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.

Oil drilling plans on hold, forced by price collapse, pandemic

Preliminary hydrocarbon exploration work planned by oil companies at licenses in the Ionian Sea and south of Crete is being postponed for an indefinite period that could last as much as a year, possibly more.

Upstream players are revising plans as a result of the collapse in oil prices and the coronavirus pandemic, a double setback for the sector.

Worse still, investment conditions for the Ionian Sea and Crete areas are made even more challenging by the fact that neither has yet to reveal sustainable fields.

In addition, both Greek zones are deep-sea areas of depths ranging from 2,500 to 3,000 meters, making exploration a high-cost venture.

Global oil majors are reducing investments and expenses by the billions in response to the unfavorable market conditions that have emerged over the past couple of months.

Fields with proven reserves have not been spared, which pushes untested fields such as those in Greece even further down the priority list.

The resumption of drilling ventures still at preliminary stages is not likely until oil prices rebound, energy minister Costis Hatzidakis noted in an interview with Greek daily To Ethnos.

It is a similar picture for Cyprus. The Eni-Total consortium yesterday announced it is postponing oil drilling activities in Cyprus’ Exclusive Economic Zone until March or April next year.

Energean to acquire Total’s stake in Block 2, offshore Greece

Energean, the oil and gas producer focused on the Mediterranean, has signed an agreement for the acquisition of Total’s stake in Block 2, offshore Western Greece, providing further material exploration opportunities in its core area of the Eastern Mediterranean with limited financial exposure, the company has announced.

The deal further enhances the future growth potential of Energean’s portfolio and medium-term optionality to deliver value to all stakeholders, the company noted. 

On completion, Energean would acquire Total’s entire 50% Working Interest share and Operatorship. Energean’s net remaining expenditure towards satisfaction of the minimum work obligation, which includes 1800km of 2D seismic acquisition and processing – activity which Energean believes could significantly de-risk the prospectivity of the licence – is approximately €0.5 million. Energean believes this is a highly attractive transaction in the context of the early stage prospectivity identified on the Block.

Work to date on the licence has identified that Block 2 contains part of a large, potential target comprising of a four-way closure at the Top Jurassic Apulia platform. The prospect is thought to be an analogue to the Vega field offshore Italy, in which Edison E&P operates with a 60% working interest. The structure is covered by sparse 2D seismic which could be de-risked through the seismic programme that will be acquired as part of the minimum work programme.

The feature straddles the Greek and Italian maritime border with approximately 60% of the prospect within the Block 2 license with the remaining area part in Italian waters. Edison E&P, of which Energean expects to complete its acquisition during 1H 2020, as well as holding a 25% Working Interest in Block 2 also participates in the adjacent 84F.R-EL block offshore Italy, pending award. Post completion of the Edison E&P transaction, Energean will then own a 75% Working Interest in Block 2. Hellenic Petroleum owns the remaining 25% Working Interest.

Crete offshore surveys by Total-led team late this year, early ’21

Intensified, follow-up seismic surveys by a Total-led consortium at two offshore licenses south and west of Crete will go ahead as scheduled late this year or early in 2021, sources have informed.

The exact commencement date will be determined by the availability of specialized research vessels and weather conditions. For now, preparations are progressing as planned.

France’s Total heads a three-member consortium for the two blocks off Crete, partnered by US giant ExxonMobil and Hellenic Petroleum (ELPE).

Low shipping traffic in the region will enable hydrocarbon exploration work as late as the spring season of 2021 if next winter’s weather conditions prove unsuitable.

Initial survey work at the Cretan blocks have produced encouraging results, especially at an offshore area given the name Talos, which has displayed similar geological traits to Egypt’s offshore Zohr gas field.

The results of preliminary research conducted by ELPE in 2015 convinced Total and ExxonMobil to form a partnership with the Greek player.

 

France’s Total wins intensely fought tender for 3 LNG orders

France’s Total has emerged as the winning bidder in an intensely contested tender staged by Greek power utility PPC for three LNG shipments between March and May, sources from abroad have informed.

The French company outbid rivals for all three shipments, totaling 2.66 million MWh, but price levels were driven to particularly low levels as a result of intense bidding, the same sources noted.

Over the past few weeks, LNG prices in Asia have slumped to record lows, including yesterday, battered by the negative impact of the coronavirus on trade. Many Chinese factories have been forced to interrupt operations. Meanwhile, US LNG is flooding markets.

