New ExxonMobil talks for energy deputy on Crete plans

Deputy energy minister Alexandra Sdoukou will be holding talks with a top-ranked ExxonMobil official for the second time in ten days, focused, once again, on Crete’s offshore exploration prospects, when she meets with Dr. John Ardill, Vice President of Global Exploration at ExxonMobil, on the sidelines of the EGYPES energy conference in Egypt.

The event, being staged tomorrow and Wednesday, is expected to attract major players of the international energy market.

Sdoukou held talks on February 9 with Rochdi Younsi, ExxonMobil’s Vice President of International Government Affairs Division, at the company’s Washington office.

At EGYPES, Greece will be represented by Sdoukou, the deputy energy minister; Aristofanis Stefatos, chief executive officer at EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company; as well as Anastasios Vlassopoulos, CEO at Helleniq Upstream.

At the recent Washington meeting, Greece’s deputy energy minister discussed the next steps of a joint plan for procedures to lead to a final investment decision from ExxonMobil for drilling at offshore blocks south and southwest of Crete.

Initial results of 2D seismic surveys conducted by the ExxonMobil-Helleniq Energy consortium at these offshore Cretan plots are expected in March, when the consortium plans to inform the Greek government.

Crete seismic survey results, looking promising, in March

Initial results of 2D seismic surveys conducted by the ExxonMobil-Helleniq Energy consortium at plots off Crete are expected in March, when the consortium plans to inform the Greek government.

If these early results are promising, the ExxonMobil-Helleniq Energy consortium is expected to seek permission from the Greek government to conduct exploratory drilling.

Back in 2022, Prime Minister Kyriakos Mitsotakis, during a visit to the headquarters of EDEY – now reformed to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company – had announced that the country needs clarity on whether it possesses exploitable deposits. The time to know is now approaching.

Greece’s hydrocarbon prospects could go either way, though, according to some sources, preliminary results are encouraging enough for the ExxonMobil-Helleniq Energy consortium to seek permission for exploratory drilling.

Interest in EDEYEP’s program, announced over a year ago, for 2D and 3D seismic surveys at a total of six blocks, both onshore and offshore – in Corfu, the Ionian Sea, Ioannina, the Gulf of Kyparissia, and west and southwest of Crete – is now heating up again.

At present, the two offshore Cretan blocks surveyed by the ExxonMobil-Helleniq Energy consortium are attracting most interest. It has been rumored for quite some time now that Chevron, the world’s second-biggest producer of natural gas, is interested in joining this consortium.

Quite clearly, if expectations are fulfilled and rumors of significant recoverable hydrocarbon deposits are confirmed, Greece’s energy landscape will be completely reshaped.

The Cretan offshore blocks are situated at a distance from sea areas claimed by Libya, which, last January, had expressed mild protest against seismic surveys conducted southwest of Crete on behalf of the ExxonMobil-Helleniq Energy consortium.

The Greek Foreign Ministry responded by informing the Tripoli government that these seismic surveys took place in areas under Greek jurisdiction, in accordance with rules of the International Law of the Sea.

Offshore Crete drilling decision in 2024, signs encouraging

ExxonMobil and Helleniq Energy, the holders of offshore licenses west and southwest of Crete, are awaiting the results of seismic surveys completed by Norwegian geophysical company PGS in February before deciding, within 2024, whether to take a next step and conduct exploratory drilling.

The partners are expected to reach a decision within the next twelve months.

Officials at EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, have already noted preliminary results of surveys are encouraging.

Drilling is unlikely over the next year, but if all goes smoothly, such work is expected to be carried out in 2025, unless the license holders opt to also conduct 3D seismic surveys, in which case drilling would be postponed until 2026.

 

Ruptured Israeli-Turkish ties to reshape regional energy map

The rupture in Israeli-Turkish ties, vanishing any hope of Turkish president Recep Tayyip Erdogan’s unlikely proposal for the transfer of Israeli gas to Europe via a Turkish transit route, threatens to rebalance ties in the wider region and reshape the east Mediterranean’s energy map. Hydrocarbon exploration plans and major projects in the east Mediterranean will be impacted.

As an initial consequence, Erdogan’s open support for Hamas in the Israel-Gaza war ends any hope of Turkish collaboration with Israel on energy interests for a very long time.

Up until the outbreak of the Israel-Gaza war earlier this month, the Turkish president had seized on every opportunity to claim a role for Turkey as a constructive player on the east Mediterranean’s energy map.

Erdogan had proposed a closer energy partnership with Israel during a meeting with Israeli prime minister Benjamin Netanyahu in New York last month, even though such a prospect would have been highly improbable, given Israel’s mistrust of Turkey.

The latest deterioration in Israeli-Turkish ties provides Cyprus and Greece with an opportunity to establish themselves as trusted transit partners for transportation of Israeli natural gas to Europe.

Turkey could now reemerge as an aggressive player in the region, which could prompt Ankara to engage in illegal hydrocarbon exploration and drilling at undefined areas, as was the case in 2020, or even obstruct exploration and drilling plans by ExxonMobil consortium off Crete, testing Greek-Turkish ties.

Energy crisis brings fossil fuels back to the forefront

The energy crisis has brought about a revival of the hydrocarbons sector, as highlighted by a growing number of energy companies that have decided to reactivate exploration and production projects that had been put on hold as a result of climate-target pressure. Much of this reignited upstream activity is occurring in Europe. Greece must not be left behind.

Yesterday, French oil and gas giant TotalEnergies announced it would boost fossil fuel output over the next five years, a contrast to its reduced production in recent years.

Earlier in the week, on Wednesday, the UK’s North Sea Transition Authority approved plans for production at the new Rosebank oil and gas field in the North Sea, estimated to contain approximately half a billion barrels of oil.

Norwegian upstream giant Equinor, holding the biggest stake in the Rosebank field, estimates production will begin in 2030, with initial investments seen reaching roughly 3.8 billion dollars before totaling approximately 10 billion dollars by 2051.

