the interest and create conditions that could lead to fiercer bidding for exploration and production licenses.

 

Crete offshore blocks tender set for EU gazette publication

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An international tender offering exploration and exploitation rights to offshore blocks southwest and west of Crete, as well as the Ionian, is expected to be published in the Official Journal of the European Union (OJ) within the next ten days, sources have informed.

The tender, announced on August 17, also needs to be published in the OJ, the EU’s official gazette of record, before the countdown for binding offers begins. Once published, interested parties will have 90 days to submit their offers to EDEY, the Greek Hydrocarbon Management Company.

Certain pundits have linked the anticipated speed-up of the tender’s publication to ExxonMobil’s Cretan interest and Greek Prime Minister Alexis Tsipras’s current official visit to the US for a meeting with President Donald Trump.

The interest expressed by ExxonMobil, joined by France’s Total and ELPE (Hellenic Petroleum) as consortium partners, prompted Greece’s energy ministry to proceed with the tender.

If no other investors emerge with offers, then the Greek State will move ahead and begin negotiations with this three-member consortium.

Italy’s ENI, which discovered Zor, the gigantic Egyptian gas field, is rumored to be interested in two Crete offshore blocks, one southwest, the other west of the island. The Italian firm has already established operations in Cyprus and is eyeing the wider southeast Mediterranean region.

‘ExxonMobil plans to invest €5bn for Crete exploration’

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Global oil industry giant ExxonMobil has committed itself to investing 5 billion euros for hydrocarbon exploration and exploitation in the Greek market, Economy and Development Minister Dimitris Papadimitriou told investors at the 12th annual London roadshow of Athens-listed firms, as part of the government’s wider effort to present Greece as a market now beginning to attact major investments.

The minister made reference to a series of foreign investment plans for the Greek market, including that of ExxonMobil.

Sources have confirmed the ExxonMobil intention to set aside 5 billion euros for investments in the Greek market, developments permitting.

An international tender offering exploration and exploitation licenses for offshore blocks west and southwest of Crete is still in progress, meaning that the minister’s reference to ExxonMobil does not represent a finalized investment plan. Rivals, such as Chevron, for example, could suddenly emerge with a better offer, or the tender could sink.

ExxonMobil has joined forces with France’s Total and Greece’s Hellenic Petroleum (ELPE) for the Crete tender.

It should also be reminded that, besides Prinos, in the country’s north, no other location in Greece has yet to produce confirmed hydrocarbon deposits. All is still at a speculative stage.

By comparison to Papadimitriou’s hasty remarks concerning ExxonMobil’s investment plan for Greece, energy minister Giorgos Stathakis has remained far more reserved.

Bidders for the Crete hydrocarbon international tender, offering two offshore blocks, one south of the island, the other southwest, measuring nearly 40,000 square kilometers in total, face a December deadline.

Offers will need to be submitted to EDEY, the Greek Hydrocarbon Management Company. According to the tender’s terms, bids will be appraised within 60 days of the deadline and contracts signed within 60 days of the appraisal’s completion.

 

ExxonMobil looking to set up regional office base in Greece

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Highlighting ExxonMobil’s growing interest in Greece’s hydrocarbon market, the global oil industry powerhouse is reportedly looking to set up an Athens office ahead of an international tender offering exploration and exploitation licenses for offshore blocks west and southwest of Crete, sources have informed.

This tender was prompted by investment interest expressed in the aforementioned areas by a consortium comprised of ExxonMobil, Total and ELPE (Hellenic Petroleum).

According to sources, ExxonMobil wants to provide an operating base for a team of company officials to work on the upcoming Crete tender as well as other possible investments in Greece and neighboring countries.

A highly-ranked ExxonMobil official traveled from Houston, Texas to attend an energy conference held just days ago in Alexandroupoli, northeast Greece. The US Ambassador to Greece, Geoffrey R. Pyatt, who also took part in the event, spoke favorably of the US firm’s interest in the Crete hydrocarbon tender.

ExxonMobil already maintains a strong presence in the wider east Mediterranean region. Last December, the US oil firm and Qatar Petroleum were declared the winning bidders of Cyprus’s Block 10, southwest of the island. A few days ago, this consortium announced that it plans to stage two drills in 2018.

ExxonMobil is believed to consider the east Mediterranean as one of the world’s most promising new hydrocarbon regions. The discovery of Zohr, a gigantic deposit in Egypt’s maritime zone, has proven to be a game changer for the hydrocarbon prospects of the wider region. The development is seen as a pivotal factor behind ExxonMobil’s decision to become involved in the Greek hydrocarbon market.

 

New hydrocarbon technologies ‘boosting sustainability’

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The Greek Hydrocarbon Management Company (EDEY) is examining the prospect of staging more international tenders, driven by the belief that new technologies are making related investments sustainable despite lower petroleum prices, the company’s chief executive Yiannis Bassias has told industry publication GeoExPro.

Offshore areas southwest of Crete and in the Ionian Sea represent a stable part of the wider east Mediterranean region, compared to other troubled areas, Bassias stressed in the interview.

The Zohr (Egypt) and Aphrodite (Cyprus) natural gas field discoveries in the east Mediterranean have established Greece’s western flank as a key center of oil investor interest, he added.

The EDEY chief pointed out that a plan to reprocess seismic data promises to unlock mineral resources in the country’s offshore areas.