Given the combined effect of these market conditions, many of twelve bidders said to have participated in PPC’s tender were prepared to submit offers as low as one percent below the Dutch TTF index, which has tumbled to a level of approximately 10 euros per MWh over the past few days.

Of the twelve participants in the PPC tender, whose deadline expired on Wednesday, the five most competitive candidates were asked to make their best and final offers yesterday.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

This tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

Athens wants greater French hydrocarbon engagement

The government wants France’s Total to play a more active role in Greek offshore hydrocarbon exploration, Prime Minister Kyriakos Mitsotakis made clear during a meeting in Paris yesterday with the French group’s chief executive Patrick Pouyanné.

The potential of Greece’s hydrocarbon market, including offshore licenses south and southwest of Crete held by a Total-led consortium – it also features Exxon Mobil and Hellenic Petroleum (ELPE) – was the main focus of yesterday’s meeting.

Processing of seismic data collected from the Cretan offshore blocks has provided strong evidence of a deposit sharing similar attributes to Egypt’s Zohr gas field. However, this needs to be proved in practice. French officials have remained cautiously optimistic as they await initial drilling operations for a clearer picture.

Total’s plans for exploration within the Cypriot Exclusive Economic Zone, specifically at Block 8, for which Total shares a license with Italy’s Eni, were also discussed yesterday.

Turkish drillship Yavuz has sought to engage in illegal exploration activities in this area. French officials do not intend to intercept any Turkish moves at this stage but are expected to do so if the exploratory rights of Total and Eni are disputed once the companies decide to start exploring the area.

 

Gas deposits south of Crete may reach 280 bcm, early data suggests

Offshore block licenses south of Crete held by a consortium comprising Total, ExxonMobil and Hellenic Petroleum (ELPE) could contain natural gas deposits measuring 280 billion cubic meters (10 trillion cubic feet), regional seismic data indicates.

If this amount is confirmed, the deposit south of Crete will be equivalent, in terms of quantity, to that of Israel’s Tamar field or double the Aphrodite field within Cyprus’ EEZ.

The area south of Crete shares similar geological traits to Egypt’s Zohr field, a major regional discovery along with Cyprus’ Aphrodite and Israel’s Leviathan, the data gas shown.

PGS has reprocessed seismic data that was collected through surveys conducted south of Crete as well as in the Ionian Sea, on Greece’s west side, between 2012 and 2013.

Drilling operations still need to be conducted and additional seismic data gathered before any definite conclusions are reached. The overall procedure will require about eight years to complete.

Four hydrocarbon licenses taken to parliament, interest in new areas

The energy ministry has submitted to parliament four draft bills for the approval of as many offshore hydrocarbon exploration and production licenses near Crete and in the Ionian Sea.

The imminent approval of these agreements, negotiated between 2015 and 2019, will enhance Greece’s ability to attract foreign investments in the developing hydrocarbon sector, the ministry noted in a statement. The bills were delivered to parliament yesterday.

Exploration-related investments for the four licenses are expected to reach 140 million euros, create jobs and support local communities, according to the ministry’s statement. The recently elected government is striving to project Greece as a business and investment-friendly country.

Agreements for two offshore licenses southwest and west of Crete were signed in June between the Greek State and a consortium comprising Total, ExxonMobil and Hellenic Petroleum (ELPE).

These were preceded by two agreements signed several months earlier, in April – one for an offshore block in the Ionian Sea, whose rights were acquired by a two-member consortium made up of Repsol and ELPE; the other, for a block west of the Peloponnese, secured by ELPE, the sole participant.

Investors are also believed to be interested in new areas for hydrocarbon exploration.

Ratification of Cretan, western offshore licenses just days away

Parliamentary approval of offshore hydrocarbon exploration and production licenses awarded for four fields west and southwest of Crete as well as Greece’s west is now just days away.

The submission of all four licenses to Greek Parliament by this Friday for ratification is seen as a very likely prospect.

The related draft bill carrying the four licenses will essentially represent the recently appointed energy ministry’s first legislative act.

A consortium comprised of Total, ExxonMobil and Hellenic Petroleum (ELPE) has been awarded two licenses for blocks west and southwest of Crete. Repsol and ELPE were the winning bidders of a tender for a block in the Ionian Sea.

Tenders for these three licenses were held following interest expressed in 2017.

ELPE is the sole participant in a license awarded for Block 10 northwest of the Peloponnese, following a tender launched in 2014.

