Greece is believed to possess undersea natural gas reserves worth an estimated $200bn before global energy prices tanked this year. But as economies reopen and demand slowly recovers, the outlook for unlocking Greece’s energy riches has grown bleaker, say industry executives and analysts, as Athens’ lumbering bureaucracy and growing friction with neighbouring Turkey compound already challenging market conditions.
Natural gas prices were already under pressure at the start of the year, thanks to oversupply. Then coronavirus lockdowns, a mild winter and an oil market rout conspired to suppress gas prices even further.
Consumption of natural gas is expected to fall by 4 percent this year, as the sector deals with the unprecedented shock, said the International Energy Agency.
As energy prices have fallen, energy majors have put oil and gas assets up for sale in an effort to cut costs and hoard cash to weather the downturn.
This has helped pull the rug out from under hydrocarbon exploration in frontier territories like Greece, exacerbating the already repellent effect of red tape from Athens that has yet to spell out environmental rules for offshore drilling - an essential first step towards issuing permits.
France’s Total is in advanced talks to transfer its share of exploration block 2 in the Ionian Sea to its local Greek partner, Energean, a senior Greek energy executive, told Al Jazeera.
ExxonMobil has announced it will be focusing investments on Egypt where it recently acquired two offshore exploration blocks. Many in the energy industry interpret the move as a clear demotion of ExxonMobil’s operation in Greece, where it has acquired two deepwater blocks south and west of Crete.
“The concessionaires have a lot of work to do [off Crete], and they haven’t received permits. Rather than wait, they are moving to places where they won’t have delays,” said Charles Ellinas, CEO of Cyprus Natural Hydrocarbons Company (CNHC). “I think this is why ExxonMobil’s interest is moving to Egypt. The government makes it very easy to do business there.”