Two two months earlier, UK Oil & Gas Plc had announced it would recommence production at its Avington oil field, estimated to contain 60 million barrels. Production at this field had been disrupted at an embryonic stage six years ago, with output having reached just several hundred thousand barrels.

In late August, Norway, which has captured the biggest share of Russia’s lost natural gas supply to the EU, announced that a latest round of tenders for licenses at 92 locations, 78 in the Barents Sea and 14 in the Norwegian Sea’s northwest, had attracted interest from 25 companies, including majors such as Shell, ConocoPhillips, Equinor and Aker BP.

The heightened interest expressed by majors highlights a turnaround of their green-focused investment policies of recent years. Shell, for instance, has announced it will disrupt an investment cutback plan of between 1 and 2 percent, annually, until 2030, adding it will increase investments in natural gas.

The hydrocarbons sector is also making a comeback in regions closer to Greece, Italy being a prime example. Italy had stopped issuing new licenses for many years but took a turn in November, when officials announced the country will be holding tenders offering ten-year licenses that offer total production potential of 15 bcm in natural gas from deposits in the Adriatic Sea.

Quite soon, companies operating in Greece will receive results from seismic surveys conducted west and southwest of Crete (ExxonMobil – HelleniQ Energy); Gulf of Kyparissia (Helleniq Energy); Ionian Sea (HelleniQ Energy); and Northwest Ionian (Energean – HelleniQ Energy).

In addition, Energean is awaiting an environmental permit to proceed with exploratory drilling in the Zitsa area, close to Ioannina, northwestern Greece.

Given the international developments and Greece’s energy needs – 6 bcm of natural gas a year and 300 barrels of oil per day – imported at lofty prices, the Greek State must facilitate, it has become clear, the endeavors of companies seeking to move ahead with their projects.

ExxonMobil-Helleniq Energy offshore Crete surveys done

Norwegian geophysical company PGS has completed 2D seismic survey work west and southwest of Crete on behalf of the ExxonMobil-Helleniq Energy consortium, holding licenses for blocks in the two areas.

Results offering a picture on the hydrocarbon prospects at these offshore Cretan areas are expected to be ready in approximately one years’ time, sources informed.

PGS’ Sanco Swift vessel spent nearly three-and-a-half months conducting seismic surveys at the two offshore blocks, measuring a total of 40,000 square kilometers, to collect data that will now be examined at the company’s specialized labs.

According to sources, PGS collected more than double the required seismic survey data for the ExxonMobil-Helleniq Energy consortium following an agreement with EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

The PGS vessel scanned 13,000 square kilometers of offshore territory, double the 6,500 square meters specified in the consortium’s license (3,250 square meters for each block).

Ensuing and more detailed 3D scans by the ExxonMobil-Helleniq Energy consortium at these blocks has not been ruled out, sourced noted. If so, this follow-up effort would take place during the final two months of 2023 or early in 2024, the sources added.

However, ExxonMobil, the consortium’s chief partner, is most likely to skip this stage and move straight on to drilling if the 2D seismic results are favorable.

 

PM: ‘Greece aiming to become energy exporter, energy security provider’

Greece is aspiring to become an energy exporter and energy security provider, Prime Minister Kyriakos Mitsotakis has told members of the national Japanese business organization KEIDANREN during an official visit to Japan, the first by a Greek leader in 17 years.

Mitsotakis, heading a Greek delegation on a visit aiming to attract Japanese investments, told KEIDANREN members Greece has a significant role to play in Europe’s new energy structure now being developed.

This role is based on new infrastructure transforming the country into an energy hub, Greece’s prospective provision of energy security to the wider region, ongoing hydrocarbon exploration efforts, as well as investments for an increased RES-sector share of the country’s energy mix, the Greek leader noted.

“We are investing heavily in regasification facilities, especially in northern Greece. And we aspire to become an energy exporter and an energy security provider, at least for our Balkan neighbors,” the Prime Minister noted. “For the first time, we are actively exploring for potential natural gas deposits southwest of Crete. The exploration is being led by ExxonMobil and the initial findings are very, very promising,” he added.

Greece is one of the world’s ten biggest RES electricity producers, Mitsotakis pointed out while commenting on the significant role the country has to play in the new RES landscape developing in Europe.

Japan possesses the world’s biggest fleet of LNG tankers, in terms of value, according to 2022 data provided by Vessels Value, an internationally recognized data platform for ship valuations.

Japan’s LNG fleet was worth 30.3 billion dollars last year, the world’s highest, followed by Greece, at 29.9 billion dollars and South Korea, at 17.1 billion euros, according to Vessels Value figures.

 

Crete hydrocarbon hopes lifted by initial seismic survey results

Initial findings of ongoing seismic surveys conducted at licenses off Crete have raised hopes of significant hydrocarbon discoveries, government officials have told an event staged by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

If the upbeat prospects generated by emerging data are confirmed during drilling, then quantities to be extracted off Crete will cover Europe’s projected energy insufficiencies, government officials contended on the sidelines of the EDEYEP event, staged last night to mark its transition from EDEY, the Greek Hydrocarbon Management Company.

A recent report released by IEA, the International Energy Agency, notes Europe will face annual energy shortages of 30 billion cubic meters for ten years, even if renewables, biogas and hydrogen are brought in to replace Russian natural gas quantities.

Norwegian company PGS is currently conducting 2D surveys at offshore blocks west and southwest of Crete on behalf of ExxonMobil and Helleniq Energy, formerly ELPE.

Local authorities expect drilling at these licenses to commence in early 2025.

Domestic upstream activity has increased, EDEYEP president Rikard Skoufias told the company event, noting seven seismic surveys have been staged in Greece over an eight-month period compared to just two over the past decade.

 

PM rules out new tender for hydrocarbon licenses

Prime Minister Kyriakos Mitsotakis, fielding questions at a news conference yesterday, ruled out the possibility of any new international tender for additional licenses concerning onshore or offshore hydrocarbon exploration.

