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Greece speeds up gas exploration to help reduce Russia reliance

greek pm mitsotakis visits hellenic hydrocarbon resources management in athens
Prime Minister Kyriakos Mitsotakis

Greece will speed up gas exploration as it looks to cut its reliance on Russian energy, aiming at its first test drilling in more than two decades by the end of 2023, the prime minister said on Tuesday.

Russia’s invasion of Ukraine and fears over gas supply in Europe have exacerbated a jump in prices, forcing the European Union to seek ways to reduce its use of Russian gas by two-thirds this year and completely phase it out by 2027.

Greece, which covers about 40% of its annual energy needs with Russian gas, and views gas as a transition fuel as it ramps up renewables, has produced small quantities of oil in the past and has attempted to explore its hydrocarbon potential.

But low crude prices in previous years, a shift to green energy, and a lack of political will have stalled its exploration plans.

Prime Minister Kyriakos Mitsotakis said the country aspires to become a gas producer and a hub for the storage and transfer of gas to the rest of Europe.

“Accelerating the exploitation of the country’s national energy resources will allow us, if we are lucky and we have exploitable natural gas fields, to boost our energy independence, our energy security,” Mitsotakis said.

This shift in Greece’s strategy will not undermine its plan to boost green energy and cut carbon emissions by 55% by 2030 in line with EU’s climate change targets, he added during a meeting with the country’s hydrocarbons commission and energy industry executives.

“It is simply an alternative path towards the same target,” he said, adding that early indications of potential gas reserves made the government optimistic. Greece aims to have a clear idea of its gas reserves potential by the end of 2023.

Energean ENOG.L, the sole oil producer in Greece so far, will carry out a test drilling at an onshore block in the west of the country, the first such drilling in the country in 22 years, its chief executive Mathios Rigas said.

Greece wants to conclude a first round of seismic surveys to identify any gas fields it could tap in one onshore and five offshore areas in western Greece and off the island of Crete by March 2023, according to a presentation by its hydrocarbons commission.

Hellenic Petroleum HEPr.AT owns exploration licences for five of the six prospective blocks, including for two blocks west and southwest of Crete jointly with TotalEnergies TTEF.PA and Exxon Mobil XOM.N.

The government will notify Energean and other energy companies that hold exploration licences in those areas of its intention to speed up relevant procedures, the energy minister said during the same meeting.

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