Government urged to declare Greece’s EEZ

The moment Israel’s huge Leviathan natural gas deposit officially reared its head from the ocean last year, it became clear that the energy and geopolitical balances in the region are likely dramatically to change. And the consensus is that the development offers major economic and strategic opportunities for Greece.

The shifting energy map has almost overnight broken a decades-long taboo in Greece – largely due to Turkish threats – namely, the public debate over the exploitation of the country’s oil and gas deposits. 
Now the debate has surfaced with a vengeance, with a loud chorus of opposition parties and scholars forcefully urging the government to declare Greece’s exclusive economic zone (EEZ), the 200-mile span in which a country has sovereign rights to exploit natural resources under the international law of the sea. (Please follow this link in order to find out more information about the EEZ –http://en.wikipedia.org/wiki/Exclusive_Economic_Zone )
Public discourse will likely be fuelled by an announcement on February 2 by a researcher at the French oil and gas industry consultants Beicip-Franlab, which advises the Cypriot government, that a natural gas deposit that may match Leviathan lies at the border between the Cypriot and Greek EEZs.
Turkey threatens
For over three decades, Turkish threats have halted any Greek exploration of the Aegean, due to Ankara’s territorial claims and its refusal (despite EU urgings) to adopt the 1982 UN law of the sea convention, which defines EEZ rights and recognizes that islands have a continental shelf. 
The Turkish exploration vessels Hora (1975), Sismik (1987) and Piri Reis (which last July sailed to Kastellorizo with Turks and Canadians) all entered Greek waters and EEZ areas for seismic research for hydrocarbons, in moves that produced intense bilateral tensions. Andreas Papandreou as opposition leader publicly called for the sinking of the Hora, and when he was prime minister the two countries came closer to war than during the 1996 Imia crisis, when the Sismik entered Greek waters. 
The tiny, Greek island of Kastellorizo (please follow this link in order to learn more about Kastelorizo –  http://en.wikipedia.org/wiki/Kastelorizo ) is the geographic point that links the Greek and Cyprus EEZs, offering Greece access to the potentially huge natural gas  deposits where they overlap. That is precisely the reason that Ankara has reportedly refused to include the island in ongoing talks with Greece on the delimitation of the continental shelf.