“We are not considering exploring other areas,” the Prime Minister informed, responding to a related question.

Reignited hydrocarbon exploration activity for natural gas deposits in Greece had generated rumors the government would consider staging additional tenders to grant new licenses for exploration south of Crete as well as at an offshore area between the island and the Peloponnese.

Commenting on the progress of surveys being conducted west and southwest of Crete by a consortium comprised of ExxonMobil and Helleniq Energy, formerly ELPE, the Greek Prime Minister said a clearer picture is expected towards the end of the year.

The ExxonMobil-Helleniq Energy consortium may extend the duration of its 2D seismic surveys at these blocks until the end of the first quarter to collect additional data. This could result in greater clarity and enable the consortium to skip the need for 3D surveys.

Elsewhere, Energean and Helleniq Energy are also pressing ahead with respective licenses in the Ionian Sea. Both companies have completed seismic surveys and expect to have received results towards the fourth quarter.

Energean holds a license for an offshore block northwest of Corfu and Helleniq Energy holds two licenses, Ionio and Kyparissiakos (Gulf of Kyparissia).

 

Bureaucracy, elections troubling upstream sector in Greece

ExxonMobil, Energean and Helleniq Energy, formerly ELPE, all conducting hydrocarbon surveys at Greek licenses, have not only stuck to their schedules but even taken initiatives to speed up procedures for sooner-than-expected drilling. Even so, two factors beyond their control, namely bureaucracy and imminent elections, may hold up their plans.

Energean skipped 2D surveys at its Block 2 offshore license in the Ionian Sea’s northwest, moving straight on to 3D surveys.

Hellenic Energy moved swiftly in 2022 to complete 2D and 3D seismic surveys at two offshore licenses, Ionio and Block 10, both in the Ionian Sea.

ExxonMobil is considering to start drilling sooner than originally planned at its offshore Cretan licenses. As a result, it is staging more comprehensive 2D surveys for a clearer picture of geological details.

State bureaucracy is an obstacle for upstream companies operating in Greece. The overall procedure concerning social and environmental impact studies, which require energy ministry approval ahead of drilling, requires at least eight months to be completed.

Then, upstream companies usually require a further six months or so to make arrangements for drilling rigs, configure sites and identify a port or base area for their drilling rigs.

The uncertainty created by the upcoming Greek elections, expected within the first half of the year, is another factor troubling the efforts of upstream companies.

 

ExxonMobil drilling for gas off Crete may begin a year earlier

ExxonMobil could begin drilling at licenses offshore Crete a year earlier than planned as the American energy giant tends to adopt a more direct approach when exploring for natural gas, sector authorities have noted.

Such was the case at Cyprus’ Block 10, for which ExxonMobil conducted seismic surveys before skipping the 3D survey stage to go straight ahead with drilling that led to the discovery of the Glafkos deposit, the officials pointed out.

A consortium comprised of ExxonMobil and Helleniq Energy, formerly ELPE, holds licenses for two offshore Crete blocks, one west of the island, the other southwest. The consortium has commissioned PGS to conduct 2D seismic surveys at both these licenses. They are in full progress and are expected to be completed towards the end of January.

According their original plan, ExxonMobil and Helleniq Energy planned to follow up with 3D surveys at the end of 2023 or early in 2024. However, if ExxonMobil, the consortium’s operator, opts to skip the 3D surveys, initial drilling offshore Crete will begin sooner, in 2024, instead of 2025.

Elsewhere, in the Ionian Sea, a consortium made up of Helleniq Energy and Energean expects to have the results of 3D surveys at three blocks, Ionio, Kyparissiakos, and Block 2, by the end of 2023 or early in 2024. It will then decide if it will continue with initial drilling.

 

Helleniq Energy set for 3D surveys off Greece’s west

Helleniq Energy is preparing to conduct 3D seismic surveys at two licenses, block 10 in the Gulf of Kyparissia, west of the Peloponnese, and the “Ionio” block in the Ionian Sea, within the next few weeks, chief executive Andreas Siamisiis has told analysts during a presentation of the group’s financial results for the nine-month period.

Helleniq Energy, which recently underwent a name change from ELPE (Hellenic Petroleum), had previously conducted 2D surveys at these two blocks last February. Its decision to take a step further with 3D surveys at the two licenses suggests a clearer picture of promising targets already identified is needed.

The energy group’s decision to move ahead with its hydroexploration plans reflects the overall determination of the government, HEREMA, the Hellenic Hydrocarbons and Energy Resources Management Company, and investors to press ahead with exploration programs to identify potential targets with natural gas reserves.

Elsewhere, Energean is pushing ahead with its survey work at block 2 in the Ionian Sea, adjacent to Italian territory in the Adriatic Sea.

In addition, an ExxonMobil-led consortium involving Helleniq Energy as a junior partner is moving rapidly with survey work at two offshore block licenses west and southwest of Crete.

 

Offshore Crete seismic surveys pave way for drilling in 2025-26

A consortium headed by ExxonMobil plans to begin conducting seismic surveys at licenses south and southwest of Crete this winter, Prime Minister Kyriakos Mitsotakis announced yesterday, confirming previous energypress reports.

The timing of the prospective surveys is in line with a schedule announced earlier this year by HEREMA, the Hellenic Hydrocarbons and Energy Resources Management Company, which envisaged surveys for the winter of 2022-2023.

The seismic surveys are expected to be followed by higher-definition 3D surveys in 2024. If all goes according to plan, initial drilling at the offshore Cretan blocks could take place in 2025 and 2026, which, if successful, would result in development of hydrocarbon deposits in 2027, leading to production in 2029.

ExxonMobil increased its stake in a consortium holding licenses for two offshore Cretan blocks following a recent decision by France’s TotalEnergies to withdraw from the venture. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator. Helleniq Energy, formerly named ELPE, is the venture’s junior partner.

Older seismic surveys conducted in 2015 by Norway’s PGS for Helleniq Energy – operating, at the time, as ELPE – at the two offshore Cretan blocks south and southwest of the island showed promising signs of a major natural gas deposit.

