Hydrocarbons: Second thoughts from the US on the Mylopotamos gas fields.

New York September 2022

By our partner Mathaios  Stravokouioukis.

The negative environment that has been created around oil and gas extraction seems to completely change the scene around the ongoing hydrocarbon explorations even for the “hot” area of high geo-strategic interest in the area of Mylopotamos, Crete. This, at least, appears on the occasion of an interview granted by the American ambassador, George Tsounis, published in the Greece Investor Guide, which leaves open all possibilities regarding the future of the American presence in the disputed plots. Mr. Tsounis emphasizes that the future of hydrocarbon exploration in the Mylopotamos region will be determined by the market itself, noting of course that companies even in Greece are looking for ways to make their portfolio greener. The American ambassador mentions that natural gas is a fuel that will play a major role in the energy transition.

Seismic surveys

These statements come at a time when the consortium consisting of Total, ExxonMobil and ELPE, is called upon to decide whether to proceed with the seismic surveys required in accordance with the procedure provided for in the tender of the concession contract. Specifically, the time window in which these investigations are scheduled to be carried out closes this winter (end of 2022 – beginning of 2023). Otherwise, in a different case, the members of the consortium should address the competent Greek Administrative Authority and representatives of the Mylopotamos requesting a time extension. It is recalled that the consortium had the opportunity to carry out the seismic surveys during last winter, which it did not take advantage of due to the pandemic crisis and the general negative conditions in the hydrocarbon market.

The interview

In any case, the statements of the American ambassador, who specifically referred to the case of investigations in Mylopotamos in the context of an interview he gave to Greece Investor Guide, are indicative of the climate. Specifically, when asked if Greece’s energy transition is affecting hydrocarbon exploration efforts in Crete, Mr. Tsounis emphasized that the energy transition is real and ongoing. He estimates that natural gas will play an important role in the alignitization process and underlines that the big question is where this gas will come from. In fact, he makes special mention of the changes noted in the energy map of the region and which are due to the political decisions of Greece, including the natural gas infrastructures, such as the TAP pipeline, the extension of the Revythoussa station, the FSRU of Alexandroupoli, which will differentiate the gas supply with non-Russian imports supported by the United States. He adds that the possibility of financing the large hydrocarbon research projects in Mylopotamos will depend on the decisions taken by the holder of the exploitation license. But I think that for the US the priority remains that Greece will continue to play a role as a guarantor of European energy security, and at the same time to do everything we can to support the bold plan of the energy transition and completion of research in Pleuriana, for which Prime Minister Kyriakos   Mitsotakis has committed,” Mr. Tsounis concludes.

Interesting area

Regardless of the negative climate that prevails in the international market and has led to the suspension of many investment projects, especially for areas that are considered unexplored (frontier), for the region of Mylopotamos   Crete there are specific data, which suggest that there are serious possibilities for a large natural gas deposit . The data had initially come into the possession of Hellenic Petroleum since 2003, while they were recently confirmed by the first seismic recordings carried out by the Norwegian company PGS in the wider area. Based on preliminary estimates, an analogous geological section has been identified based on the model used to locate the offshore Zor gas field in Egypt. It is noted that the specific section in Mylopotamos was named “Talos” while the findings from the PGS seismic recordings were used to attract foreign investors, with Total and Exxon Mobil being the first.

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