Discoveries of Fossil Fuels in the East Mediterranean Region: How Greece Could Enhance Its Position in Energy World
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Discoveries of Fossil Fuels in the East Mediterranean Region: how Greece could enhance its position in energy world Maria Koutsounida SCHOOL OF ECONOMICS, BUSINESS ADMINISTRATION & LEGAL STUDIES A thesis submitted for the degree of Master of Science (MSc) in Energy Law, Business, Regulation and Policy February 2018 Thessaloniki – Greece i Student Name: Maria Koutsounida SID: 1108160006 Supervisor: Prof. Sandro Furlan I hereby declare that the work submitted is mine and that where I have made use of another’s work, I have attributed the source(s) according to the Regulations set in the Student’s Handbook. February 2018 Thessaloniki - Greece ii Abstract This dissertation was written as part of the MSc in Energy Law, Business, Regulation and Policy at the International Hellenic University. Greece is the country which constitutes a main pillar, the last north border of Europe adjoined with the East. It belongs in the region of Mediterranean Sea which is of great geopolitical importance. The latest years Greece is trying to get involved directly and powerfully in the global energy world through delivering energy and producing by exploited its deposits of oil and gas. Owing to the geographic position, it is a key “player” as a transit country based on the pipeline projects, as TAP and others. Additionally, there are plenty discussions about the fossil fuels existing in the underground and the efforts to reach an agreement for the exploitation of these. After long-term researches and explorations, we are nowadays in the nodal point of the fulfillment the prerequisites and continue after the competitions and the interest that giant companies expressed. This thesis is interested to analyze in dept the key factors that could affect a country to exploit its reserves, enhancing the energy security and ensuring better conditions for its future dealing with the economic crisis. Moreover, this dissertation makes an effort to handle the possible consequences of such an exploitation in relation with the global supply and demand, the prices of fossil fuels as well. Concluding, it focuses on the significance for the economy and the position of the country in the global energy market, baring in mind the energy glut. Keywords: exploitation, fossil fuels, Greece, East Mediterranean, geopolitics Maria Koutsounida 15.02.2018 iii Preface This dissertation is original, unpublished, independent work by the author, Maria Koutsounida. At this point, I would like to thank my dissertation advisor Professor Dr. Sandro Furlan of the School of Economics, Business Administration & Legal Studies at International Hellenic University. He consistently allowed this paper to be my own work, while he guided me with his knowledge, valuable comments and advices wherever he thought I needed. Finally, I take the opportunity to express my gratitude to my family, my friends and classmates for their support. 4 Contents Abstract ............................................................................................................................... iii Preface ................................................................................................................................. 4 Introduction ......................................................................................................................... 6 1. Production and transportation of energy, the role of Greece ........................................... 7 1.1. The significance of the geographic position of Greece ................................................. 7 1.2. What is energy and how it can be delivered ................................................................ 8 1.3. Efforts from Greece to transit and become more powerful in the energy world map 11 1.4. What happened next ................................................................................................ 14 1.5. The paths of evolution through the Greek energy system ......................................... 16 2.The history of discoveries in Greece ................................................................................ 17 2.1. The first steps and what is followed .......................................................................... 17 2.1.1. Hydrocarbon Discovery ...................................................................................... 18 2.1.2. The changes in the hydrocarbon sector (Law 4001/2011)................................... 19 2.1.3. New hydrocarbon reserves ................................................................................ 21 2.1.4. Areas of seismic of non-exclusive use ................................................................. 21 2.1.5. “Open Door” Areas ............................................................................................ 23 2.1.6. Business environment ........................................................................................ 25 2.1.7. Huge hydrocarbon deposits in the south of Crete .............................................. 26 3. Greece, Finance and Fossil Fuels ..................................................................................... 29 3.1. Relation between reserves and financial crisis in Greece........................................... 29 3.1.1. Europe is not taken under consideration; the game of sovereignty is played elsewhere .................................................................................................................... 29 3.1.2. Greece has oil, natural gas and fossil fuels ......................................................... 30 3.2. An adverse opinion, against the exploitation of fossil fuel in Greece ......................... 31 4. The reality nowadays and the energy glut ...................................................................... 34 4.1. Western Greece: The evidence about oil and gas in Patraikos Gulf and Ionian Sea .... 34 4.1.1. Drill in the Patraikos Gulf ................................................................................... 35 4.1.2. Soon the signatures for the gulf of Kyparissia ..................................................... 37 4.1.3. New optimistic elements from Western Greece ................................................. 38 4.2. A source of black gold(?): South Crete ...................................................................... 39 4.3. Consumption of Fossil Fuels in Greece, prices and global energy glut ........................ 40 Conclusion .......................................................................................................................... 43 BIBLIOGRAPHY ................................................................................................................... 47 5 Introduction This thesis focuses on the investigations of fossil fuels in the area of East Mediterranean Sea, how these could affect Greece and the impacts on the position of the country in the global energy market, the energy security and the financial crisis. According to the following analysis, someone could be able to understand in depth what happens in the Greek region in relation with the explorations taking place in the past and the existence of oil and gas in the territory, as well the ability of the state to play a significant role transferring energy to neighboring countries. Moreover, it becomes clear that the exploitation of this fossil wealth from the womb of the earth is a key factor for the active involvement of the country in the energy map, basically owing to its geopolitical position. Plenty useful documents, academic literature and global bibliography relative to the issue enhance the evidences of this thesis. Following the structure of the dissertation, Chapter 1 contains an analysis of the geopolitical position of Greece and its great importance, the connection with the other countries by pipelines projects and delivering energy boosting energy security and targeting to become a powerful transit country. Subsequently, Chapter 2 is referred to the history of discoveries of fossil fuels in Greek land in detailed from the beginning until 2014 and the reasons why some projects never continued that period. There is also reference to the innovative energy law 4001/2011. Afterwards, the 3rd Chapter presents two adverse opinions relative whether or not is beneficial for Greece to continue the agreements for the exploitation of oil and gas. Additionally, there is a link between this possible act and the economic crisis which afflict the nation from 2008. Last but not least, Chapter 4 is divided into two sections. At the beginning is made a connection between the past projects in areas that left unexploited facing a lot of obstacles with new researches and the discovery of big amounts of fossil fuels in there, the companies that have shown interest to invest and the optimistic scenario, to become Greece a new major player in the global energy puzzle. The second section presents the consumption of fossil fuels in Greece and how exploitation could be affected by the global energy glut. Finally, the thesis indicates a conclusion focusing on the ability of Greece to improve its position in the energy map, play a crucial role in the delivering of energy and why not production, always under specific 6 circumstances, baring in mind the prices, the demand and supply and the storing of reserves. 1. Production and transportation of energy, the role of Greece 1.1. The significance of the geographic position of Greece Greece is the country which constitutes a main pillar, the last north border of Europe adjoined with