 

Greece advances its upstream gas exploration program

Following an announcement by Prime Minister Kyriakos Mitsotakis and successful geophysical surveys conducted in early 2022 in the Central and South Ionian, Greece’s national hydrocarbons and energy resources corporation, HEREMA, today announced the next steps in the country’s upstream exploration programme with the acquisition of a 3D seismic survey in the North Ionian Sea (block 2), and 2D seismic surveys West and South/West of Crete.

In April, the Prime Minister announced the country’s accelerated timeframe to explore Greece’s upstream potential, with focus on natural gas and the expansion of HEREMA, which today oversees upstream exploration, greenhouse gas management & sequestration, gas storage, offshore wind and international pipeline projects.

The surveys will take place during the winter months ahead, in order to minimize any environmental impact, and will be conducted in accordance with the best-in-class standards for environmental protection, including:

  • Use of the “soft start” protocol to ensure that marine mammals can temporarily depart from the seismic survey area prior to its commencement.
  • Doubling of marine mammal observers onboard the seismic survey vessel to ensure protection of cetaceans and other marine life within the safety zone.
  • Extension of the safety zone radius around the seismic survey vessel in case of detection of large marine animals.
  • Waiting period 30 minutes before the start and stop of each exploration activity.
  • Passive acoustic monitoring of underwater sounds for the measurement of sea noise levels and the detection of marine mammals.
  • Application of a 1 km exclusion zone around the “Natura” areas as well as fish farms.
  • Airborne monitoring of cetaceans during and after seismic surveys.
  • Full compliance with all applicable regulations and guidelines in accordance with MARPOL VI and ACCOBAMS conventions and JNCC guidelines.

Compliance with the above measures and all relevant procedures shall be ensured by the presence on board the research vessel of independent observers from HEREMA. Furthermore, during the surveys experienced specialized personnel is in constant communication with the involved local and regional port authorities as well as with the commercial and fishing vessels that sail near the survey areas in order to ensure the smooth execution of both the geophysical surveys as well as the daily activities in the specific areas.

Aris Stefatos, CEO of HEREMA, commented “we are very happy to announce this progress in line with the plan we announced with the Prime Minister earlier this year. International investors and partners in both conventional and renewable energies have reacted very positively to that plan. In August we welcomed ExxonMobil as new operator in Crete, and the pace at which we progress is evidence of our excellent cooperation with leading energy companies and service providers, such as ExxonMobil, Helleniq Energy, Energean, and PGS — a leading global seismic acquisition and processing company.”

Rikard Scoufias, Chairman of HEREMA hailed the progress and said “this marks another important milestone in our strategy to monetize Greece’s natural gas resources and our efforts to accelerate the transition to a more sustainable energy mix and strengthening security of supply. Greek natural gas can play an important role — not only for Greece, but also in support of the broader region and Europe’s increasing demand for domestic energy resources at a crucial time for energy security.”

HEREMA Profile

Hellenic Hydrocarbons and Energy Resources Management S.A. (HEREMA S.A.), formerly HHRM, is Greece’s independent State-owned company responsible for managing the country’s hydrocarbon resources. Following the appointment in 2020 of new leadership for the company, HEREMA’s strategic remit has been expanded and today encompasses the upstream sector, greenhouse gas management & sequestration, gas storage, international pipeline projects (including the EastMed pipeline, and the recently completed IGB interconnector), and offshore wind.

 

 

ExxonMobil-Helleniq Energy seismic surveys off Crete

US oil and gas corporation ExxonMobil has been conducting seismic surveys under complete secrecy and at a rapid pace over the past week or so at two offshore block licenses, west and southwest of Crete, held with Helleniq Energy, formerly named ELPE, as its junior partner.

The two blocks share similar geological traits with Egypt’s giant offshore Zohr gas field and, according to early estimates, may contain rich natural gas quantities.

American presence is being assured, through ExxonMobil, in the southeast Mediterranean region at a particularly critical geopolitical period, both because of the Russian invasion of Ukraine and Turkey’s provocative moves against Greece (aggressive rhetoric and the Libya pact), political analysts told energypress.

ExxonMobil acted swiftly to increase its stake in a consortium holding licenses for the two offshore Cretan blocks following a recent  decision by France’s TotalEnergies to withdraw. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator.

The ExxonMobil-led seismic surveys off Crete, which began on October 24, are being conducted by Norway’s PGS and the company’s Sanco Swift seismic vessel. It is conducting 3D surveys, meaning ExxonMobil is focusing on specific areas for possible natural gas deposits.

Crete’s Hydrocarbon Potential to be Unveiled by the End of 2023⏐Upstream Development Programme in Full Swing⏐HEREMA’s Role in the Advancement of Offshore Windfarms

Greece’s upstream exploration programme offshore Crete is proceeding without delays, with a first assessment of the two concessions’ natural gas potential expected by the end of 2023. This was the message delivered by the CEO of the Hellenic Hydrocarbons and Energy Resources Management Company (HEREMA), Aris Stefatos, during a press conference held alongside the company’s Chairman Rikard Scoufias. 

Following the withdrawal of TotalEnergies earlier this year from the blocks dubbed “West of Crete” and “Southwest of Crete”, U.S. energy giant ExxonMobil significantly upped its stake in both concessions, raising this from 40% to 70% for E&P activities, while also assuming the operatorship. Likewise, Greece-based Hellenic Petroleum increased its participation in both areas from 20% to 30%.

ExxonMobil has prepared an upgraded work programme for the first phase of upstream exploration activities – anticipating faster and higher quality results – with delivery expected within a 2-year period instead of the 3 years companies have at their disposal for said exploration stage.

According to Stefatos, any delays in the Cretan concessions can be attributed to the fact that the previous operator did not complete the minimum work programme within the stipulated three-year term. He added that HEREMA’s exploration program is well underway, in accordance with the company’s underlying strategy “Hydrocarbons 2.0”, underpinned by three pillars:

  • Accelerating the development of Greece’s upstream sector with a particular focus on natural gas.
  • Expanding the scope of HEREMA to new energy technologies that can support Greece’s country’s energy transition.
  • Strengthening governance and ensuring HEREMA has the capacity and resources to meet all aspects of its mandate.