But Turkey is only part of the problem. The Greek state has systematically underfunded or thwarted energy exploration, according to several Greek researchers who were interviewed in a TV expose by reporter Kostas Chardavelas last month. In the area of Grevena, according to Patra University geology professor Abraham Zelilidis, drilling by the private firm Enterprise Energy found pressure suggesting oil deposits, but the company abandoned the project. In 1999, he said, the state ignored indications of substantial deposits in the Gulf of Patra after the Triton prospecting company went bankrupt and sold the rights to Enterprise, which was later bought by Shell. 
All this accounts for the fact that the government will begin prospecting for oil and natural gas in western Greece. The deputy environment minister, Yiannis Maniatis, told Bloomberg on February 3 that it will parcel out 4-5 blocs, and companies will be picked within two years. 
Oil and gas exploration was the subject of heated discussion in parliament on January 10, where New Democracy leader Antonis Samaras ( please follow this link to find out more about Antonis Samaras – http://en.wikipedia.org/wiki/Antonis_Samaras ) and Laos president Yiorgos Karatzaferis demanded that the government immediately declare its EEZ and proceed with its delimitation with any of Greece’s willing neighbors.
Prime Minister George Papandreou told parliament that he intends to proceed with delineation of Greece’s EEZ with its neighbors, but in the manner and time frame that the government judges will serve the national interests. He has repeatedly underlined that Turkey’s tactics will in no way affect Greek sovereign rights. 
There are signs that the prime minister wants to get down to business on energy. In December, the cabinet approved the creation of an agency to coordinate oil and gas exploration, which experts say will take at least a year-and-a-half to start operating.
Kostis Stambolis, who heads the Greek-based Institute of Energy of South-East Europe (IENE), told the Athens News that the 200,000 euro budget earmarked for the hydrocarbon exploration agency is inadequate. The IENE said in the public consultation on the bill that at least two million euros is needed.
Now that it is becoming ever more clear that the energy jackpot lies in the Mediterranean, Turkey cites its size and population to seek a share of the pie. It had already expressed its intentions by laying claim to the Greek island of Gavdos, south of Crete, when Turkish warplanes visited in May 1996. The Piri Reis vessel conducted a seismic exploration mission near Kastellorizo last July.
Meanwhile, Basil Markesinis, a legal scholar and member of the Academy of Athens, has argued in several articles that fear of Turkey has kept Greece from exercising its rights.
Oil expert Ilias Konofagos told the Athens News that Greece, like other countries, should conduct 3D seismic research and sell the information to oil and gas companies, before declaring the EEZ.Greek analysts have stressed the geopolitical risk of Greece’s appeasement of Turkish demands.
Ioannis Mazis, a professor of economic geography at Athens University, has argued that if Greek territorial waters are at all reduced either in the Aegean or the southeast Mediterranean, Greece risks Finlandisation (the influence that one powerful country may have on the policies of a smaller neighbouring country), in which no step could be taken without Ankara’s approval. 
But Athens University professor emeritus Theodoros Kouloumbis, among others, argues that in the midst of an economic crisis, it is no time to pick a fight with Turkey. “That’s not fear, it is just common sense,” he told the Athens News. Kouloumbis believes that before Greece proceeds with prospecting, the two countries should agree on both the delimitation of the Aegean continental shelf and the EEZ in the Mediterranean.
Greece has long resisted Cyprus’ calls to delineate the two countries’ EEZs. A Cypriot energy official, Solon Kassinis, told this newspaper that Athens can first delineate its EEZ with Libya, as Turkey’s EEZ is nowhere near.
Last June, on a trip to Tripoli, Papandreou signed a memorandum of understanding with Libyan leader Muammar Gaddafi that included energy cooperation but no word on EEZs.
Greece’s decades-long failure to develop a national strategy for energy exploration strategy has been a disaster, Ilias Konofagos, a former director of hydrocarbon research at Hellenic Petroleum (ELPE), told the Athens News in an interview. “Over the years, we constantly sent proposals to the development ministry to create a state hydrocarbon research agency, but it never happened. That delay is criminal,” he said.
Konofagos stresses that the synergy between Cyprus and Israel creates a huge geopolitical opportunity for Greece. “The United States Geological Survey has said that there are about 15 trillion cubic metres of natural gas and oil in the area between Crete, Cyprus, Israel and Egypt.”
The prospect of a natural gas underwater pipeline to Greece that would transport gas to Europe is one possible benefit.Also, with the destabilisation of Egypt, oil companies may well look to Greece, he believes. Konofagos says the perennial problem persists, as the government’s planned state agency for energy exploration puts the cart before the horse. “No country has created an agency before hammering out a comprehensive strategy,” he says.
