Last week’s developments create significant expectations for Greek hydrocarbons, both in the 4 new areas under exploration south of Crete and the Peloponnese as well as in “Block 2” in the Ionian which is at a more advanced research stage. The 4 new areas, following the completion of the international tender announced in June, are heading toward concession to the Chevron / Helleniq Energy Consortium, while for “Block 2” as officially announced by Energean’s head Mr. Mathios Rigas, the initial estimate for potential resources is set at 7 tcf (200 billion cubic meters) of natural gas.
Kyriakos Mitsotakis: Domestic hydrocarbon production will establish our country as a pillar of energy security
The developments, beyond economic significance (investments, jobs, energy self-sufficiency and reduction of expenditure for hydrocarbon imports if reservoir exploitation becomes feasible) also have great geopolitical importance for our country. As Prime Minister Mr. Kyriakos Mitsotakis noted last week during a meeting with U.S. Secretary of the Interior Doug Burgum, Chevron’s expression of interest in exploratory activities in the area south of Crete confirms the sovereign rights of the Hellenic Republic in this region. Furthermore, domestic hydrocarbon production will establish our country as a pillar of energy security for the EU, not only at the level of energy resource transit (which already occurs) but also supply.
The tender for the 4 areas (“Block A2”, “South of Peloponnese”, “South of Crete 1” and “South of Crete 2”) was announced following interest expressed by Helleniq Energy for the first and Chevron for the other 3. Last Wednesday, with the deadline’s expiration, the two companies jointly submitted a bid for all 4 areas. The bid evaluation committee has already been formed and will be followed by the drafting and signing of contracts and their ratification by Parliament. In the case of “Block 2” in the Ionian Sea (30 km west of Corfu with the western boundary being the Greece-Italy maritime border), the concession contract was ratified in 2018 and the current lessees are the Energean Consortium (75%) and HELLENiQ Upstream (25%).
As announced by Mr. Mathios Rigas, CEO of Energean, during the analysts briefing on the group’s half-year results, the initial estimate for potential resources (gas initially in place according to relevant terminology) ranges at 7 trillion cubic feet or 200 billion cubic meters of gas. However, to verify whether there is an exploitable reservoir and to what degree requires exploratory drilling. Given the cost and investment risk of drilling, according to relevant information, the Energean – HELLENiQ consortium is seeking a partner to participate in the venture. Water depths in “Block 2” range from 500 m to 1,500 m, while the existence of a confirmed petroleum system in Western Greece (Western Katakolo) and the Adriatic Sea makes this area particularly interesting. It should be noted that Energean has also requested from Italy the concession of the adjacent maritime area for exploration.
With the addition of the 4 new ones, the areas that have been or are being granted for hydrocarbon exploration increase to 9. The other 5 are Area 2 (75% Energean- 25% HELLENiQ), the Ionian Block (100% HELLENiQ), Area 10 (Kyparissiakos Gulf, 100% HELLENiQ), the areas West and Southwest of Crete (70% Exxon, 30% HELLENiQ). The onshore area of Ioannina has been returned to the State while for the confirmed reservoir in Katakolo there is a pending issue regarding the marine park to be declared in the Ionian. Production exists in the Prinos area by Energean.
