Greece’s parliament gave the go-ahead on Wednesday for companies including France’s Total and Italy’s Edison to explore for oil and gas in the west of the country.
Licenses for four blocks - one offshore and three on land - were awarded in 2016 but had to be ratified by parliament for exploration work to begin.Encouraged by recent large gas finds in the eastern Mediterranean, Greece is eager to attract investment in its energy sector as it tries to emerge from years of economic crisis. Western Greece is an underexplored area and very little data exists on its hydrocarbon potential.
A Total-led consortium with Edison and Greece’s biggest oil refiner Hellenic Petroleum was awarded Block 2 in the Ionian Sea; Hellenic Petroleum was also awarded the Arta-Preveza and northwestern Peloponnese onshore blocks and Energean, Greece’s only oil producer, the Aitoloakarnania onshore block.Hellenic Petroleum holds an exploration license in the Patraikos Gulf off the Peloponnese peninsula and plans the first test drilling there in 2019. Energean also plans to start drilling in another field off the peninsula in 2019.
“We are turning a new page in the chapter of tapping into hydrocarbons,” Energy Minister George Stathakis told parliament before the vote.He said the country was slowly catching up with Cyprus, Israel and Egypt.
Total has shown interest in the eastern Mediterranean following major gas discoveries off Israel and Egypt. It is currently drilling for oil off Cyprus.Together with Hellenic Petroleum and U.S. oil major Exxon Mobil, it has also expressed interest in exploration at two sites off Crete, prompting Greece to launch a tender.
The Greek branches of Greenpeace and the World Wildlife Fund (WWF) had called on lawmakers to reject the bills ratifying the contracts, saying iconic and ecologically sensitive marine and coastal areas were at great risk.The bills“trapped the country in a growth model that is extremely polluting and dangerous to humans and the environment,” they said in a statement.Stathakis said Greece will make sure that strict environmental rules will be applied.
State-owned gas company, Naftogaz, was awarded $2.5 billion in a lengthy, ugly legal battle with Russian gas behemoth Gazprom. The Stockholm Arbitral Tribunal ruled Wednesday on a years old dispute regarding natural gas transit fees in favor of the Ukrainians. Gazprom said they will appeal the ruling.
Russia's revenge began immediately on Thursday when Naftogaz learned of Gazprom's decision not to supply gas to Ukraine this month. Naftogaz said it had already paid for deliveries and would turn to Poland for emergency supplies.
Russia and Ukraine's bitter divorce has Gazprom at the heart of the fighting. When former Ukrainian president Viktor Yanukovych rejected a European trade deal in favor of cheaper Gazprom gas, Kiev erupted in protest. Many Ukrainians felt that Yanukovych was choosing Russian interests over sovereign, economic interests. Yanukovych was kicked out of power in 2014, setting off a firestorm of reactions by the Russians that ultimately led to the annexation of Crimea, a southeastern peninsula in the Black Sea and home to Russia's only warm water Naval port; and a separatist war pitting ethnic Russians and pro-Kremlin militants against the Ukrainian government in the Donbass region along the Russian border.
The move led to sectoral sanctions on Russian energy and finance and has ostracized Russia from the West. As the story goes, the Russians are the Cold War bad guys once again. It all started in Ukraine with these two energy companies going at each other's throats. The Russians seemed to always have the upper hand.Gazprom is one of the world's leading natural gas producers. It has a market cap of roughly $58 billion.
For the Euromaidan movement activist of Ukraine, a Naftogaz legal victory would normally be boring news. But today it is more like the nuggets flowing out of the Robert Mueller Russia investigation: if it makes their enemy look bad, it's a score.There are many scores to settle still. Gazprom has the muscle to pressure Naftogaz by any means necessary, insiders said.
Yesterday's tribunal in Stockholm found that Gazprom defaulted on its shipment obligations and awarded damages of $4.63 billion. The award means Gazprom has to make payments to Naftogaz in the order of $2.56 billion after residual payments for gas delivered in 2014 and 2015 have been settled.
Total SA isn’t averse to adding political risk to its portfolio.
The French company just acquired Marathon Oil Corp.’s Libyan assets for $450 million in a move that will more than double its production in the North African nation where output is frequently disrupted by a civil war. Chief Executive Officer Patrick Pouyanne is betting the low-cost fields will increase production by more than a third by the end of the decade.
“Total has a long history of operating in Libya, and is obviously comfortable with the risk-reward balance,” said Luke Parker, an analyst at consultant Wood Mackenzie Ltd. Libya’s “stability has improved, but the lack of a central government means the risks of tribal disputes and labor strikes blockading critical infrastructure remain acute.”
