Bad timing for tenders as oil rates decline

The first major opening of the domestic hydrocarbon market happens to have coincided with the unexpected and rapid decline in global oil prices. This has raised concerns in the Energy Ministry about two tenders for the concession of 20 blocks in the Ionian Sea and south of Crete, as well as three blocks in Arta-Preveza, Aitoloakarnania and northwestern Peloponnese.

Concerns became even more acute following a decision by Canada’s Petra Petroleum to withdraw from the Ioannina reserve by selling its 20 percent stake in Greek firm Energean Oil. The Canadian firm attributed its decision to a redrafting of strategy after its acquisition by Mitra Energy, which is mainly active in southeast Asia.

In the context of the decline of crude oil prices to below $54 per barrel, Greece is seeking investors who have the funds needed for drilling in great depths, which are generally considered unprofitable with the global oil rate below the $70 level. Every drilling that is 800-to-1,300-meter deep requires investments of 120-150 million euros, and for investors to survey an area they need to conduct at least two drillings.