Scientific surveys have confirmed many geological similarities between the two Cretan offshore blocks and southeast Mediterranean natural gas fields that have produced major discoveries such as Egypt’s Zohr, Cyprus’ Aphrodite and Israel’s Leviathan.

A clearer picture on the prospects of the Greek fields is expected in  eight years, the amount of time it should take to complete related exploration work. A first drilling operation is expected towards the end of this eight-year effort.

The presence of ExxonMobil and Total signals heightened US and French hydrocarbon interest in the wider southeast Mediterranean region.

Industry experts believe ratification of the four Greek licenses will spark further upstream developments in the wider region, including Greece. Preparations are underway for more offshore licenses, especially south of Crete, according to some sources.

Hydrocarbon, PPC, DEPA draft bills to follow Thessaloniki Fair

Energy minister Costas Hatzidakis’ team and related departments are busy preparing three draft bills for submission to parliament, one by one, by October, following this year’s Thessaloniki International Fair, to take place September 7 to 15.

The first of these three draft bills concerns the approval of hydrocarbon exploration and production licenses in offshore areas west and southwest of Crete, involving a consortium comprising Total, ExxonMobil and Hellenic Petroleum ELPE; an Ionian Sea license involving Repsol and ELPE; and Block 10, west of the Peloponnese, for which ELPE is the sole holder.

The US Ambassador to Greece, Geoffrey R. Pyatt, made reference to the licenses yesterday as a means of underlining the investment interest in the sector of US firms, including ExxonMobil.

The second draft bill to be tabled in parliament will detail operational revisions at power utility PPC. Hatzidakis, the energy minister, has noted the state-controlled power utility needs to rely less on the Greek State and compete on equal terms with rivals. The power utility draft bill will alter how PPC stages various auctions concerning supply and services. These auctions are strictly regulated by state terms.

A third draft bill, expected to be delivered to parliament within October, will nullify the previous Syriza government’s privatization plan for gas utility DEPA. It entailed splitting the utility into DEPA Trade and DEPA Infrastructure ahead of the sale of respective majority and minority stakes.

The recently elected New Democracy government appears determined to pursue a more aggressive DEPA privatization policy offering majority stakes in both the utility’s distribution network and trading interests.

 

 

 

 

 

Ratification of hydrocarbon licenses within August

Four offshore hydrocarbon exploration and production licenses signed by three groups of investors for areas off Crete, in the Ionian Sea and west of the Peloponnese are expected to be ratified in Greek Parliament within the next few days, possibly before the end of August, energypress sources have informed.

These licenses are significant for the reputation of the recently elected conservative New Democracy party, keen to underline its willingness to cooperate in the energy sector and draw major investments to the country.

Oil majors are involved. France’s Total heads a consortium that includes US giant ExxonMobil and Hellenic Petroleum (ELPE) for the two licenses off Crete, south and southwest of the island.

ELPE has joined forces with Spain’s Repsol for a license in the Ionian Sea, while ELPE is the sole participant in the offshore license west of the Peloponnese.

Greek energy minister Costis Hatzidakis, in talks with US Assistant Secretary of State for Energy Resources Francis Fannon earlier this month, pledged the licenses would soon be ratified in parliament.

A swift ratification procedure by the new government would send out a positive message to international investors.

More than €3bn invested during crisis, ELPE Upstream chief tells

Hellenic Petroleum ELPE’s Upstream S.A. CEO  Yannis Grigoriou was interviewed for the 3rd episode of BGS Talks Youtube show, discussing, with Regina Chislova, Project Director of Exploration and Production Offshore Congress Hub EPOCH 2019, offshore exploration in Greece; relations between the company and the Greek government; cooperation with ExxonMobil and Total; investments during the crisis and other topics. Excerpts, provided by the BGS Group, follow below. The full interview is available on BGS Talks Youtube channel.

Regina Chislova: In general, let us list the most important projects happening in the region right now.

Yannis Grigoriou: I think what is going on around Cyprus is very interesting, the big majors are there… I think that over the next days we will have some positive announcements. The licensing round of Egypt was a success for the country…And, in Greece, we are signing the lease agreement for two huge offshore blocks around Crete together with Total and Exxon Mobil.

R.C: Could you give us more details on this project, since the majors came to the region.

