Major interest in Greek hydrocarbon reserves

Eight of the world?s biggest seismic survey companies have expressed interest in investing about $40 million in exploring for hydrocarbons in Greece, sending a much-needed message of optimism for a Greek financial rebound.

The Energy Ministry confirmed on Friday that the bidders to conduct seismic and geological research for possible oil and natural gas reserves in four areas in western and southern Greece are US-based ION Geophysical, Norway?s TGS-NOPEC, Dolphin Geophysical and Petroleum Geo-Services (PGS), France?s CGGVeritas, Spec Partners, Spectrum Geo Ltd and Fugro Multi Client Services.

The participation in the first phase of the tender, which concerned the submission of binding offers, has exceeded all expectations, both in terms of numbers of bidders and in their profile, and illustrates the general interest of the global oil industry in Greece?s unexplored hydrocarbon reserves.

Speaking to Kathimerini, Deputy Energy Minister Yiannis Maniatis, who is leading the government?s effort for the utilization of the country?s mineral wealth, said that ?the submission of the binding offers for the tender constitutes a great message to both this country and abroad regarding the prospects opening up for the Greek economy.?

Market experts say that such interest has never been recorded before internationally, and that is because the usual practice is for direct concessions. However, Maniatis and his colleagues at the Energy Ministry have opted for an open international tender in a bid for complete transparency despite the risk of a very low number of expressions of interest. It was this very risk that had reduced expectations to no more than three or four bidding companies.

The Energy Ministry was brimming with satisfaction on Friday over the success of the tender, while Maniatis rushed to the Presidential Palace to inform President Karolos Papoulias of the development, following the latter?s invitation.

The interest expressed by the global industry?s most important companies bodes well for the interest to be expressed later when the drilling stage gets closer.

A ministry committee will now select one or two of the eight bidders by the end of April. The first revenues for the state are expected after the completion of the seismic survey and once the companies have depreciated their investment. The findings of the research will be sold on the market to drilling companies, with the surveying firms sharing their earnings with the Greek state.

The completion of the research will show to what extent the estimates about rich reserves of hydrocarbons in the Ionian Sea and south of Crete, based on geological data, prove correct.

The plan is for the first drilling to take place within 2012 and for the first revenues from oil reserve exploitation to come before the end of the decade. Maniatis said earlier this week that the estimated revenues for the state amount to 10-15 billion euros, depending on the quantity and quality of reserves.

The drilling for oil and natural gas reserves in Greece may not just increase the country?s revenues but also end its dependence on oil and gas imports, on which it spends billions of euros each year.

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