Greece prepares to finally exploit energy resources in its waters

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The Greek government tabled contracts for hydrocarbon exploration in four areas off Crete and Ionian islands in Greek parliament on Wednesday evening for ratification, as Greece prepares to exploit in natural energy resources.

The contracts tabled to parliament include the sea area designated 'Ionio' (Spain-based consortium Repsol Exploracion/Hellenic Petroleum or HELPE); 'Block 10 Ionian Sea' in the Gulf of Kyparissia, SW Peloponnese (HELPE); and the maritime areas west and southwest of Crete (consortium of Total, ExxonMobil and HELPE).

According to an introductory report, the initiative will be a significant boost for the Greece economy as the contracts will provide valuable offsets to local communities and revenues to the state budget.

The drilling "essentially concerns the exercise of national sovereignty and national sovereign rights by the Greek state on hydrocarbon resources," the report said.

Additionally, ratification of the contracts will further establish Greece's role as an energy hub, following up on the TAP natural gas pipeline and other concessions. The latter include the areas designated as 'Katakolo', 'Ioannina', 'Patras Gulf (West)', all signed in 2014; and 'Etoloakarnania', 'Northwest Peloponnese', 'Arta/Preveza' and Maritime Area 2 in the Ionian Sea, all signed in 2018.

Provisions of the contracts for the Cretan and Ionian beds include an 8-year limit on exploration, and a 25-year limit on exploitation. If hydrocarbons are found, the state stands to gain 40% of the total investment revenues, broken down as follows: 20% as income tax plus 5%as regional tax, with the rest being income on royalties based on a rising scale linked to hydrocarbon volume.

In addition, the contracts include strict regulations on environmental protection and reduction of environmental threats at both exploration and exploitation stages.