Y.G: We have geological concepts in our mind. It was almost three years ago, when we had in our hands some multi-client seismic data sold by PGS. We were looking at those and trying to interpret the complex geology of the area…So we worked on that for 2 or 3 months and then we discussed it with Total…We thought: “Let’s form a joint venture to go further on that.” We did that and then we thought again “We need another company to join us” and…we approached Exxon Mobil. In autumn 2016, we created a very strong joint venture for the exploration in the country – Total 40% operator, Exxon Mobil 40%, and ELPE 20%. Following negotiations and other things we are set to sign the lease agreements for these 2 blocks which are really big and very promising.”

“R.C: The country suffered from an enormous crisis. How has the oil and gas industry survived?

Y.G: At ELPE, we survived the crisis because we invested more than €3 billion in building a brand new refinery near Athens and also upgraded our refineries. As the group mostly consists of the downstream oriented group, these investments, first of all, created a number of jobs. We had an opportunity to produce high-quality products according to the strictest EU specifications, which we exported to nearby countries – to Italy, France; we are exporting petrochemicals to Turkey. So, we overcame the Greek crisis by exporting products. We have experienced high profits over the last 3 years…Our profits on an EBITDA basis are almost €800-900 million, which gives us an opportunity for further growth and investments in other business opportunities like upstream or renewables. The export of renewables is also the next pillar for growth for the company.”

“R.C: The principle of your company is “we operate with responsibility towards society and the environment”. Can you elaborate?

Y.G: Health, safety and environment is our first principle for all the company’s activities. We are trying our best, in all our activities, to protect the health of our employees, the health of the local communities, and their safety and the environment. At a recent Gulf of Patras project, for example, where we conducted a 3D seismic survey, we did so in compliance with environmental regulations and special attention to the dolphins.

“R.C: How do you approach your team as a senior-level manager?

Y.G: If I say “as a friend” perhaps there would be misunderstanding in the whole group, but the way we work is like that. We are not a kindergarten. Perhaps, if you ask them, they might tell you that I’m a very strict boss and I push them to the end. But we set goals – sometimes difficult ones – and all of us work together to achieve them.”

Watch the full interview on BGS Talks Youtube channel for insight into why Yannis Grigoriou thinks it is possible to discover fields the size of Zohr in the Greek offshore area; how to cope with failure, and other matters.  

 

Total seeking buyer for its 50% stake in Block 2, west of Corfu

French oil and gas multinational Total appears to be preparing to sell its 50 percent stake in an offshore license west of Corfu, Block 2, preferring instead to focus on other hydrocarbon interests in Greece, west and southwest of Crete.

Total, the operator of Corfu’s Block 2 license, established a consortium for this venture with Edison and Hellenic Petroleum (ELPE), each holding 25 percent stakes.

This license was signed in October, 2017 following the launch of a tender in 2014 that offered a total of 20 offshore blocks in the Ionian Sea and south of Crete.

Total is in partnership with US major ExxonMobil and ELPE for its licenses west and southwest of Crete.

Recent activity in Cyprus’ Exclusive Economic Zone (EEZ) – an area in which Total has joined forces with Italy’s Eni to take on Block 7 – as well as developments in the wider eastern Mediterranean, has turned the French oil and gas giant’s attention to this region, sources told energypress.

Further changes are expected in the Greek market. ELPE is believed to be seeking partners for exploration and production licenses it has acquired alone.

 

TAIPED awaiting ND position on ELPE, DEPA privatizations

The privatization fund TAIPED is awaiting the newly elected conservative New Democracy government’s strategy on energy sector privatizations so that it can reshape, from scratch, as it appears, the sale procedures for Hellenic Petroleum ELPE and gas utility DEPA.

The newly appointed energy minister Costis Hatzidakis may have highlighted the importance of these two privatizations during proceedings at the ministry’s recent handover ceremony, describing both sales as agenda priorities. However, everything concerning both will need to be placed on hold as emphasis must currently be placed on the troubled power utility PPC and the effort to find a successor for chief executive Manolis Panagiotakis, who resigned from his post at the state-controlled company shortly after the ND’s victory in the July 7 election.

TAIPED officials also need to stage a first meeting with finance minister Hristos Staikouras, during which talks on the shape of the new ND government’s privatization strategy preferences can be discussed.

ELPE’s future administrative shape, following the recent failure of an initial privatization effort, remains in the dark. Pundits have already ruled out the possibility of a repeat of this sale effort – that is, a concurrent sale of stakes by the petroleum group’s two main shareholders, the Greek State, holding 35.5 percent of ELPE, and the Latsis Group’s Paneuropean, holding 45.5 percent. It is also unknown, if not doubtful, if Paneuropean will be willing to participate in any new ELPE sale procedure.

