Onshore “oil seeps” in Greece and Albania

Energean new exploration areas in the west of Greece, by the Adriatic Sea, hold the most potential to transform the company from a minor oil and gas company into a fairly significant player. An arc extending north from southwestern Greece, through Albania, Montenegro and Croatia, is emerging as the Mediterranean’s new oil frontier and attracting some big industry names, including Chevron and Shell.

Albania, home of Europe’s biggest onshore oil field, is already on its way to becoming a big oil and gas producer. There, Toronto-listed Bankers Petroleum is at the development forefront with its heavy oil properties. At last count, the company’s proven and probable reserves were 232-million barrels and production was 19,300 barrels a day.In Western Greece, Energean recently won the right to explore the largely onshore Ioannina block and, farther south, the largely offshore Katakolon block. Energean’s partner in Ioannina is little, Venture exchange-listed Petra Petroleum, with a 20-per-cent stake. Energean is happy to have Petra as part of its team because Petra’s vice-president of operations, Christopher Brown, knows the eastern Adriatic area well. When he worked for Enterprise Oil (now part of Shell), he was responsible for the Ioannina block.

Energean plans to spend more than $60-million exploring the two blocks. While Mr. Rigas admits that no one has a clue how much oil the areas potentially contain, he is optimistic, noting the onshore “oil seeps” in western Greece and in Albania.

“This is a potentially big area opening up and we are well positioned to exploit it, “ he says, to the point the company is considering the purchase of small energy companies that are active in the area.

A lot could still go wrong. Western Greece could prove to be an oil and gas dud, though the significant oil resources in neighbouring Albania and across the Adriatic in Italy suggest the region has at least some potential for discoveries.

Politics may play a bigger risk. Greece’s far left Syriza party placed first in Greece in the May European parliamentary elections. It has talked about nationalizing Greece’s national resources industry, though nationalization is not official party policy. If the energy industry were to come under state control, goodbye foreign investors.

But given the dire shape of the Greek economy, and its horrendous fuel bill – the country imports 99.5 per cent of its oil and gas needs – outright nationalization of the oil and gas projects seems unlikely and Energean doesn’t count it as a risk. “We have a huge energy deficit that needs filling,” Mr. Rigas says reports the Globe and Mail.

Balkans.com 18.08.2014