(Reuters) -
Offshore natural gas could dramatically change Greece's fortunes, should
early estimates of $600 billion worth of reserves be confirmed,
according to a study presented to Prime Minister Antonis Samaras in June
and seen by Reuters.
The study, collating existing
scientific data, says that geological similarities indicate that
reserves offshore Crete may match the prolific Levantine Basin where
recent Israeli and Cypriot discoveries are clustered.
It
points to strategically significant reserves in Greek waters south of
Crete in the range of 3.5 trillion cubic meters (Tcm), enough to cover
over six years of EU gas demand, and the equivalent of about 1.5 billion
barrels of oil.
While it will take years to explore and develop any offshore gas sector, Greece
has launched a licensing round and has commissioned a seismic survey
company to pin down the extent of hydrocarbon deposits. The results are
expected in mid-2013.
Presenting
their findings, study authors Antonis Foscolos, Elias Konofagos and
Nikos Lygeros said they expected the reserves to generate $599 billion
in state earnings over 25 years.
"We
feel this is a very conservative figure," Konofagos, whose Athens-based
company Flow Energy informally advises the government on energy
strategy, told Reuters.
Foscolos,
professor emeritus at the Technical University of Crete and the Canadian
Geological Survey, said that subsea methane emissions and the presence
of gas hydrate mounds on the seabed indicate the presence of large
reservoirs.
Another study published
in the Journal of Environmental Science and Engineering in June
estimated that Greece had 4 Tcm of gas and a further 3 billion barrels
of crude oil.
Taking into account
savings from fuel imports - Greece spends five percent of GDP on energy
imports - discoveries on the scale envisaged could clear the country's
debt and bring billions in annual cost savings.
Geologists
say that the little-explored region, riven by converging tectonic
plates that form folds or petroleum traps, displays promising geology
that now requires surveying to confirm any actual deposits.
One
of the world's biggest seismic surveyors, Petroleum Geo-Physical (PGS),
which recently won a tender to scan Greek waters, told the country's
Department of Energy and Climate Change during a sales pitch in July
2011 that waters south of Crete had significant hydrocarbon potential.
"Hydrocarbon
analyses of mud from ODP (Ocean Drilling Program) cores suggests the
presence of an active hydrocarbon system at depth," according to a
presentation seen by Reuters.
PGS
goes on to say that there are also potential analogues to proven
hydrocarbon provinces in the Mediterranean, including Libya.
"Hydrocarbon
systems don't recognize international boundaries, proven extensions of
the Greek hydrocarbon systems exist in Albania, Turkey and Libya," it said.
PGS suggests that the Mediterranean Ridge near to Crete is a productive accretionary prism.
"So
a good hydrocarbon kitchen, the proof of which is that some of the many
mud volcanoes along it are emitting gas of thermogenic (deep, cooked)
origin," geologist Daniel Praeg from Italy's Institute of Oceanography
and Experimental Geophysics said in an email.
Exploration
successes in Albania could also be replicated in waters to the west of
Greece, PGS adds, a licensing area that was recently opened to bidding
by the government.
With its
potential wealth, Greece could also become a transit hub for gas to
Europe if it establishes an exclusive economic zone allowing it to
legally extract hydrocarbons, which it currently lacks south of Crete
and in other areas.
Finds off
Israel, Cyprus and Lebanon have spurred a broader prospecting frenzy
across the region, and there are now plans to combine exports via a
pipeline to Europe.
The head of the
ITGI pipeline, which lost out in the race to carry Caspian supplies to
Europe, hopes to convert his project into a conduit linking East
Mediterranean discoveries with the gas-thirsty continent.
Despite high hopes, geologists caution that estimates alone mean nothing, and that only drilling can determine the facts.
Poland,
which slashed its wildly optimistic estimates of shale gas reserves
this summer, saw its hopes of achieving energy self-sufficiency in
tatters.
Comparisons between the
East Mediterranean and the North Sea may be vindicated if reserve
estimates turn out to be accurate, petroleum geologist David Peace said.
Total
gas volumes in the East Mediterranean Sea are estimated at over 10
trillion cubic meters, according to U.S. Geological Survey estimates but
excluding south of Crete, enough to meet Europe's gas demand for more
than 15 years.
That could breathe
new life into Mediterranean Europe's flagging, mostly onshore, oil and
gas industries as harsh economic realities rekindle interest in domestic
exploration long neglected by policymakers.
Prospects in the West Mediterranean Sea, which the U.S. Geological Survey says holds 1.4 Tcm of gas, also look brighter after Italy relaxed a two-year drilling ban and promised to reduce red-tape.
"If
you look at the offshore license map of Italy, about two-thirds of it
is open...Italy is one area that has been overlooked, especially the
south," Peace said.
Spanish
policymakers, desperate to plug an energy sector deficit of $31 billion,
are repositioning towards developing their natural resources sectors
with a view to offshore exploration.
As well as bolstering local economies, the burgeoning gas province gives Europe ammunition against Russian gas giant Gazprom (GAZP.MM), now the subject of an EU antitrust case, with an opportunity to diversify supplies.
Reuters, 3/10/2012
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