ECONOMY

Greece finally starts quest for oil

After 15 years of inertia, Greece has initiated the process for hydrocarbon exploration in areas deemed safe from geopolitical disputes.

The Environment, Energy and Climatic Change Ministry this week issued an invitation for expressions of interest in preliminary work for the offshore exploration, that is, non-exclusive seismic surveys, in the Ionian Sea to the west and south of Crete. The specialized 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 in about three months, and the aim is for the second round of concessions for exploration to begin before the end of 2012.

The process of non-exclusive seismic surveys is a method that enables specialists to explore broad areas fast and effectively with the use of state-of-the-art technology, obtaining deep imaging of geological structures and deposits. The results to be obtained from this process will be handed to the government, while the surveyors will retain the right to make the data available to prospecting oil companies for a specific period. The government also expects to raise revenue from the distribution of the research data, but the most important source of projected revenue will be the granting of concessions in the second round. The ministry projects that the finds will produce oil worth 40 billion euros over 15-20 years, of which the state will take 10-15 billion.

Domestic production will also lessen the country?s dependence on oil imports, as 99.5 percent of the oil refined in Greece is imported and costs more than 4 percent of gross domestic product.

The invitation for expressions of interest came after consultations with specialized companies in the field, including Norway?s state-controlled Statoil. According to ministry sources, unofficial interest was expressed by six companies during the consultation stage and at least three are expected to respond officially. For the second stage of exploration, interest is said to have been expressed by US-based Noble Energy, which is also undertaking exploration for Israel and Cyprus, Statoil, Shell, Cyprus?s Energean Oil and Hellenic Petroleum.