Regarding the first pillar, in February 2022 the leadership of HEREMA launched an ambitious investor outreach programme targeting energy majors.  The company’s management noted that the results so far have being particularly encouraging.

Discussions are ongoing with companies that have expressed an interest in entering the Greek upstream sector, with priority being placed on concessions where there is a single investor. While Mr. Stefatos confirmed that another licensing round is not off the table, he stressed the importance of drawing in investors to pre-existing concessions.

HEREMA is also set to play a key role in the development of offshore wind parks in Greek seas, in accordance with its legally expanded work scope, leveraging upon the company’s wealth of expertise in offshore operations. It’s important to underline that offshore oil and gas installations boast strong similarities to the platforms used in offshore wind installations. To this end, the company is being strengthened with specialized technical personnel and the relevant logistical infrastructure to enable it to deliver upon its expanded remit.

HEREMA has been carrying out one-to-one discussions with interested parties, including potential domestic and foreign investors, in an effort to understand their concerns and priorities – deemed key for the development of Greece’s newly-established offshore wind sector. Last but not least, HEREMA recently inked a memorandum of cooperation with the Hellenic Centre for Marine Research (HCMR) focused on technical and environmental synergies.

Within the scope of new energy technologies, HEREMA’s expanded work scope additionally includes the licensing of carbon capture and storage (CCS) and underground gas storage (UGS) projects in Greece. Such projects could focus on the storage of natural gas and hydrogen in the future.  

Imminent key challenges 

While assessing key challenges moving forward, HEREMA’s Board of Directors underlined the importance of maintaining the momentum built during the last 12 months, while ensuring the company is provided with the necessary administrative and financial resources. Strengthening HEREMA’s capacity and resources is a primary challenge and will become even more critical as the company assumes its broader remit including natural gas storage, CO2 and greenhouse gas management, and supporting the offshore wind sector. It is noted that draft legislation for the modernization of HEREMA has been ready for adoption since January 2021 and will contribute to the creation of a more modern and efficient administrative framework.

More specifically, the board concludes “This is an important factor in maintaining investor confidence, but most importantly it serves to build an organisation with the staff, resources, and expertise required to manage a Greek “Hydrocarbons 2.0” programme that should only be initiated once the financial and human resources are in place to monitor and enforce the strictest standards for environmental protection and socio-economic impact management.” 

ELPE decision on Cretan offshore blocks within month or two

Hellenic Petroleum (ELPE) will finalize decisions on hydrocarbon exploration at licenses held for two offshore Cretan blocks, west and southwest of the island, within the next month or two, chief executive Andreas Siamisiis has told an annual shareholders’ meeting.

There has been confusion as to what the future holds for these offshore Cretan blocks following the recent withdrawal from their related consortium by Total, which held a 40 percent stake, along with US oil and gas multinational ExxonMobil, ELPE holding the other 20 percent.

Siamisiis, responding to questions on Total’s withdrawal from the Cretan venture, noted that participants were currently involved in talks, adding that a development is expected within the next month or two, without elaborating further.

Just weeks ago, Aris Stefatos, managing director at EDEY, the Greek Hydrocarbon Management Company, told state broadcaster ERT that Total’s withdrawal has prompted the need for another investor, suggesting a replacement is being sought for the Cretan offshore consortium.

Recent reports have indicated that ExxonMobil could also be on the way out from the consortium, which would further increase the need for a major investor.

Siamisiis, during the annual shareholders’ meeting, reiterated ELPE’s commitment for further seismic studies at both offshore Cretan blocks in an effort to determine their hydrocarbon prospects, even if ExxonMobil also withdraws from the consortium.

 

 

 

ExxonMobil, like Total, seems disinterested in Cretan blocks

American multinational oil and gas corporation ExxonMobil appears likely to follow the way of France’s TotalEnergies towards a possible withdrawal from two offshore blocks, west and southwest of Crete. The two companies each hold 40 percent stakes in these offshore licenses, Greece’s ELPE maintaining the other 20 percent.

Indications of a reduction in interest by the two corporations run contrary to  growing interest expressed by Greek officials for domestic exploration as a result of the EU’s decision to drastically reduce Europe’s reliance on Russian natural gas.

EDEY, the Greek Hydrocarbon Management Company, recently forwarded letters to these upstream companies, informing them of the Greek government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY officials declined to comment on the retreats by ExxonMobil and TotalEnergies but noted that a new round of talks for upstream investments is beginning. Other corporations are interested in Greece’s upstream sector, EDEY officials informed.

EDEY is determined to keep a tight schedule and secure seismic surveys at the two Cretan offshore areas this coming autumn and in spring, 2023.

Sanctions on Russia boost Greece’s upstream prospects

The EU’s revised natural gas strategy, seeking alternative solutions as a result of sanctions imposed on Russia, has created favorable conditions for Greece’s upstream sector as the Greek market could become a destination for upstream companies operating in Russia and now needing to shift.

EDEY, the Greek Hydrocarbon Management Company, has forwarded letters to upstream companies already maintaining interests in Greece, informing them of the government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY also intends to hold meetings with these upstream companies to determine their levels of interest in the Greek market and shape its actions accordingly.

Total and ExxonMobil maintain hydrocarbon interests in Greece as co-members of a consortium holding two offshore licenses, west and southwest Crete. The two companies each have 40 percent stakes in this consortium, Greece’s ELPE holding the other 20 percent.

The consortium, it is believed, aims to conduct seismic surveys next winter at the offshore Crete licenses, still at early exploratory stages.

Besides these two licenses, a further four licenses have been granted in Greece. Energean maintains an onshore block in the Ioannina area, northwestern Greece. The company also holds a 75 percent stake at Block 2, northwest of Corfu, with ELPE as its partner. Also, ELPE holds two offshore licenses in the west, Block 10 and Ionio.