Bassias noted that 12,500 square kilomoters of 2D seismic data collected by Norway’s PGS in 2012 is being reprocessed. The first batch of results is expected within the current month, further findings are expected in January, while the entire reprocessing initiative should be completed next June, the EDEY head informed.

The company is also considering collecting new 3D seismic data in the Ionian Sea’s north, including west and south of Corfu, Bassias informed. He expressed support for the collection of more detailed data in an area south of Crete covering 4,000 square kilometers.

Greece’s western side has emerged as a strategically significant corridor, as is highlighted by the number of natural gas pipelines hosted in the area, such as the TAP project, now being constructed and planned to run across northern Greece, Albania and the Adriatic Sea to Italy, the EDEY chief noted.

Bassias admitted that oil exploration ventures off Crete remain a high-risk investement promising high returns.

Initial PGS seismic survey reprocessing results anticipated within September

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A reprocessing initiative taken by EDEY, the Greek Hydrocarbon Management Company, for older seismic survey data collected by Norway’s PGS in the Ionian Sea and off Crete, covering a total of 12,500 square kilometers, is expected to produce its first results this month, the hydrocarbon company has announced.

EDEY has signed a data reprocessing agreement with PGS, which will strive to complete the project by June, 2018. Once obtained, the reprocessed data should enable the Greek State to provide more detailed information to prospective hydrocarbon investors and, ultimately, increase the likelihood of successful exploration ventures by oil companies.

More sophisticated equipment, offering clearer pictures of existing data and the aforementioned submarine areas, is being applied in the reprocessing effort.

In addition, EDEY is now conducting preliminary work for 3D seismic surveys covering 2,000 square kilometers in the northern part of the Ionian Sea, southwest of Corfu, while densification of existing 2D data is planned for areas south of Crete and south of the Peloponnese, covering a total of 4,000 square kilometers.

Tenders stir up interest amid survey purchase complaints

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Licences to be offered by the Greek State for exploration and exploitation of offshore blocks in the Ionian Sea and off Crete now appear to be drawing wider attention following an initial interest displayed by investors that prompted authorities to organize three tenders.

However, prospective investors are believed to be discontent with a term requiring them to purchase existing seismic surveys. The terms of the upcoming tenders were recently published in the local gazette.

Initial interest expressed by a consortium comprised of ExxonMobil, Total and ELPE (Hellenic Petroleum) for two blocks off Crete, one southwest, the other west, led authorities to announce a tender, while Energean Oil & Gas got the ball rolling for a third tender offering an Ionian Sea block.

Though new firms now entering the picture have yet to be named, authorities have noted that these are mid-scale and large-scale enterprises which have eyed the Greek market in the past.

Shell, Japex, Dana Petroleum, INA and Hunt are believed to be among the oil companies maneuvering ahead of the tenders.

The sale procedures are expected to be launched towards the end of September, when published in the Official Journal of the European Union. Investors will then have 90 days to submit their offers. Greek authorities will push for the appraisal procedure of offers to have been completed by early 2018.

Prospective investors have expressed objections against a term requiring all participants to purchase existing seismic surveys concerning their respective areas of interest. PGS has conducted surveys covering 12,347 square kilometers of offshore Greek territory.

A number of sources told energypress that investors should have the right to conduct their own seismic surveys and then purchase the PGS data as additional information only if needed.

It is estimated that the cost of purchasing seismic surveys concerning the Ionian Sea block is roughly two million euros, while the price tag for the seismic surveys linked to the two blocks off Crete is estimated at five million euros.

 

 

Crete, Ionian oil exploration tender officially announced

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Greek authorities have officially announced an international tender offering exploration and exploitation licenses for offshore blocks west and southwest of Crete.

The tender was prompted by investment interest expressed in the aforementioned areas by a consortium comprised of ExxonMobil, Total and ELPE (Hellenic Petroleum).

As was expected, leasing agreements will be offered to investors. Taxation rates of 20 percent will be included in the terms, along with a 5 percent regional tax.

According to the international tender’s terms, bid appraisals will be processed over 60 days and agreements signed 60 days after this stage has been completed. This essentially means that the procedure should be completed at the end of this year, or, possibly, early in 2018, assuming no extraordinary delays.

Hydrocarbon licensing changes avoided ahead of Crete tender

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The government has softened its stance on an intention to implement hydrocarbon sector revisions that could offer investors production sharing agreements rather than leasing agreements for new tenders.

Governmemt officials fear that such changes to the licensing system would undermine the prospects of future tenders, including an imminent effort aiming to offer investors blocks off Crete. This upcoing effort has drawn the attention of international oil industry giants such as ExxonMobil and Total.

KYSOIP, the Government Council for Economic Policy, which yesterday endorsed a hydrocarbon sector modernization plan forwarded by energy minister Giorgos Stathakis, decided to keep the current licensing model unchanged – at least for the time being.

The minister’s modernization plan will aim to reduce the amount of time needed by authorities to issue exploration and exploitation licenses.

Though any imminent hydrocarbon leasing model changes should not be expected following yesterday’s KYSOIP decision, future revisions, which would make the Greek State a partner in oil exploration and exploitation ventures, along the lines of models applied in African, Latin American and Central Asian countries, cannot be ruled out.