For the time being, ELPE’s administration is focused on the preparation of the group’s first-half results, expected to be officially reported in late August, as well as an imminent approval in Greek Parliament of hydrocarbon exploration and production licenses secured – as part of a consortium also involving ExxonMobil and Total – for two offshore blocks west and southwest of Crete.

All is currently quiet along the DEPA front. The ND party, according to party sources during the lead-up to the elections, believes the gas utility must be privatized as one entity, not two, through a split of its commercial and infrastructure divisions, as was envisioned by the previous leftist Syriza government.

The DEPA-related intentions of ELPE, holding a 35 percent share of the gas utility, will be pivotal.

 

 

 

 

 

Investors will ‘abandon Crete blocks if discoveries not significant’

Two offshore blocks west and southwest of Crete, licensed out just days ago to a three-member consortium comprised of Total (40%), ExxonMobil (40%) and Hellenic Petroleum-ELPE (20%), promise far greater production potential than blocks further north in the Ionian Sea, but investors will leave if these Cretan blocks do not offer significant output, a top-ranked official has noted.

Investors will abandon their efforts if a production target of at least 500 million barrels is not reached as the investment costs are considerable, Yiannis Basias, the head official at EDEY, the Greek Hydrocarbon Management Company, told state-run radio Proto Programma.

He denounced environmental concerns being expressed, describing these as inexplicable, “unless the intention is to stop the exploration activity altogether.”

Hydrocarbon companies spend vast amounts of money to ensure the avoidance of problems as, besides affecting the environment, local economy and health of individuals, any accident would also instantly blacklist companies and trouble their futures, the EDEY chief highlighted.

Sizable discoveries promise to greatly change Greece’s image and standing in the southeast Mediterranean region, Basias remarked, adding that the country’s economy would gain some balance for a less burdensome future.

At present, economic gains generated by tourism are immediately offset by costs concerning  natural gas and crude costs, the EDEY chief said.

PM to attend Cretan block signing ceremony, reshuffling in west

A signing ceremony scheduled to take place tomorrow for hydrocarbon exploration and production rights concerning at least one of two offshore Cretan blocks will be attended by Prime Minister Alexis Tsipras, whose speech is expected to emphasize Greece’s effort to utilize the country’s mineral wealth and also project a message opposing Turkey’s provocative behavior in the southeast Mediterranean.

The energy ministry will sign an agreement tomorrow with a three-member consortium comprised of ExxonMobil, Total and Hellenic Petroleum (ELPE) for an offshore license west of Crete.

A second block, situated adjacently southwest of Crete, could also be signed by the two sides tomorrow. But it still needs to be endorsed by a local authority, making the prospect highly unlikely.

Both agreements will first need to be approved by Greek Parliament before exploration work commences. A first phase of exploratory survey work is planned to last three years. If the feedback is favorable, drilling activities will follow after 2022, according to current plans.

Meanwhile, consortiums that have secured licenses for blocks in western Greece are moving to reshuffle their line-ups, energypress sources have reported.

This activity, a common occurrence in the global oil industry, has been attributed to maneuvering by multinationals for moves to blocks seen offering better prospects as well as efforts to seek additional partners for investment cost sharing.

Greece’s geopolitical role and blocks are gaining stature on the international map amid all this activity.

EDEY aims to offer complete Crete portfolio with new areas to next gov’t

EDEY, the Greek Hydrocarbon Management Company, is striving to have completed all preliminary work for new licenses off Crete so that Greece’s next government can be handed a complete portfolio ready for licensing procedures when it begins its tenure following the snap elections on July 7.

The country’s next administration will need to push ahead with new hydrocarbon projects.

EDEY is currently working on environmental studies concerning new areas south of Crete, which the company intends to offer to investors for exploration and production.

Their features differ to those of two offshore licenses already secured by a three-member consortium comprised of ExxonMobil, Total and Hellenic Petroleum (ELPE), west and southwest of Crete.

The new areas south of Crete had been swept aside in previous procedures but new scientific data has revitalized the interest of investors.

A signing ceremony for one of the two Cretan hydrocarbon exploration and production licenses, west of Crete, will be staged this Thursday, the ExxonMobil- Total-ELPE consortium has been informed.