These six licenses could generate total turnover of 250 billion euros by 2030, assuming a 20 percent success rate during exploration, according to a conservative forecast made by EDEY.

Drilling for natural gas to begin with licenses in country’s west

Exploratory drilling for natural gas deposits at a total of six licenses in Greece will begin in the country’s west with two Greek companies, Hellenic Petroleum (ELPE) and Energean, leading the way, according to the outcome of talks yesterday at the headquarters of EDEY, Greek Hydrocarbon Management Company, which were headed by Prime Minister Kyriakos Mitsotakis.

Drilling is expected to begin in mid-2023 at Energean’s onshore Ioannina block; followed, a year later, by drilling at Block 2, an offshore license northwest of Corfu that is held by Energean (75%) and ELPE (25%), following Total’s withdrawal; as well as Block 10 and Ionio, two offshore licenses held by ELPE.

Two further licenses, west and southwest of Crete, both held by a consortium that has brought together TotalEnergies (40%), ExxonMobil (40%) and ELPE (20%), are regarded as the most promising of all six licenses but, at the same time, are the least developed in terms or preliminary exploratory work. The consortium aims to conduct, next winter, seismic surveys covering 6,500 square kilometers.

Energean has already conducted a seismic survey at its Ioannina block, the most developed of all six licenses in Greece, and has set a drilling target.

ELPE to seek Ionian Sea partner, Crete delayed by case

Hellenic Petroleum ELPE has successfully completed seismic surveys at offshore blocks in the Ionian Sea and the Gulf of Kyparissia, west of the Peloponnese, for which the company holds 100 percent exploration and exploitation rights, and once results have emerged, will seek to establish partnerships for these ventures, CEO Andreas Siamisiis noted yesterday.

The chief executive, who was speaking at ELPE’s official launch for a solar energy farm in Kozani, northern Greece, one of Europe’s biggest, informed that the group’s hydrocarbon exploration activities for potential natural gas deposits, part of the group portfolio, will focus on offshore areas and be accelerated.

The results of data collected through seismic surveys at the Ionian Sea and Gulf of Kyparissia blocks will now be studied, while 3D seismic data will also be collected, a procedure to require a further 12 months.

As for ELPE’s interests at Cretan offshore blocks, for which the company has formed a consortium with France’s Total and America’s ExxonMobil, surveys conducted have shown similarities with areas in the eastern Mediterranean, where major hydrocarbon discoveries have been made.

ELPE’s chief executive attributed delays affecting exploration work at the Cretan blocks to a legal case filed with the Council of State, Greece’s Supreme Administrative Court, targeting the venture’s environmental impact study. No serious company would continue exploring with such a legal case pending, Siamisiis noted.

 

 

New Supreme Court hearing delay for Crete offshore licenses

A court hearing concerning a legal case filed by environmental groups challenging an environmental impact assessment for prospective hydrocarbon exploration at two offshore licenses, west and southwest of Crete, by a consortium consisting of Total, ExxonMobil and Hellenic Petroleum (ELPE), has been suspended for a fourth time since 2019 by the Council of State, Greece’s Supreme Administrative Court, which has set a new date, October 5, 2022, according to sources.

The latest delay comes as a setback for the three-member consortium, which faces a first-stage exploration deadline preceding the new trial date.

Total, ExxonMobil and ELPE have planned seismic surveys at the two licenses, believed to offer natural gas production potential, but the trio cannot proceed with any exploration activity unless it overcomes this legal challenge.

Authorities tasked with assisting the government in legal action taken by environmental groups are seeking to move forward the new trial date, for a swifter conclusion.

The latest court delay highlights fears previously raised by upstream officials believing the country’s official policy on hydrocarbon deposit utilization remains ambiguous.

It remains to be seen how Total, ExxonMobil and ELPE will react to the hearing’s latest delay.

Repsol transfer of Ioannina block stake to Energean done, 4 players left

Spain’s Repsol has completed its strategic withdrawal from the Greek hydrocarbon market with the finalization of a transfer of its 60 percent share in the onshore Ioannina block, northwestern Greece, to project partner Energean.

Energy minister Kostas Skrekas’ ministerial decision needed for the transfer’s finalization was published yesterday.

Repsol revealed its intention to withdraw from the Greek market early this year when the Spanish company and its partner for the Etoloakarnania block, Energean, both notified the Greek State and EDEY, the Greek Hydrocarbon Management Company, of their decision to return their Etoloakarnania block rights.

This was followed by the transfer of Repsol’s share in the Ioannina black to Energean in March, while, late in July, the Spanish company announced its decision to withdraw from an Ionian Sea block, its last remaining license in Greece.

Repsol’s new business plan will limit the company’s presence to just 14 of 34 markets in which it has maintained interests. Repsol has also set an objective to reduce its annual investments in the upstream sector from 2.4 billion euros in 2019 to 1.6 billion euros by 2025.

Besides Repsol, Hellenic Petroleum (ELPE) has also withdrawn from two onshore blocks, Arta-Preveza and Northwestern Peloponnese, made official on August 13.

Four investors remain active in Greece’s hydrocarbon exploration and production market, ELPE, Energean, France’s Total and the USA’s ExxonMobil, at a total of 11 licenses.

 

 

ELPE to abandon its onshore block licenses in country’s west

Hellenic Petroleum (ELPE) has decided to limit its presence in Greece’s upstream sector, driven by unfavorable market developments, sources have informed.

Spain’s Repsol recently also opted to surrender upstream rights in Greece.

ELPE intends to return to the Greek State its exploration and production licenses for two onshore blocks, Arta-Preveza and northwest Peloponnese, sources noted. The Greek petroleum company has deemed exploration activities in these specific areas as no longer being feasible, the sources added.

The company, in reaching its decision to withdraw from the Arta-Preveza and northwest Peloponnese blocks, also took into account negative reactions by local community groups as well as a series of bureaucratic obstacles, sources said.

