Yannis Maniatis: The Greek Mega Project for Hydrocarbon Exploration

Greek Energy minister, mr. Yannis Maniatis, presented today in London the so called Greece ’s Mega Project for the exploration of hydrocarbons in the Ionian Sea and Crete .

The minister made the following statements about the program:

Υ our Excellency,

Distinguished guests,

I am happy to welcome you to the Hellenic Centre. First of all I wish to thank his Excellency the Ambassador of Greece in London , Mr Konstaninos Bikas, the European Business School ’s Research Centre for Energy Management (RCEM) and the Greek Energy Forum.

Their assistance has been invaluable in organizing today’s event.

Ladies and Gentlemen,

Over the last few years, we have been following developments in the Eastern Mediterranean , with hope, anxiety, anticipation and impatience!

I am therefore delighted and excited that today the time has come, to take forward Greece ’s “New Horizons for hydrocarbon Exploration” in the Ionian and the sea south of Crete .

Today, we will be presenting the new data and the petroleum assessment of these vast seas, under-taken respectively by PGS, and BEICIP-Franlab.

But I am especially thrilled that today, we are also in the position to present:

1. the map of the blocks - the map which captures the essence of our work, together with
2. the legal and regulatory framework of the forthcoming licensing round – the “rules of the game” !

Today, is a milestone in Greece ’s journey towards becoming a significant oil and gas producer.

Today’s presentation of Greece ’s Mega Project is the result of 4 years of hard work by a dedicated team at my Ministry and its partners.

From the start, we made the commitment, to launch the tender for the Ionian and South of Crete by mid-2014.

Maybe we took a risk. But we stuck to our plan, overcame challenges and have successfully kept our commitment.

Now, there are some, who question the scale of our ambitions – who consider that economically exhausted Greece cannot possibly afford such big plans.

So allow me to spell out for you, the factors which show, why such pessimism is misplaced:

First: Economic recovery: I can report today that the Greek economy is recovering and coming out of its crisis. The worst is behind us. We have achieved a primary surplus and returned to the capital markets, for the first time since 2010. The recovery is supported by numbers: Exports are up, and we are having stronger shipping and record level revenues in tourism.

So, those who bet on Greece ’s exit from the euro, have lost. Instead, Greece and Europe have won the day: we have overcome the forces of pessimism.

Second: Political consensus: All major political parties support hydrocarbon development and most political forces wish to be associated with its future success.

In Greece , to promote this strategy is to be “politically correct”. In fact, I dare to say -that in my country- dissent on this issue is considered to be almost unpatriotic.

Third: Social acceptance: Greek society has rallied with pride around the hydrocarbons project.

The fact that it was shelved for fifteen whole years – from 1997 to 2012 –was regarded by many, as a betrayal of Greece ’s potential, a betrayal for future generations.

Its re-start is strongly supported.

- Our pledge to manage and distribute respective revenues to the Greek Social Security System, from a specially created “Fund for Future Generations”, is strongly endorsed.

- Our (belief) conviction that our resources will benefit the economy’s overall competitiveness, is widely shared.

In fact, to tell you the truth, the promising prospects for society and the economy, have been our inspiration and are sustaining the momentum of our work.

Fourth: EU endorsement: Events in Ukraine and Iraq are highlighting, the risks of Europe ’s excessive dependence on energy imports….and their cost is a drain on the economy.

Last year, the EU’s external energy bill was more than €1 billion per day, about 3.1% of its GDP – Too Much. Don’t you think?

Today, ensuring diversified domestic supplies is not an option. It is a non-negotiable priority.

In the face of declining traditional domestic supplies, it is of no surprise that the EU’s quest is to promote new resources, from the Eastern Mediterranean .

Nor should it surprise you that the Leaders of the G-7 and the 28 Heads of State and Government have unanimously recommended that exploration of indigenous sources and the development of infrastructure connections be intensified.

- Greece ’s development of hydrocarbons is part of the European effort.

- Our approach is a response for implementing its recommendations.

- Indeed our strategy is at the very core of the EU’s strategy for diversification of sources and routes.

Fifth: Greece is an emerging hub: By the end of this decade, Greece will be a hub of a single, interconnected and competitive energy market in South East Europe. Just take a look at the map behind me….

How is this happening?, you ask.

