In cooperation with the Greek Embassy in London and the ESCP Europe Business School’s Research Center for Energy Management (RCEM), the government in Athens is preparing a major showcase event in the British capital next week to present the blocks to be conceded for hydrocarbon exploration in the Ionian Sea and south of Crete.
Invitations have been sent to over 500 representatives of oil companies, embassies and energy groups for the “Greece Offshore Licensing Round 2014” event on July 1 and 2, organized by Greece’s Environment and Energy Ministry with the support by the Greek Energy Forum, Natural Gas Europe and the ESCP Europe Business School. Up to a few days ago over 100 had already expressed an interest in attending, a figure which is expected to increase further by the deadline at the end of the month.
At the event Energy Minister Yiannis Maniatis, along with the ministry’s team for the ambitious project headed by Sofia Stamataki, the president of Hellenic Hydrocarbon Resources Management (EDEY), will present the first concessions for survey as well as utilization in Greece since 1996.
Sources have told Kathimerini that this first major round of concessions will include between 12 and 15 blocks. They are based on the interpretation of the seismic data collected by Norwegian company PGS Geo-Services. PGS has confirmed the original estimates concerning some interesting reserves in the Ionian Sea. The blocks are now ready on the map and according to the same sources have been formally recognized by a meeting on Wednesday between Maniatis and Deputy Prime Minister and Foreign Minister Evangelos Venizelos.
Some of the officials involved in the block-defining project described the process of drawing up the final details as particularly difficult as it took 50 parameters into account, the most important being the sea depth and the environmental conditions based on a strategic study by the Center for Planning and Economic Research (KEPE). This was necessary to avoid any environmentally sensitive areas as well as to adhere to agreements with neighboring countries such as that between Greece and Italy in 1977 concerning the two countries’ territorial waters in the Ionian.
A key parameter involved avoiding the creation particularly attractive blocks for concession in an effort to mix areas of high expectations with some of those seen to have a lower potential, for fear of having any remain unclaimed.
Another concern in securing investment interest was whether the barrier should be placed high, by setting criteria favoring oil industry giants, or allow small or medium-sized companies to participate in the tender too. The former idea was based on the fact that the seismic data have already been purchased by France’s Total and two more major companies, while there have also been repeated expressions of interest from firms such as ConocoPhillips, Statoil, BP, Shell, ExxonMobil, Chevron, Noble and others. According to the first idea, the tender should include a criterion on proven experience in a strong financial report. The other, however, means that if the major companies choose not to enter the process, Athens would have already have left out the smaller firms.
The winning idea will become clear once the terms of the tender are published in the Official Journal of the European Union, right after the presentation in London next month.