The Greek State’s failure to deal with a lack of infrastructure at the port of Patras, close to these blocks in Greece’s west, is seen as a key factor in ELPE’s decision to withdraw from the Arta-Preveza and northwest Peloponnese blocks, despite promising seismic research results.

ELPE does not intend to surrender its interests in offshore blocks west and southwest of Crete. It is a co-member of consortiums with Total and ExxonMobil for these licenses.

The government is placing emphasis on renewable energy sources, foreign minister Nikos Dendias has just told Arab News.

 

Gas developments in the East Med

The international oil companies (IOCs) are still reeling under the impact of low oil and gas prices and massive losses and asset write-offs during 2020. ExxonMobil, under increasing pressure, is considering further spending cuts and even a shake-up of its board.

The path to full recovery will be slow and at the end of it, in 2-3 years, the IOCs will be different, placing more emphasis on clean energy and renewables.

In the meanwhile, around the East Med, Egypt is forging ahead. It has signed a new exploration agreement with Shell for an offshore block in the Red Sea. This is in addition to the 22 agreements signed during 2020 that included major IOCs such as ExxonMobil, Chevron, Shell, BP, Eni and Total. Moreover, EGPC and EGAS are planning to offer onshore and offshore exploration blocks for bidding in February.

This continuing activity led to the discovery of 47 oil and 15 natural gas fields in 2020, 13% more than in 2019, despite Covid-19.

Tareq El-Molla, Egypt’s petroleum minister, signaled earlier this month Egypt’s intention to expand its petrochemicals sector to take advantage of the country’s expanding hydrocarbon resources. Egypt has updated its petrochemical national plan until 2023 to meet the increasing prospects in this industry.

LNG exports

Egypt has also benefited from the recent increase in LNG prices, resuming exports from its liquefaction plant at Idku, with most exports going to China, India and Turkey. The country is also ready to resume exports from its second liquefaction plant at Damietta starting end February. This has been lying idle since 2012 due to disputes that have now been resolved.

LNG exports will mainly utilize surplus gas from the Zohr gasfield and possibly imports from Israel, should prices allow it.

In fact, the resumption of LNG exports from Idku relieved some of the pressure on Egypt’s gas market, which is in oversupply partly due to impact of the pandemic, but also due to falling gas demand in Egypt’s power sector and growth in renewable energy.

El-Molla said that Egypt is planning a revival of its LNG exports. But this depends greatly on what happens to global markets and prices.

The International Energy Agency (IEA) said that the Asian LNG demand and price spike in January was a short-term phenomenon and it is not an indicator that global demand will rebound in 2021. The IEA expects only a small recovery in global gas demand this year, after the decline in 2020, partly due to the pandemic. But given ongoing concerns over the pandemic, the rate of gas demand growth will remain uncertain. The IEA said the longer-term future of LNG markets remains challenging.

Gas from Israel

Chevron – having acquired Noble Energy and its interests in the region last year – with Delek and their partners in Israel’s Leviathan and Tamar gasfields, signed an agreement to invest $235million in a new subsea pipeline, expanding existing facilities. According to an announcement by Delek, the pipeline will connect facilities at Israeli city Ashod to the EMG pipeline at Ashkelon, enabling Chevron and its partners to increase gas exports to Egypt to as much as 7billion cubic meters annually (bcm/yr).

The partners signed agreements last year to export as much as 85bcm/yr gas to Egypt over a 15 year period. Gas supplies from Israel to Egypt started in January last year.

It is not clear at this stage if new agreements will be reached to fully utilize the increased export capacity from Israel to Egypt, but given Egypt’s gas oversupply this may not be likely.

These developments, though, show the vulnerability of Cyprus and the weakness of relying on trilateral alliances with Egypt and Israel for its gas exports.

EastMed gas pipeline

This is being kept alive by regional politicians. Only this week, Greece, Cyprus, Israel, Bulgaria, Hungary and Serbia confirmed their support for the EastMed gas pipeline.

While such developments are good politically, bringing like-minded countries around the East Med closer together, they are not sufficient to advance the project. This requires private investment and buyers of the gas in Europe. None of these is forthcoming, because the project is not commercially viable. By the time the gas arrives in Europe it will be too expensive to compete with existing, much cheaper, supplies.

Europe is also moving away from gas and from new gas pipeline projects. Catharina Sikow Magny, Director DG Energy European Commission (EC), covered this at the European Gas Virtual conference on 28 January. Answering the question how much natural gas will the EU need in the future, she said ZERO. She was emphatic that with the EU committed to net zero emissions by 2050, by then there will be zero unabated gas consumed in Europe. In addition, with the EU having increased the emissions reduction target from 40% to 55% by 2030, the use of gas in Europe will be decreasing in order to meet the 2030 and 2050 climate targets. She said that ongoing natural gas projects are expected to be completed by 2022 – with no more needed after that.

With exports to global markets becoming increasingly difficult, there are other regional options to make use of the gas discovered so far around the East Med, including power generation in support of intermittent renewables and petrochemicals, as Egypt is doing. The newly constituted East Med Gas Forum (EMGF) should place these at the heart of its agenda.

What about Cyprus?

Hydrocarbon exploration activities around Cyprus are at a standstill, partly due to the continuing impact of Covid-19, but also due to the dire state of the IOCs and the challenges being faced by the natural gas industry in general.

This lack of activity in resuming offshore exploration may be a blessing, taking the heat off hydrocarbons, while priorities shift to discussions to resolve the Cyprus problem and the Greece-Turkey maritime disputes.

Dr Charles Ellinas, @CharlesEllinas

Senior Fellow

Global Energy Center

Atlantic Council

3 February, 2021

 

Total, ExxonMobil, ELPE delay Crete surveys for next winter

A decision by the three-member consortium comprising Total, ExxonMobil and Hellenic Petroleum (ELPE) to conduct seismic surveys at two offshore blocks south and west of Crete in the winter of 2021-2022, instead of this winter, highlights the upstream market’s negative climate, both in Greece and internationally.