1. Due to our Geographical location: You see that, we are at the cross-roads of markets in West and South East Europe, and new and traditional sources, making Greece the EU’s gateway for the Southern Corridor.
2. Due to our Infrastructure policy: We already have gas connections with Bulgaria and Turkey , as well as the region’s most important LNG terminal.

In addition to this, the EU is supporting as priorities, the development of 12 major Projects of Common Interest in Greece – 9 in the gas sector.

3. Due to Greek Shipping: The biggest tanker fleet in the world…. The world’s largest floating oil and gas pipeline.
4. Due to our goal: To promote the EU’s strategy for open, liquid and integrated energy markets in S.E. Europe.
5. With TAP, IAP and the Greece-Bulgaria Interconnector, South East Europe will have access to Western Europe ’s major hubs, leading to more diversified gas portfolios, more gas to gas competition, and much more competitive prices.
6. And all this access will be happening via Greece , and Greece is becoming an integral part of the region’s energy security.

So clearly, Greece ’s target to become a significant oil and gas producer is not just a Greek myth.

It is based on undisputable evidence.

Most importantly, it is consistent with and supported by the EU’s energy security strategy.

Greece ’s promotion of hydrocarbons is equally based on solid foundations.

As you can see in the new slide, we started from relative Terra incognita - or rather - I should say Mare incognitum.

But we have come a long way.

We have created the necessary pre-conditions and investment environment for successful state of the art Exploration and Exploitation of hydrocarbons.

In making our plan, no short-cuts were taken, and we have not settled for less than the best.

The result is that today we are offering our international investors a series of advantages:

1: A revised legal framework which integrates the latest trends and the best international practices for concession rights. In creating this, we have capitalized on the know-how of leaders such as Denmark , Norway and Britain .

The result is an updated, transparent and competitive set of rules, providing investors with a stable and predictable level playing field.

2: A most favorable tax-regime, which we dramatically cut from 40 to 20%. And we have done this in order to incentivise our investors to invest in the future of Greece , in order to become the competitive place to do business.

3: An efficient Authority. The Hellenic Hydrocarbons Management Company is established. It will start operating in the near future with highly qualified staff with international experience.

Its task: to regulate, license and monitor exploration and exploitation activities on behalf of the Greek State .

Its role: to provide a stable and credible interlocutor with the State.

4: EU rules, on safety for off-shore oil and gas activities. We are completing the transposition of the relevant Directive, setting out clear provisions, in consultation with stakeholders and industry.

5: A Data base established by PGS from an extended multi-client seismic survey, aptly named “Greece Mega Project”.

This covered 225 thousand square klm in Western Greece and South of Crete.

It is the largest regional seismic survey ever under-taken for Greece ’s off shore. But we did it, to provide you with a regional grid with high quality data of Greece ’s frontier basins, which you see in the new slide.

6: Interpretation of this data by the distinguished French institute BEICIP. This ensures the most accurate identification of clear and detailed geological structures, meeting requirements for the generation and accumulation of oil and gas.

7: Registered Vote of Confidence: The Open Door Tender which we launched for 3 blocks in onshore and offshore Western Greece resulted in the signing of 3 contracts, which are now in the process of ratification by the Greek Parliament.

In addition, the possibility for Individual Initiative licensing has already led to 4 applications of Interest, regarding areas in the West and North of Greece, as shown in the map behind me.

This is obviously a vote of confidence by industry, for our strategy and procedures, and demonstrates conviction for Greece ’s hydrocarbon potential.

And finally, today we are providing you, with what you have all come here to see!!

8: A map of 20 blocks in the Ionian Sea and the Sea South of Crete, waiting for your bids!

Take a look – a map of Greece ’s new frontier area in the heart of the Mediterranean based on the interpretation of the seismic data – which is also now available.

We know that a critical point in the license round is the geometry and the extent of the blocks.

In drafting the map, our experts took 50 parameters into account, most importantly the sea depth, geology and the environmental conditions based on the on-going Strategic Environmental Impact Study.

We already knew that important analogues with areas in Italy and Albania , attested the high hydrocarbon potential in theses Seas .

Now is the time to exploit and maximize the potential of these blocks, the time for you – the doers, the makers of things.

I have been diligently and passionately working to reach this stage…

Now, I ask you : join me, and let’s finish the job…