The second license, southwest of Crete, may also be added to Thursday’s signing ceremony. However, its finalized version still needs to be formally presented, meaning investors will most probably need to wait until after Greece’s snap elections for this license to be signed.

Crete offshore licenses a step away from finalization

A decision by the Court of Audit, one of Greece’s highest ranking courts, approving two hydrocarbon exploration and production licenses for offshore blocks south and west of Crete to a consortium comprised of Total, ExxonMobil and Hellenic Petroleum (ELPE) paves the way for the signing of finalized agreements.

This could take place at a signing ceremony on Crete prior to the July 7 snap elections with the participation of energy minister Giorgos Stathakis.

The three companies, keen to begin exploration activities before the end of the year, have urged the government for a swift completion of procedures.

The two agreements will still need to be ratified in Parliament following next month’s general elections before the three-member consortium can commence work.

The Court of Audit’s favorable decision represents one of the final steps in a procedure started in 2017, when Total and ExxonMobil had expressed interest.

 

Heightened activity, consortium reshuffling as drilling nears

Following a wider trend observed in the southeast Mediterranean, consortiums holding hydrocarbon exploration and production licenses in Greek territory are moving to reshuffle their line-ups, especially for blocks in the Ionian Sea, as the first local drilling operations in decades draw nearer, energypress sources have informed.

The reshuffling activity, which has not involved blocks off Crete, has been attributed to a search by multinationals for additional partners in consortiums established with Hellenic Petroleum (ELPE) as a means of reducing high costs demanded by deep-water exploration in the Ionian Sea.

ELPE holds exploration and production rights for various blocks in the Ionian Sea through consortiums established with Total, Edison and Repsol.

Video Data Rooms have been set up to enable prospective participants to view seismic survey data for Ionian Sea blocks, as well as technical and financial information.

The current reshuffling activity could produce new consortium line-ups by the end of the year, sources have informed.

Greece’s first drilling operation in several decades, at the Gulf of Patras, is expected to commence early next year. Positive results promise to provide further impetus for more drilling in Greek territory.

 

East Med pipeline prospects bolstered by Egyptian support

Egypt’s constructive participation in talks for the development of the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy, has created favorable prospects for the realization of a project promising to play a pivotal role on the southeast Mediterranean energy map.

US support for the project and an effort by participating countries to ensure ExxonMobil’s involvement are also bolstering the East Med’s development prospects.

Last month, Egypt’s petroleum minister Tarek El-Molla had told Cyprus News Agency his country is not interested in participating in the East Med project with its Zohr natural gas deposit.

However, the Egyptian minister changed his tune yesterday at Ceraweek 2019, an international energy in Houston, Texas, noting Egypt will support the East Med project.

Quite clearly, Egypt is looking to establish yet another alternative supply route for its Zohr field, an enormous natural gas discovery, to major consumer markets of the west.

Prior to expressing support for East Med, El-Molla took part in a meeting with his Greek, Israeli and Cypriot counterparts – Giorgos Stathakis, Yuval Steinitz and Giorgos Lakkotrypis, respectively – and US energy under secretary Mark Menezes, at the Houston event.

All four officials confirmed their support for the East Med gas pipeline, according to a statement released by Greece’s energy ministry.

Stathakis, Greece’s energy minister, also held a separate meeting yesterday with ExxonMobil officials for talks on developments concerning the oil major’s hydrocarbon exploration interests at offshore blocks west and southwest of Crete – through a consortium established with Total and ELPE (Hellenic Petroleum) – and the East Med project, energypress sources informed.

 

Crete exploration license by May, minister assures ExxonMobil deputy

Exploration and production agreements for two offshore blocks west and southwest of Crete awarded a year-and-a-half ago to a consortium comprising ExxonMobil, Total and ELPE (Hellenic Petroleum)  will be ratified in Greek parliament by May, the latest, energy minister Giorgos Stathakis has assured a leading ExxonMobil official.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, has apparently accepted the minister’s commitment with satisfaction, but this remains unconfirmed.

The two officials met on the sidelines of the Delphi Economic Forum, a high-profile four-day event that ended yesterday.

Consortium officials have begun showing signs of frustration over the slow-moving licensing procedure for the two offshore Crete blocks.

In a carefully worded statement, the US Ambassador to Greece, Geoffrey R. Pyatt, who also attended the forum, noted he was eager to see the bureaucratic delays come to an end so that exploration work off Crete could commence.