Upstream players, drastically cutting down on investments costs amid the crisis, have cancelled scores of investment plans, especially those concerning the development of new fields.

Based on the terms of its contract, the Total-ExxonMobil-ELPE consortium also had the opportunity to conduct seismic surveys at its Cretan offshore blocks this winter.

It should be pointed out that the consortium has yet to receive environmental approval for these blocks. Nor have these slots been included in an annual workplan delivered by EDEY, the Greek Hydrocarbon Management Company.

Even so, Total, ExxonMobil and ELPE do not appear prepared, under the current conditions, to increase their investment risk in the region.

Upstream projects awaiting Greek State reassurances

Local and foreign upstream companies holding exploration and production licenses for hydrocarbon reserves on Greek territory, offshore and onshore, are awaiting Greek State reassurances for their ventures following a cabinet reshuffle that has resulted in a change of leadership at the energy ministry, bringing in Kostas Skrekas in place of Costis Hatzidakis.

Oil companies, delaying investment plans as a result of the pandemic and lower oil prices, are waiting for a vote of confidence from the Greek State, market sources insist.

The fall in oil prices, currently at levels of about 50 dollar a barrel, may have halted upstream investments internationally, but, nevertheless, this is a good time for resolving bureaucratic obstacles and preparing local communities for prospective exploration efforts that promise to contribute to job creation and economic recovery.

Four upstream investment plans are currently either at an advanced stage in terms of prospective drilling or at preliminary exploration stages.

Of all four plans, Energean’s license for Katakolo, western Greece, is at the most mature stage. Public consultation on an environmental impact study concerning this project’s drilling requirements was completed in December, 2019. The regional authority for western Greece has offered its approval. Even so, a year later, the energy ministry has yet to deliver its decision on the environmental study.

A license for the Gulf of Patras field, held by Hellenic Petroleum (ELPE) and Edison, is also at a mature stage. The partners requested, and were granted, an extension for the start of drilling at this field. EDEY, the Greek Hydrocarbon Management Company, granted the pair a further 15 months, until January 23, 2023, to facilitate their preparations.

Sources have attributed this additional time to a lack of appropriate regional port facilities, needed to facilitate the installation of equipment required for drilling. ELPE and Edison had previously been given another extension, until October, 2021.

On another front, a partnership comprising Repsol and Energean has until April to start a second stage of exploration activities at its Ioannina block in northwestern Greece. Local community approval is needed. The government needs to take action on the issue.

A fourth upstream project carrying geopolitical weight concerns licenses held by a consortium made up of Total, ExxonMobil and ELPE for offshore fields west and southwest of Crete. Though company representatives recently informed Crete’s regional authorities that seismic surveys are planned to begin towards spring, there have been no further updates or any signs of action.

Rescue talks for Prinos, Greece’s only producing field, making progress

Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Ministry OKs environmental study for blocks south of Crete

Energy minister Costis Hatzidakis has approved a strategic environmental impact study concerning an offshore area south of Crete in preparation for tenders to offer exploration and production licenses for two blocks covering most of the island’s width.

Giannis Basias, the former head official at EDEY, the Greek Hydrocarbon Management Company, went ahead with the strategic environmental impact study last August to clear the way for government authorities to stage tenders for licenses and also spare  winning bidders of needing to wait for pending issues to be resolved before they can begin their exploration efforts.

In addition, it is believed EDEY took swift action for the environmental impact study covering the offshore area south of Crete in response to interest expressed by oil majors.

The two offshore blocks south of Crete measure a total of 33,933 square kilometers and cover all four prefectures spread across the island.

These vacant blocks are situated next to two blocks southwest and west of Crete that have already been licensed out to a three-member consortium headed by Total with ExxonMobil and Hellenic Petroleum as partners.

The eastern flank of these two blocks is intruded by a corridor defined in a recent Turkish-Libyan maritime deal.

The Greek energy ministry’s approval of the strategic environmental impact study for south of Crete is not linked to Turkey’s heightened provocations in the Aegean Sea, ministry officials told energypress.

The environmental study’s approval means this offshore area is now set for tenders and also sends out a signal of readiness to the international upstream industry, the ministry officials explained.

Just days ago, the newly appointed EDEY administration and the energy ministry’s secretary-general Alexandra Sdoukou met with officials of Total, operator of the consortium holding the two licenses southwest and west of Crete. Seismic surveys for these blocks will be completed by March next year, the Total officials appear to have promised.

Turkish-Libyan MoU ‘ignores’ International Law of the Sea

A Turkish-Libyan Memorandum of Understanding emphatically ignores article 121 of the International Law of the Sea (UNCLOS 1982), which recognizes Exclusive Economic Zone and continental shelf rights for island areas, and overlooks the existence of Crete, Karpathos, Kasos, Rhodes and Kastellorizo to carve out approximately 39,000 square kilometers of Greek territory south of Crete for Libya, petroleum geologist and energy economist Dr. Konstantinos Nikolaou, a former member of the board at the Cyprus Hydrocarbons Company, has pointed out in an analysis, spelling out the dangers of Turkey’s provocative behavior in the region.

Turkey misappropriates the continental shelf and EEZ associated with Crete, Karpathos, Kasos, Rhodes and Kastellorizo in the east Mediterranean, he noted on the MoU, submitted by Turkey to the UN in an effort to make gains at Greece’s expense.

Hydrocarbon licenses for plots south and southwest of Crete that have been awarded by the Greek State to Total, ExxonMobil and ELPE (Hellenic Petroleum) and published in the Official Journal of the European Union, set a precedent that backs the positions of Greece, whose division of the area is based on International Law of the Sea guidelines, Nikolaou highlighted.

Turkey is using its state-run petroleum corporation TPAO as a tool to exercise foreign policy for territorial gains, Nikolaou added.

Natural gas discoveries in the east Mediterranean serve as a major driving force behind the actions of Turkey, whose energy sector is import-dependent, he pointed out.