As the Greek government is scrambling hard to avoid a
looming default and eventual exit from the euro, the need for the state to
raise much needed revenue, even on a long term basis, seems to have acted as a
catalyst in its effort to accelerate plans for hydrocarbon exploration and
production.
Greece
, which consumes some 380,000 barrels of oil daily,
relies on crude imports for 99.5 per cent of this quantity with the result that
more than 5% of its GDP is spend on oil purchases. Therefore the country has
every incentive to want to reduce its import dependence and take advantage of
its hydrocarbon deposits, which some experts say are not insignificant.
So far
Greece
has been able to produce limited quantities of oil
from its one and only oil field at Prinos, offshore the coastal town of
Kavalla
and the
island
of
Thassos
in northern
Greece
. Prinos is currently producing some 3,000 barrels of
oil per day with the prospect of this being increased to 5,000 barrels by the
end of the year as Energean Oil, the current operator, is carrying out
extensive drilling operations having since 2009 invested some $ 150 million in
improving reservoir output. Now in its 30th year of operation Prinos
has produced so far some 125 million barrels of oil, which is way above the
35-40 million which was originally estimated to hold. Petroleum engineers argue
that Prinos is typical of the type of hydrocarbon deposits to be found in
Greece
, which are not straight forward in their geological
structure but may hold significant quantities of oil and gas in secondary
basins, once the main reservoir has been depleted.
Although
Greece
remains one of
the least explored, from a hydrocarbon potential point of view, countries in
the
Mediterranean
there are a number of
proven deposits of various sizes, which can be economically exploited.
According to Dr. Dinos Nikolaou, a well respected oil geologist, who has
studied extensively
Greece
’s hydrocarbon
potential over the last thirty years,, there are eleven specific areas in
different parts of the country which hold promising deposits. These are to be
found mainly in the west part of
Greece
, offshore in the
Ionian Sea
but also onshore in
Epirus
but also along
the coastal area of northeast
Greece
. Until today 175
exploratory drillings have been carried out in
Greece
but only 20-22
of them can be considered state of the art and have provided useful data which
can be used to assess the region’s potential. Based on currently available data
it is difficult to make precise estimates concerning the country’s real
hydrocarbon potential but most geologists seem to agree that this varies
between 2 to 4 billion of proven and probable reserves. In addition there is
also some calculated speculation that the offshore area south of
Crete
, known as the
Herodotus basin, may hold as much as 2.5 trillion cubic ft. of gas.
Based largely on the above information but also
motivated by the steep rise in the price of oil over the last 12 months, which
has meant a massive increase in the country’s oil account, the Greek government
decided to press ahead with hydrocarbon exploration.
So two weeks
ago, the Environment, Energy and Climate Change Ministry (YPEKA) issued an
international invitation for expressions of interest for preliminary work for
offshore exploration, that is, non- exclusive seismic and geophysical surveys,
for the
Ionian Sea
and also to
the west and south of
Greece
. The specialized geo survey companies
that will win the tender will also assume the cost of the surveys. According to
Deputy Minister Yiannis Maniatis, the process of bidding will be completed over
the next three months, while the aim is for the surveys to be ready in time for
the second international round of hydrocarbon concessions for exploration, to
be announced by the government before the end next year.
According to Ministry sources, the objective of the
planned seismic is to ensure data acquisition, processing and interpretation,
including reprocessing and interpretation of existing data, in accordance to
the highest present day oil and gas industry standards. These data will assist
in the evaluation of the hydrocarbon potential of the area outlined in the maps
released for the Ionian and
Crete
area and
will also help in the promotion of the subsequent International Licensing Round
for Hydrocarbon Exploration and Exploitation which is targeted for 2012.
Ministry’s personnel shall work closely with the success fuel company in the
planning of the survey, the selection of acquisition and processing parameters
and the interpretation/ evaluation of all available data.
The process of non- exclusive seismic surveys is a
method that enables specialist companies to explore broad areas fast and
effectively with the use of state-of-the-art technology, obtained deep imaging
of geological structures and deposits. The results to be obtained from this
process will be handed to the government, while the surveying companies will
retain the right to make the data available at a cost to prospecting oil
companies for a specific period. The government also expects to raise revenue from
the sale of research data, but the most important source of projected income
will be the granting of concessions in the second oil round now under
preparation. Although it is difficult at this stage to estimate the amount of
money that Greece could earn from oil and gas production it is safe to
calculate the state’s income from taxes alone in the area of 1 to 1.5 billion dollars per year on the
basis of a daily production of some 100,000 to 120,000 barels per day and
assuming a steady price of oil at $75 per barrel, note energy economists in
Athens familiar with Greek oil law
provisions.