Pouyanne’s no stranger to bold moves. Last July, Total was the first Western major to sign a contract with Iran since U.S. and international sanctions were eased in January 2016. Yet, Total’s boss is waiting to see what the U.S. will decide regarding Tehran before making his final decision to develop the giant South Pars 11 gas field in the Persian Gulf, which would require the company to invest about $1 billion.
To be sure, the CEO has recently rebalanced the group’s exposure toward resources in the North Sea, the Gulf of Mexico and Brazil’s deep offshore, with the $7.45 billion acquisition of A.P. Moller-Maersk A/S’s oil unit and a $1.95 billion deal with Petroleo Brasileiro SA. That’s in addition to the $1.5 billion purchase of Engie SA’s upstream LNG business, and expansions in petrochemicals projects from South Korea to Texas.Those acquisitions will modify Total’s geographic exposure, although recent project startups in West Africa and at Russia’s Yamal gas project will also have an impact.
U.S. and European sanctions on Russia meant Exxon Mobil had to leave a joint venture with Russian oil company Rosneft, the U.S. supermajor said in a filing.Exxon said in an update to its 10-k filing to the Securities and Exchange Commission that it was complying with U.S. and European Union sanctions imposed in 2014 and expanded ones from the U.S. government last year.
"With respect to the foregoing, the corporation and its affiliates continue to comply with all applicable laws, rules and regulations," the filing read. "In late 2017, the corporation decided to withdraw from these joint ventures."
Exxon and Rosneft formed partnerships in 2013 and 2014 to work offshore in the Russian Arctic and in the Black Sea. The U.S. company also holds acreage on Sakhalin Island. As of year-end, Exxon's net acreage through the Russian joint venture in the Black, Chukchi, Kara and Laptev Seas was 63.6 million acres.
Exxon was fined $2 million in July for violating U.S. sanctions against Russia when U.S. Secretary of State Rex Tillerson was still the company's chief executive. The U.S. Treasury Department said Exxon engaged in a deal with Rosneft President Igor Sechin, one of the oligarchs who faced personal and business sanctions stemming from the Russian annexation of Crimea from Ukraine in 2014.
Exxon said the sanctions against Sechin left room for "personal" business deals and only applied to "professional" conduct. Treasury officials said the executive orders made no such distinction.
Samual Lussac, a senior Russian research manager at consultant group Wood Mackenzie, said Exxon's departure puts a long-term strategy to explore the Russian Arctic, as well as Far East liquefied natural gas projects, at risk."Rosneft loses a partner of choice, which could have brought financing and expertise for the development of the next wave of Russian oil supply," he told UPI.
When sanctions were imposed in 2014, a spokesman for Exxon said the company can operate freely with Russian energy company Rosneft at a Far East energy project without fear from sanctions.
The Sakhalin-1 project envisions the development of three oil and natural gas fields located in extreme sub-Arctic conditions off the coast of Sakhalin in Russia's Far East.Lussac said Exxon keeps its 30 percent share in Sakhalin-1. Rosneft has yet to issue a statement on Exxon's decision."The corporation expects it will formally initiate the withdrawal in 2018," the 10-k filing read. "The decision to withdraw resulted in an after-tax loss of [$200 million]."
Aker Solutions has been chosen to deliver the subsea production system while Subsea 7 will take care of the pipelines required for the Nova field, formerly named Skarfjell.Wintershall expects to submit the development plan for the field in the first half of 2018.
The plan involves tying the Nova well back to the Gjoa platform.Wintershall holds the operatorship and a 35% stake in the licence.Project partners include Capricorn (20%), Spirit Energy (20%), Edison (15%) and DEA (10%).
Egypt will launch an oil exploration and production (E&P) tender and contract new firms during the second half of 2018, Egypt’s Minster of Petroleum and Mineral Resources, Tarek El Molla, announced, according to Al Ahram Newspaper.
“Petroleum E&P is based on scientific studies,” El-Molla affirmed, noting that “there are many international companies that have advanced to research and explore in new areas after the discovery of Zohr field.”One of the important results of the borders’ demarcation in the Red Sea is that “Egypt successfully contracted with international oil companies for E&P in new areas,” El Molla further stated.
The Egyptian Natural Gas Holding Company (EGAS) plans to issue an international outbidding to explore for crude oil and natural gas in 11 concession areas before June 2018, an official at EGAS previously said, Amwal Al Ghad reported.
The bids’ concessions would include eight offshore areas and three onshore concessions. EGAS obtained all required security approvals in order to issue the outbidding, the official noted.