And he warns that the 18-24 months it will take for the new state agency to start moving represents a huge opportunity loss. “In this timespan, the face of southeastern Mediterranean will have totally changed, and Greece will definitely miss the train.”
Konofagos insists Greece should move now. “We should immediately parcel out research concessions, as Cyprus did, and start exploration south of Crete, even if it is smack off the coastline,” he stressed. “Isn’t the area right under Chania Greek? I find myself searching to find where is Greece,” he quips bitterly. In the Ionian Sea, where the government intends to prospect, research shows there are about 2bn barrels. “When under Crete there are anywhere between 25 billion and 120 billion barrels, how can the Ionian be a priority?” 
But the oil expert concedes that government officials are likely not to do that due to Turkish threats. “When I participated in a foreign ministry committee on energy, I saw that the diplomats were excellent but fearful. They didn’t want to rock the boat.” He notes that analysts believe a Greece-Albania agreement delineating the two countries’ EEZs was scuttled by Turkey, which rented a naval base in Albania’s Vlore. “It seems Turkey is pressuring Greece not to prospect anywhere before we agree on the Aegean.” But the Greek state policy has dealt a major blow to energy exploration, so much so that some suggest that government policy is dictated by major oil and natural gas importers, who would lose if Greece produces gas. 
Konofagos puts it somewhat differently. “Greeks are merchants and don’t have a culture of hydrocarbon research and production. A natural gas franchise was the investors’ objective.” “Governments had the political will to facilitate private natural gas importers, but none to attract research. We woke up when we saw everyone else had already done it.” 
ELPE started in 1975 as a state prospecting company. It spent about 300 million dollars and found only two very minor deposits that would cover Greece’s energy needs for four months, Konofagos says. 
The state’s major blunders, according to experts, was the decimation of the state-controlled DEP-EKY hydrocarbon research agency. In 1998, when Vaso Papandreou was the competent development minister, it was absorbed into ELPE. ELPE was about to be listed on the Athens stock exchange a few months later.In 2007, financier Spiro Latsis’ group bought 35 percent of ELPE. ELPE’s prospecting activity has been limited to foreign countries such as Egypt and Lebanon.“The mistake with DEP-EKY is that it should have found private partners,” Konofagos said.  That left Greece without an agency which could grant concessions, as EU regulations require that concessions be granted by a public agency. 
When the Greek government announced its intention to begin prospecting in western Greece, geologist Antonis Foscolos said it was far off the mark.
A professor emeritus at the University of Crete who for decades was a Canadian government advisor, Foscolos told the Athens News in an interview that Greece’s hydrocarbons can go a long way in paying off the national debt. But the energy expert is convinced that the state’s failure to pursue research and exploration is due to the expansive political influence of energy importers.
“A handful of energy importing companies is what we must overcome to see better days. Importers of natural gas sell it at 8-9 dollars per gigajoule. Based on a decision by Dimitris Sioufas when he was development minister, they sell it to the Public Gas Corporation (Depa) at a rate that is just 15 percent cheaper than oil – with a 250 percent profit,” he said. 
“These middlemen have done everything to block hydrocarbon exploration in Greece,” he added. “We need 3D seismic studies, costing around 50-60 million euros, to study energy-rich areas. The government won’t spend it, but it can spend 500 million euros for a storage area for imported natural gas in Prinios, to be sold at an exorbitant rate,” he notes. 
The two jackpots, Foscolos says, are in the area south of Crete, and the Herodotus basin, part of which, by virtue of the Greek island of Kastellorizo, falls within the Greek exclusive economic zone (EEZ). Half of the basin lies in Egypt’s EEZ, and a quarter in Cyprus’ and Greece’s, respectively. 
The existence of mud-flow volcanoes spewing gas south of Crete is one of many indications that there may be large natural gas deposits there, and the work of French and British researchers since 1980 confirms it.
“Mud volcanoes all over the world have been a marker for hydrocarbons. The Egyptians had nine mud volcanoes and started prospecting – and they found 2.2 trillion cubic metres of natural gas and 2bn barrels of oil in their EEZ. In the Black Sea, Turkey and Exxon Mobil are drilling exactly in areas with mud volcanoes. The Turks are not interested in Aegean oil – they are playing geopolitical games with us,” said Foscolos. 
As for the Herodotus basin, Foscolos said that Norway’s TGS NOPEC conducted seismic research for the Egyptian government. They referred to the areas in Greece’s EEZ as “Greek zones”. “It would cost Greece 500,000 euros to buy the information”, he said.
  • Gulf of Patra
  • Katakolo
  • Arta, western Greece
  • Prinos 
  • Ionian Sea (Kefalonia, Paxi)
  • South and southeast of Crete
  • East of Prinos (Stavros, Maronia, Sapes, eastern Thasos)
  • Kavala
  • Limnos – Agios Efstratios islands
  • Between Limnos and Chios

*Source – Athens News – Original article published February 6, 2011

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