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ExxonMobil-Total-ELPE sign agreement for energy exploitation off Crete

A joint venture of Exxon Mobil, Total and the Hellenic Petroleum signed an agreement with Greece to proceed with energy exploratory drilling and hydrocarbon exploitation in the sea area West and South-West of the island of Crete in the south Aegean Sea.

The contracts grant the joint venture the right to explore and exploit hydrocarbons.

These two sea areas are 20,058.4 sq. km. West and 19,868.37 sq. km. South-West of Crete. They were proclaimed as plots for hydrocarbon exploitation in 2017, following the interest shown by the companies themselves.

The joint venture consists at 40% of US ExxonMobil, another 40% of French Total and 20% of the Greek Hellenic Petroleum ELPE, owned at 45.5% by Latsis Group and at 35.5% by the Greek state. The state has transferred its shares it to the Public Privatization Fund HRADF.

The contracts were signed by representatives of the three companies as well as the Minister of Environment and Energy, Giorgos Stathakis and the Chairman and CEO of the Hellenic Hydrocarbon Management Company (GEDE) Yiannis Basias.

The research period lasts 8 years in three stages of twice 3 and 2 years,  with the possibility of extension. During that period seismic and geochemical surveys and a drilling depth of 4,000 meters (including depth of water) are mandatory.

At the level of environmental compliance, among others, an Environmental Impact Assessment is planned at each stage, the creation of a distinct Environmental Unit operating under the responsibility of companies for integrated care, prevention, mitigation and response to the environmental impact of each area.

Regarding the economic benefits for Greece, the Greek State will receive in each area:

  •  During the investigation phase: 1,500,000 euros with the signing of the contract, areas compensations of approximately 2,500,000 euros.
  •  During the exploitation phase: rent of € 200 per sq. km. of the region per year, plus additional amounts depending on production, measured in barrels of oil equivalent (production bonus).

Speaking at the signing ceremony, Prime Minister Alexis Tsipras said “today is a historic day because Greece is making a big and decisive step to capitalize on its energy wealth.”

He also stressed that “today, Greece is not only a country that is a critical energy hub in the Eastern Mediterranean and the Balkans but is also starting to implement a plan that ultimately aims to turn it into an energy-producing country. This is the culmination of many years of efforts and planning.”

He added that “just four years ago the country was on the brink of bankruptcy and now it is a self-sufficient country.”

“The investment signed today for the exploration and exploitation of potential hydrocarbon deposits is a vote of confidence in the potential of Greece and the Greek economy,” the prime minister said. He pointed out that the great interest today has to do with the geopolitical significance of the contract being signed, which he described as “a nationally important investment that begins a great cycle for hydrocarbon exploration and extraction.”

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