The tender for the two offshore Crete blocks was launched in December, 2017. The ExxonMobil-Total-ELPE consortium submitted its bid in March, 2018 before it was endorsed four months later. If parliament ratifies the related licenses in May, the entire procedure will have taken 18 months to complete.

Investors frustrated by license delays for Crete exploration

Contrary to Cyprus, providing oil majors investor-friendly conditions for their hydrocarbon exploration activities, ExxonMobil’s recent Glaucus-1 gas discovery emerging as a shining example, conditions in Greece are undermining the efforts of investors.

A consortium comprising Total, Exxon Mobil and ELPE (Hellenic Petroleum), established for hydrocarbon exploration work off Crete, has been held back by Greek government delays over the past few months.

Though most of the preliminary work has been completed, the trio of investors is still waiting for the Greek government to issue an exploration license, which would enable it to commence work at blocks off Crete.

An environmental impact study provided by the consortium for blocks west and southwest of Crete is said to have inexplicably fallen into stagnancy at one of the offices of the energy ministry’s environmental division over the past couple of months. It needs to be approved as part of the license issuing procedure.

Not surprisingly, investors are apparently making comparisons between sector operating conditions in Greece and Cyprus.

Exxon Mobil, Total and ELPE officials have all forwarded questions to energy minister Giorgos Stathakis’ office over the delay and been told not to worry.

“We’re excited but still waiting for the Greek government’s final approvals,” Tristan Aspray, Vice President of Exploration for Europe, Russia, and the Caspian, somewhat frustrated, recently remarked.

 

New wind turbine connections to grid rise by 7.2% in 2018

A total of 103 new wind turbine facilities with a combined capacity of 191.6 MW were connected to the country’s grid in 2018, a 7.2 percent year-on-year increase, the ELETAEN figures showed, according to latest data released by ELETAEN, the Greek Wind Energy Association.

EREN, the renewable energy group founded and headed by Greek-French entrepreneur Paris Mouratoglou, has emerged as a new entry in Greece’s top-five list of RES investors with investments offering a total capacity of 210.9 MW, a 7.5 percent market share.

EREN, which recently established a strategic agreement with Total, is now ranked fifth, replacing Enel Green Power, which has dropped to sixth place.

The top-five list’s four other enterprises held their places. Terna Energy leads with 536.1 MW, a 19 percent share; El. Tech Anemos is ranked second with 285.6 MW (10.1%), Iberdrola Rokas is third with 250.7 MW (8.9%); and EDF EN Hellas is placed fourth with 238.2 MW (8.4%)., according to the ELETAEN data.

CF Ventus, a venture of the Fortress Fund, has emerged as Greece’s new RES market arrival following its acquisition of wind energy parks from the Libra group. CF Ventus is continuing to invest in the sector.

Facilities at old wind energy parks with a total capacity of 15.43 MW operated by PPC Renewables, primarily in Crete and the North Aegean, were uninstalled in 2018.  Work on their replacements has already begun.

Vestas continued to dominate Greece’s wind turbine supply market, providing an impressive 78.2 percent of all turbines installed in 2018.

As for the spatial distribution of wind capacity in Greece, the central mainland continues to be ranked first with 907 MW (32%) and is followed by the Peloponnese with 550 MW (19%) and eastern Macedonia-Thrace with 375 MW (13%).

 

Ministry committee receives Crete hydrocarbons impact study

An environmental impact study concerning offshore hydrocarbon exploration activity planned for south and southwest of Crete has been forwarded to a special energy ministry committee by EDEY, the Greek Hydrocarbon Management Company, following a related public consultation procedure.

This special committee is now in the process of assessing the study before delivering its findings to energy minister Giorgos Stathakis for authorization. Once signed by the minister, the environmental study, along with licensing agreements drafted for offshore plots in the aforementioned regions, will be sent to a supervisory committee for a final legality check before heading to parliament as a draft bill for ratification.

Speaking at the Athens Energy Forum yesterday, Stathakis, the energy minister, estimated that licenses offered for Crete, as well as the Ionian Sea, would be submitted to parliament in approximately two months.

A consortium comprising Total, ExxonMobil and ELPE (Hellenic Petroleum) has been awarded licenses around Crete, while Repsol and ELPE have secured a license for an Ionian Sea block.

Both investment teams are hoping for a swift completion of bureaucratic procedures to commence their exploratory work as soon as possible.

