LOOKING AHEAD

Greece turns to oil and gas for financial salvation

As part of its response to the country’s economic andfinancial crisis, Greece is to promote the development ofoil and gas production. In the short term, any productionwould reduce the country’s large and growing bill forimports of oil and gas. Revenues from production wouldalso boost the government’s tax-take and possibly reducethe need for future borrowing to fund the country’sdebt-ridden public sector.

Greece’s production of both oil and gas is minusculeand its proven reserves are very small in world terms(see Table Q), but the government is encouragedby results from exploration elsewhere in the EasternMediterranean, especially off nearby Cyprus. It isproposed to offer more than a dozen blocks forexploration between now and the end of 2014. Themain outside interest appears to be in the prospects fornatural gas, but there are also hopes of new oil finds.

Revival ahead?

Until the 1980s Greece was a minor producer of oil withan output of just less than 30,000 bpd of oil, but by 2013,production had fallen to about 2,000 bpd. Productioncomes from the small Prinos and South Kavala fields inthe northern part of the Aegean Sea. In 2013, it awardedexploration licenses for another offshore block namedKatakolo and an onshore block named Ioannina to anumber of small independent companies. Exploration isalso set to take place at Patraikos, which is near Katakolo.

None of these areas, however, are expected to producemuch in the way of oil. The main interest is expectedto lie in waters off western Greece and south of theisland of Crete: in the Ionian Sea and the EasternMediterranean. A seismic survey of these areas began inNovember 2012 and the full results should be availablein early 2014. If the results show the existence of suitablestructures, the next stage for Greece will be to establishan exclusive economic zone offshore as the prelude toa licensing round. However, this may not prove to bestraightforward because part of the seas off Greece is alsoclaimed by Turkey.

There is considerable optimism in Athens over thepossibility of large finds in the Eastern Mediterraneanfollowing recent announcements of significant discov-eries off the Levant, with particular interest focused onCyprus. There are also encouraging signs for the watersoff Lebanon and Israel [1].

Eastern promise

About 75.5 trillion cf gas reserves have been tentativelyidentified in the seas to the east and south of Greece

Table QGreece: Oil & Gas Profile, 2013

OILProven Reserves 10 mn bbl∗

(bpd)Production 2,000Consumption 300,000Net Imports 298,000

NATURAL GASProven Reserves 35 bn cf*

(mn cfd)Production †

Consumption 385Net Imports 385

∗As of 1.1.13†NegligibleTotals roundedSource: (Reserves) Oil & Gas Journal

(Other) Pearl Oil forecast

Table REastern Mediterranean: Projected Gas Reserves, 2013

Country Reserves(trillion cf)

Cyprus 25.0Israel 25.0Lebanon 15.0Syria 8.5∗Northern Cyprus 2.0Total 75.5

∗ProvenTotals roundedSource: Country/company data

(Syria) Oil & Gas Journal

(see Table R) and the total could easily rise as furtherexploration takes place. The reserves off Cyprus areestimated at 25 trillion cf. Off Israel, one field alone,the Leviathan, is projected to hold 19 trillion cf, andIsrael is already planning to become a net exporter ofgas. While these reserve numbers remain projections atpresent, they do indicate considerable potential acrossthe region. Israel’s proven reserves have already risenfrom 1 trillion cf in 2010 to over 9 trillion cf atthe beginning of 2013: potential reserves are evenhigher.

Commercial gas discoveries are of particular interestto Greece, which is trying to reduce both its importsof gas and its dependence on Russia, which accountsfor about 55% of domestic Greek supply. There havebeen various attempts to diversify sources of supply,beginning in 2000 with the import of liquefied natural

© 2013 John Wiley & Sons Ltd

OIL AND ENERGY TRENDS, NOVEMBER 2013 LOOKING AHEAD 19

gas (LNG) from Algeria and, more recently, with plans tolink Greece to various long-distance pipelines designedto bring gas from the Caspian and Middle East inthe future to Europe [2], but domestic productionwould be the best option of all in the opinion of mostGreeks.

References1. Focus: Mediterranean gas: full of eastern promise?

Oil and Energy Trends 2013; 38:5; 3-6.2. Gas and Power: Caspian gas pipeline moves a step

nearer. Oil and Energy Trends 2012; 37:8; 7-8.

© 2013 John Wiley & Sons Ltd