Tender for oil drilling targets sector’s giants

The international tender issued by the government last week for oil drilling in 20 areas in the Ionian Sea, Western Greece and off Crete, contains terms that can only be met by very large oil companies. Environment and Energy Ministry officials confirmed that these terms result from a targeted strategy to attract oil giants, mainly dictated by the great depths of the areas to be drilled.

The tender is expected to begin six months after its publication in the official gazettes of Greece and the European Communities. Small and mid-sized companies may participate in consortia led by very large operators, which include Greece’s Hellenic Petroleum and Energean.

The tender provides that the Greek government will receive 4 percent of the quantities of the hydrocarbons produced either in money or in kind, plus a 20 percent income tax. The investor will also pay a 5 percent regional tax. The operating period is 25 years (with an option for two five-year extensions) and will commence with the announcement of the discovery of commercially viable deposits.