Greece and Cyprus: Grand Challenges and Great Opportunities in East Mediterranean Gas - MODERN DIPLOMACY

May 1, 2019
Antonia Dimou

Greece is a country with many unexplored promising oil and gas fields.In fiscal terms, investments in hydrocarbon development and production throughout the country are highly competitive and attractive. From a hydrocarbon exploration perspective, offshore Crete in Southern Greece presents a frontier area that faces two major challenges namely a combination of very complex geological history and ultra-deep waters exceeding three thousand meters in most areas.

Following the “Call for Tenders for the exploration and exploitation of hydrocarbons Offshore West Crete and Southwest Crete” in March 2018, the consortium of French Total, American ExxonMobil and Hellenic Petroleum (Helpe) was granted by Ministerial Decision in July 2018 rights of hydrocarbon exploration and production for two offshore blocks in West and Southwest Crete. The exploration stage is expected to last up to eight years, and in the event of a commercial discovery, the production lease agreement is set tobe valid for 25 years plus two five-year extensions. Currently, the concessions awarded to the consortium are expected to pass in the Greek Court of Audit. This will prompt a swift parliamentary ratification permitting the initiation of exploration activities.

Additionally, the Hellenic Hydrocarbon Resources Management Authority intends to declare a new licensing tender for other offshore blocks in south Crete. To this end, the Authority published in February 2019 a tender for the Environmental Study that is prerequisite for companies to commence exploration once they are awarded certain concessions.

Israel and Cyprus: Untying the Gordian Knot on East Mediterranean Gas - MODERN DIPLOMACY

NOV 27, 2017

Antonia Dimou

Gas exploration and drilling activities in Israeli and Cypriot waters along with licensing rounds for blocks near the super-giant Zohr gas field raise the likelihood for large gas discoveries in the East Mediterranean. Israel and Cyprus speed up efforts for the development of energy resources to be primarily channeled to Europe.

Europe is considered as prime export destination for regional supplies of liquefied natural gas given that the continent is seeking to enhance energy supply and transit security.

Israel seems to be taking two steps forward and one step back on natural gas. A renewed Israeli gas regulation framework has portended a competitive market as new companies acquire offshore drilling rights. It is in this context that a Greek company, Energean Oil and Gas has secured full ownership of Israeli Karish and Tanin gas fields at the price of 148 million dollars aiming to deliver 88 billion cubic meters (bcm) of natural gas to the Israeli market in the next forty years. The Greek company has submitted a field development plan to the Israeli government and secured sales agreements for more than 3 bcm annually at a 20 percent price discount compared to Leviathan partners’ pricing to Israeli power provider Dalia Power Energies and its sister company Or Power Energies. This arrangement has set the stage for competition that will benefit consumers and the Israeli economy.

Lebanon and Syria: Stuck between a rock and a hard place on natural gas - MODERN DIPLOMACY

JAN 12, 2017Antonia Dimou

The East Mediterranean’s gas resources can promote cooperation, resolve conflicts and turn the region into an energy hub presenting new prospects for Lebanon and Syria.

Lebanon is currently in need to diversify its energy mix away from oil in order to strengthen its security of supply but lags behind neighboring Israel and Cyprus in developing its gas reserves in the East Mediterranean. 3D seismic surveys carried out by the Norwegian Spectrum company have estimated recoverable Lebanese offshore gas reserves at 25.4 trillion cubic feet. The development of Lebanon’s hydrocarbon resources nevertheless faces significant challenges at political and economic levels, namely the skyrocketing public debt, an unstable regulatory framework, and a weak administration attributable to the sectarian nature of the country’s political system.

Israel and Cyprus: In search of solutions to natural gas challenges in the Eastern Mediterranean - MODERN DIPLOMACY

October 10, 2016, by Antonia Dimou

The Eastern Mediterranean’s gas resources can promote cooperation, resolve conflicts and deliver financial benefits, resulting in contributions to the economic development of Israel and Cyprus.

Gas discoveries in Israel have the potential to transform the country’s energy outlook but despite opportunities, the exploration and development of gas fields with proven reserves have faced a stalemate due to regulatory issues and political concerns.

In an effort to overcome obstacles and reignite a number of preliminary agreements to export gas, the Israeli government approved a revised framework for gas regulation that favors the development of Leviathan and the expansion of Tamar fields seeking to establish a stable business climate and paving the way for Israeli gas to be exported. The main outlines of the gas regulatory framework center on the mandatory sale by Noble, Avner Oil & Gas and Delek of all their rights in the Israeli Tanin and Karish fields; and, a stability clause which foresees that the Israeli government guarantees regulatory stability for ten years. Additionally, as prescribed, the development plan of Leviathan field whose 9 billion cubic meters (bcm) annual gas surplus is destined for export will be carried out in two stages: The first lies in four development wells and an annual capacity production of 12 bcm. The second lies in four additional wells and an increase of the capacity production by another 9 bcm. Leviathan’s exports are destined to satisfy Israeli domestic demand, Jordanian and Egyptian power and industrial needs, as well as Turkish ambitions of becoming a hub for Eastern Mediterranean energy.