In the first stage relating to the granting of large concessions in the Ionian Sea and Crete in September, the strategy of the Greek Ministry of Environment and Energy provides for the involvement of medium and large oil companies, strict compliance with the proposed action plan on the part of the investors, depositing the relevant amount of guarantees and protection of sensitive environmental areas.
In parallel, the oil industry in turn had requested Greece to ensure clear conditions, as stated by senior officials from the Ministry of Environment, who took part in closed meetings in London.
At an informal meeting with journalists, the competent employees of the Ministry of Environment presented their first impressions from the talks in London, and explained that the features of the concession areas (deep-sea pools) require significant investments that small companies cannot afford. According to the experts, they could participate in the contest, but only as part of large corporations. They defined the response of the oil market as positive, even beyond expectations, and stressed that the meeting in London involved major companies like Shell, ExxonMobil, Chevron, Total, ΒP, Statoil, the German ΕΟΝ and the Italian ΕΝΙ and ΕΝΕL.
According to the same senior officials from the Ministry of Environment, during the closed meeting in London, the representatives of the companies had asked the Greek side to secure "a precise schedule, clear rules and a transparent evaluation system." The same officials stated that they had not commented on the size of the blocks planned for concessions nor had they expressed negative opinions about the costs associated with the seismic features of the region. They also explained that the Norwegian PGS company had not billed the latter type of costs as the approval of the Greek state was required for this, and the costs were determined based on the international practice. The experts also stressed that the revenue percentage for the Greek state varies, amounting to up to 54%.
According to the same representatives of the Ministry of Environment, the demarcation of the blocks was carried out based on a number of parameters, such as the oil capacity of the area and the density of the lines, but also on environmental issues as well as on the international technology available to explore greater depths. As for the latter, the Ministry of Environment has excluded from the concessions an area in the southern Ionian Sea, where the depth reaches 2.5 thousand km because there is no internationally certified technology for drilling at that depth. According to the experts, this area may be included in the next stage of concession granting, when the technology will be advanced.
The senior officials from the Ministry of Environment also specified that the first stage does not provide for another reshaping of the blocks. However, in the next phase that will begin in two years, the Ministry will revise the outlines of some of the total 20 regions planned for concessions for which no interest has been expressed. The experts emphasize the weight that the Greek state attributes to the evaluation rate of the action plan proposed by the interested investors (it will be 40% against 60% for the financial parameters).
The evaluation will take into account not only the investments but also their documentation, and the investor will be required to submit as a guarantee the corresponding amount that will be gradually repaid, depending on the proven activity performed, in order to avoid the phenomena observed in the concessions in 1996. It is expected that the concessions will be announced in September and the submission of tenders will take place in March 2015.
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