EDEY presenting five new fields in search for more investors

EDEY, the Greek Hydrocarbon Management Company, is seeking to draw an increased level of attention from petroleum firms for natural gas and oil exploration through five new offshore blocks, located in the Ionian Sea, off Crete and south of the Peloponnese.

The five blocks, ranging from 8,000 to 22,000 square kilometres in size, were presented yesterday by EDEY chairman Yiannis Basias at a workshop organized by IENE, the Institute of Energy for Southeast Europe.

EDEY has reprocessed related seismic survey data concerning these five blocks and plans to present findings at international conferences and meetings with the objective of generating the interest of oil majors.

The Greek hydrocarbon company’s latest initiative comes at a time of elevated activity among southeast Mediterranean, Black Sea and Adriatic countries, all staging tenders for blocks or conducting surveys and drills.

Global oil industry players have turned their attention to the wider region. Total, ExxonMobil, Repsol and Edison have already established a presence on Greek territory. EDEY is hoping to add to the list.

Major traders, Socar tipped to submit first-round ELPE bids

Two of the world’s biggest commodity traders, Dutch firm Vitol and Switzerland’s Glencore, will probably feature among the participants to officially express interest in ELPE’s (Hellenic Petroleum) international tender offering a 50.1 percent stake of the enterprise, according to latest information provided by sources.

The deadline for non-binding offers expires today following an extension of a previous May 18 deadline.

Besides the aforementioned commodity traders, Azerbaijan’s state-run energy firm Socar, joined by a European firm, possibly Spanish, is also tipped to declare non-binding interest in the bailout-required ELPE sale, sources have informed. This would represent a surprise development.

Socar had taken part in a previous DESFA (natural gas grid operator) sale and was declared the winning bidder before its long-running acquisition attempt was blocked by European Commission competition concerns.

News on the possible participation of major European energy players is not good. European petroleum groups such as Italy’s Eni, Hungary’s MOL, France’s Total, and, possibly, Spain’s Repsol, have reached decisions to not submit initial expressions of interest for the ELPE sale, according to energy market pundits.

A clearer picture on the sale’s preliminary turnout is expected later in the day when TAIPED, the state privatization fund, is expected to announce the list of first-round bidders.

 

 

EDEY set to deliver opinion on Crete, Ionian hydrocarbon contracts

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.

Greek State, Latsis group touching up ELPE deal with hydrocarbon issues

Hydrocarbon exploration and exploitation rights either already acquired by ELPE (Hellenic Petroleum) or being sought, for blocks off Crete and in the Ionian Sea, are the focus of final-stage negotiations between the Greek State, represented by the government, and the Latsis corporate group aiming for a deal that will enable the sale, by the privatization fund, of a 51 percent stake and management rights of the petroleum firm to prospective buyers through an international tender.

The Greek State currently holds a 35.5 percent stake of ELPE and Paneuropean Oil, a member of the Latsis corporate group, controls a 45.47 percent stake.

Once the two sides reach a deal, seen happening any day now, according to pundits, then a 51 percent stake of ELPE will be offered to a strategic investor.

The two sides are believed to focusing on matters concerning how they will share future profits for hydrocarbon exploration and exploitation agreements already signed by ELPE as well as blocks being targeted.

The issue is rather complicated as ELPE holds exclusive rights for certain blocks (Arta-Preveza, northwest Peloponnese) but is a member of various consortiums for all its other hydrocarbon interests.

ELPE and Italy’s Edison have established a 50-50 partnership for a Gulf of Patras block. It holds a 25 percent stake in Block 2 off Corfu. France’s Total holds a 50 percent stake in this venture and Edison controls the other 25 percent. ELPE also holds a 20 percent stake in a consortium that has submitted the only offers for two offshore blocks south and southwest of Crete. Total and Exxon Mobil each hold 40 percent stakes in these initiatives. Also, ELPE and Spain’s Repsol hold 50 percent stakes in an offer submitted for another Ionian Sea block.

Once the government and Latsis group have signed an agreement, TAIPED, the state privatization fund is expected to swiftly announce an international tender. Its terms are expected to shape the turnout of interested investors.

According to the revised bailout, the tender was supposed to have been announced by the end of March. It could be launched this month, barring unexpected developments.

ELPE’s share price has remained relatively steady at levels of between 7.8 and 8 euros over the past month or so despite its privatization prospects. Based on the share’s closing price yesterday, ELPE’s equity-based value is 2.39 billion euros, meaning a 51 percent stake may be estimated at 1.19 billion euros.