Greece’s two refineries, Hellenic Petroleum (ELPE) and Motor Oil, are moving ahead with plans to replace Russian crude oil imports with orders from alternative sources.
Both energy groups have planned ahead of the EU’s proposal for a ban of all oil imports from Russia by the end of this year, company officials have informed. Reduced reliance on Russian oil imports has been a part of their strategies, whose implementation began last year, the officials added.
Neither energy group has been overexposed to Russian oil imports. Motor Oil’s Russian oil imports, over the years, have represented between 5 to 7 percent of its total oil imports, while ELPE’s Russian oil imports in 2021 reached 18 percent of the group’s total, according to its annual results.
Motor Oil’s deputy managing director Petros Tzannetakis informed a teleconference with analysts last month that the energy group had cut Russian oil imports in the fourth quarter last year.
ELPE’s leadership, which had joined a business delegation accompanying Greek Prime Minister Kyriakos Mitsotakis on a recent official visit to Saudi Arabia, reached an agreement with Aramco for bigger crude oil purchases, presumably to replace Russian oil.
Though lower international oil prices over the past two years have led to a drop in sector investments, conditions for higher prices in the next few years are gradually ripening, according to Amin Nasser, president and chief executive officer of Saudi Arabian oil company Saudi Aramco.
Highlighting the subdued activity of recent times, Nasser, in comments reported by Bloomberg, noted that investments in the oil sector plummeted by one trillion dollars between 2014 and the present.
New production capacity and investment needed in the future are lagging, Nasser told an event at Columbia University in New York.
“While the short-term market is pointing to a surplus of oil, the supply required in the coming years is falling behind,” he noted.
Nasser forecast that a production level of 20 million barrels per day will be needed to cover increasing oil demand and offset shortages prompted by depleted older reserves.
New investments being made are primarily small-scale, short-term moves and therefore will not cover future production needs, Nasser noted.
The Saudi Aramco head said his company forecasts a continual rise in demand during 2018 and 2019, contrary to the current year, for which the International Energy Agency (IEA) expects a slowdown.