Steady progress is being made towards hydrocarbon extraction in two potential gas fields south and southwest of Crete, with the company carrying out the exploration, ExxonMobil, reported to be ready to proceed to the next stage of test drilling once government approval has been received.

According to a report on Capital.gr quoted in Haniotika Nea, the American company are highly optimistic following the processing of seismological data from the areas of the concession and have identified specific areas for test drilling, while the official results will be presented to the Greek government in the next month or so. The deposits could match those found over the past decade in Egypt’s Zor field, which is thought to have a similar geological structure to the area of exploration off Crete. This opinion is supported by another article in Haniotika Nea by Emeritus Professor at the Technical University of Crete Antonis Foskolos and Distinguished Fellow of the International Water Association Andreas N. Angelakis, who estimate the deposits of natural gas at 11.89 trillion cubic metres.

The search for a partner
One problem which the enterprise will have to face is the creation of a port infrastructure to support the drilling – something which Souda would not be able to cope with at present, and which will be required before the operation can get an environmental permit. Test drilling will be expensive since the target areas are at depths of 2,000 to 3,000 metres, with market sources estimating the cost at between €100 and €150 million. According to Capital.gr the financial risk is such that ExxonMobil may have to go into partnership with another US oil giant such as Chevron.

The possible benefits
In their article in Haniotika Nea, Mr Foskolos and Mr Angelakis estimate that on the basis of the Maniatis law 4001/2011, which laid down the principles governing the electricity and natural gas markets, the returns to the Greek State over the next 100 years could amount to $965 billion, with $241 billion potentially going to the Region of Crete. However, it has to be said that these figures are highly speculative at a time when test drillings have yet be carried out.

Reactions of environmentalists
Even when government permission for the test drilling is granted, it is unlikely that it will proceed unhindered. Legal obstacles raised by environmental groups delayed the start of seismic testing by three years, and there is no reason to suppose that they will not also try to obstruct the start of drilling. Indeed, No Oil Crete, the Cretan Initiative against Hydrocarbon Extraction, this week reacted to the news with the statement that “We will not permit Crete to become the latest victim of black development to save the oil industry which has ruined the planet.”

Mera25’s Giannis Varoufakis, quoted in Haniotika Nea on 24th February, takes issue with the whole concept of hydrocarbon extraction, which he describes as “a fairytale with a bad dragon”. The prospect of great national wealth which is regularly dangled in front of unsuspecting citizens is a myth, he says. The only people likely to benefit from hydrocarbon extraction are the “domestic and foreign oligarchs”, and the proposed operation off Crete is fraught with danger because of the depths involved. Any accident would have devastating environmental effects. Taking a swipe at the “gaudy estimates of professors who work for the multinationals such as Mr Foskolos”, he says Mera25 believes that “Crete and the Greek people have nothing to gain from the extraction operations. On the contrary they risk a major catastrophe for the natural environment and for the economic life of the area.”

Former Rector of the Technical University of Crete, Giannis Filis, who writes a regular column on environmental issues for the Haniotika Nea, reacted to the news by recalling the various climate-related disasters which have befallen the country in the past year and suggesting that the consequences of climate change might well outweigh any benefit to be gained from hydrocarbon extraction. Commenting on the reports that the country could benefit to the tune of a trillion dollars, he says: “It is interesting that these estimates talk about a 100-year time span, even though Greece has agreed to achieve carbon neutrality by the year 2050. When we are unable to make predictions on economic and social issues even for the next month, one wonders how anyone can predict financial benefits over the span of a century.”

Optimism from the deputy Energy minister
There seems little likelihood that these negative messages will be heeded by the government. The Prime Minister Kyriakos Mitsotakis has more than once referred to the need for natural gas as a transition fuel in achieving the Green Economy. The origin of the report on Capital.gr was a meeting between the deputy minister for Environment and Energy Alexandra Sdoukou and ExxonMobil at the Egypt Energy Show, EGYPES, held in Cairo from 18th to 21st February. At the meeting the company confirmed its intention to proceed with the next step of exploration in Crete, which is to carry out test drillings, and in a post on Linked-In Ms Sdoukou said: “A meeting with ExxonMobil’s VP Global Extraction, John Ardill and team, joined by HEREMA’s Aristofanis (Aris) Stefatos. ExxonMobil’s confidence in Greece’s natural gas potential is a great cause for optimism for all of us.”.

In one of the sessions at EGYPES at which she was a speaker, Ms Sdoukou expanded on the government’s views:
“Although the goals we have set for the energy transition are ambitious and we want to achieve them as soon as possible, the fact is that we cannot move faster than technological progress permits. By extension, Greece recognises the role of natural gas as a transitional fuel and aims to become a hub both for green electricity and for natural gas. In any case, especially after the trauma of the energy crisis, the role of natural gas as a bridging fuel should not be underrated.”

The deputy minister said that the EU had underestimated the role of natural gas and ended up suffering the consequences after the Russian invasion of Ukraine. “We need a balanced approach which will maximise both future and present energy resources. Our probable role as a natural gas producer is of decisive importance if we are to put an end to dependence on imports and the increased cost they entail,” she said.

The next steps
The next step will be the official notification of the Greek government and HEREMA (Hellenic Hydrocarbons and Energy Resources Management Company) of the results of the seismic explorations carried out south and south-west of Crete. This is expected to happen within the month of March and, assuming that ExxonMobil applies to carry out test drilling, it will be up to the government to give the green light to the process.

According to HEREMA, the test drilling phase will last 2 years, following which it will take 2 to 3 years to set up production before any income accrues to the Greek State.
(Haniotika Nea, Capital.gr, Energypress.gr)