A group of major energy companies have submitted bids to explore for oil and gas off the coast of Greece, showing heightened interest in the Greek economy and providing an opportunity to strengthen energy security in southern Europe and the EU.
U.S.-based Exxon Mobil, France’s Total SA, and Spain’s Repsol SA are members of two different consortia, both of which jointly bid with Hellenic Petroleum to explore oil and gas fields of Greece’s coasts, one near Crete and the other in the Ionian Sea. While these industry heavyweights are still waiting for approval from Greece’s Energy Ministry, the country’s energy minister George Stathakis said that the bids alone are “a vote of confidence in the prospects of the Greek economy and the country’s role as a stabilizing factor in the southeast Mediterranean region.”
If pushed through, these exploration projects could be a big boon to Greece’s domestic energy sector, which is largely dependent on imported fossil fuels. “Oil is the most-significant fuel, and the country is almost entirely dependent on oil imports,” wrote the International Energy Agency (IEA) in its 2017 review on Greece. This poses a potential problem from a security standpoint because of Greece’s reliance on Russia for its energy imports.
“Insignificant crude oil and natural gas production leaves Greece reliant on imports for those fuels. … The Russian Federation is the largest supplier of natural gas to Greece and the second-largest source of crude oil after Iraq,” according to the IEA report.
Not only would new oil and gas finds in Greek waters help diversify Greece’s own energy supply, but it could also help to significantly reduce the EU’s reliance on Russian energy. Greece is currently working with Cyprus, Italy, and Israel to construct the EastMed Gas Pipeline to channel newly discovered gas in the eastern Mediterranean into Europe. They plan to sign an intergovernmental agreement on the project later this year, with hopes of completing it by 2025.
Another new pipeline, the Trans Adriatic Pipeline (TAP), has been under construction since 2015 and plans to transport natural gas from Greece through Albania and the Adriatic Sea to Italy and then on to Western Europe. It is expected to be fully up and running by 2020.
The gas moving through these pipelines could come from the fields soon to be explored, along with resources from two natural gas fields off the coast of Israel that Greek energy explorer and producer Energean Oil & Gas is developing.
An added bonus of the Mediterranean fields’ development could be to assist Greece in hitting its clean energy targets. Currently, domestic production is dominated by coal, according to the IEA. Greece’s remaining energy production comes from renewable energy sources, while natural gas production is “negligible,” reported the IEA.
Any natural gas found off Crete and in the Ionian Sea would change country’s energy portfolio and assist Greece in following through with its National Renewable Energy Action Plan, which includes increasing natural gas utilization while decreasing fuel oil and lignite use.
Other southern EU countries are already taking advantage of the gas bonanza in the eastern Mediterranean. Cyprus’s Aphrodite field, discovered in 2011, contains an estimated 4.5 trillion cubic feet of gas, while some estimates put that number as high as 8 trillion cubic feet. It is expected to begin exporting in 2019. Italy’s Eni SpA is involved in developing many of the eastern Mediterranean fields, including some of Cyprus’s fields and Egypt’s massive Zohr field.
All of this bodes well for a clean and secure energy future for Europe.