Friday, September 14, 2012

A third gas corridor: Prospects for the East Med

Source: Pytheas Limited
Harris Samaras, Chairman & Group CEO of Pytheas, talks to Leigh Elston, Editor & Senior Reporter of Interfax, about the possibility, and importance, of the Eastern Mediterranean hydrocarbons to Europe and more (14 September 2012).

Extracts from the interview of Mr. Samaras with Interfax:

Dimitris Manolis, the Interconnector Turkey-Greece-Italy’s (ITGI’s) director of international activities, this week raised the possibility of bringing East Mediterranean gas to the European market via the ITGI pipeline as early as 2018. Harris Samaras, the chairman and group chief executive of Pytheas, an international investment banking organisation, spoke to Interfax about the benefits of, and technical and commercial challenges to, building ‘the East Med’ pipeline.

Interfax: Would a pipeline running from the East Mediterranean, as suggested by Dimitris Manolis, be feasible?

Harris Samaras: The construction of this ‘East Med Pipeline’, which would connect Israel, Cyprus and Greece to Italy and the rest of Europe, is feasible but it will be costly, and can only be justly assessed when further exploration is concluded and additional gas deposits are confirmed. If, however, the scientifically estimated deposits are proven to exist, it is undoubtedly the best long-term option and solution, not only for the countries involved, but for the EU as well. It is a solution which will liberate the EU from its energy dependence on volatile or [sometimes] ‘hostile’ countries – as both the source and the transportation means will be owned and controlled by EU-member countries alone. Needless to mention, it would strengthen Europe’s negotiating tools in the markets.

Interfax: What technical difficulties would the construction of the pipeline pose?

HS: The most challenging and costly part of such a project would be the construction of the pipeline between Cyprus and Crete (points B to C on the map, above), an approximate stretch of 675 km at depths of about 800-2,000 m. The 3,000 m depths could be avoided if the pipeline bypasses the Herodotus Abyssal Plain, which in certain places is about, or even exceeds, 3,000 m. The total distance, between A and G, and B and H, is about 1,880 km. Approximately 330 km of the pipeline lies within the exclusive economic zone of Cyprus, 1,250 km is within Greece’s (approximately 635 km of which is onshore), 80 km is within Italy’s and 220 km within Israel’s.

Interfax: How much is the project likely to cost?

HS: Roughly, the construction cost of a pair of 32 inch pipelines from Cyprus to Crete at depths of around 2,000 m is likely to be around $25 million per km and, to reach a 28 billion cubic metre per year capacity, the estimated capital cost for pipelines from Cyprus to Crete would be around $20 billion. This is a significant amount, but not prohibitive if the estimated deposits of more than 50 trillion cubic metres do exist.

Interfax: Is ITGI the best consortium to develop such a pipeline? Or should a new project consortium be put together to look into shipping East Med gas into Greece?

HS: It is highly unlikely that Cyprus will accept ITGI or any other consortium that includes Turkey when Turkey does not recognise Cyprus as a sovereign state.

Interfax: Is there enough gas to justify a pipeline to Europe, as well as an LNG export project, as favoured by the Leviathan consortium?

HS: A pipeline would be preferable to an LNG export plant; however, it is highly unlikely that further exploration, confirmation and exploitation procedures would be timely enough to meet the extremely ambitious 2018 or 2019 date. The challenges of engineering and construction, management and time related, economic, and geopolitical, are ample.

Right now there are not enough proven reserves to justify both projects or even to justify the construction of a pipeline.

The optimum scenario is that, until more hydrocarbons are confirmed in Cyprus and Greece, Cyprus will have to move swiftly with the construction and commissioning of the LNG onshore facilities, i.e., terminal, storage and liquefaction plant. Also, pipelines connecting the Aphrodite gas field and Israeli fields with the terminal have to be designed and laid.

Up until the liquefaction plant is constructed, the export of the Eastern Mediterranean gas surplus can by facilitated via CNG loading directly from the offshore field floating production systems to EU ports. Costs of shipping, including capital costs, would be roughtly $3 per million Btu (MMBtu) when average current market prices to European end users are $9/MMBtu.

In the short-to-medium, term and after the liquefaction plant is operational, gas can be transported to the EU via the more efficient LNG vessels (CNG’s volumetric energy density is estimated to be 42% of LNG’s).

In the long term, following further offshore discoveries in the region, the building of a pipeline system to transport gas from Israel and Cyprus to the island of Crete and then to mainland Greece and Italy into the European gas network makes absolute sense.

Although LNG may not be a perfect solution, it offers market flexibility and potential shipment to markets where prices are higher and it is considered a less risky method for monetising large amounts of gas. However, over and above the major upfront cost for the construction of a liquefaction plant, LNG costs significantly more than piped gas.

Furthermore, financiers of LNG investments may want to see a medium- to long-term commitment to buy if they are to break ground on a new project. And for any LNG plant to be truly profitable, it would need double the amount of gas known to exist in the Aphrodite gas field. Unless more gas is confirmed within the Cypriot EEZ or extra gas volumes from Israel are guaranteed, such a venture remains questionable.

Interfax: What role is East Mediterranean gas likely to play in Europe’s energy security?

HS: The significance of the southeastern Mediterranean hydrocarbons for the EU as a third corridor is beyond doubt. What is different about this particular corridor, over and above its estimated huge hydrocarbon deposits, is that Greece and Cyprus are EU member states and Israel an honest and trustworthy ally. For the first time ever in European energy history, the EU is guaranteed an uninterrupted supply of a traditional energy source of vast magnitude and potential.

Europe is confronted with a unique challenge and a remarkable opportunity and the need for EU action is stronger than ever.

Firstly, the EU should upgrade its role and involvement in the hydrocarbon efforts of Cyprus, Greece and Israel, to assist and ensure that an appropriate framework and solid plan are in place so that exploitation commences as quickly as possible.

Secondly, the EU should use its regional and global leverage to ensure that geopolitical challenges are resolved within international law and that the southeastern Mediterranean hydrocarbons become a tool for reconciliation and regional stability.

Finally, the southeastern Mediterranean corridor should be included in the EU’s energy policy and dealt with as such.

View the whole interview here and in .pdf here

Wednesday, September 12, 2012

East Mediterranean gas could be piped to Europe by 2018

Proposed East Mediterranean pipeline. (Pytheas Investor Service)
Proposed East Mediterranean Pipeline   (Source: Pytheas Limited)
Interfax (Natural Gas Daily) 12 September 2012 16:00 GMT
by Leigh Elston

The ITGI pipeline project, which in February was excluded from the bid to carry Azerbaijani gas into Europe, may instead tap into the East Mediterranean’s vast offshore gas reserves.

“By 2018-2019, gas from the East Mediterranean may find its way to Greece and through Greece to the rest of Europe, providing diversification and security of supply as well diversification of routes,” Dimitris Manolis, ITGI’s director of international activities, told Reuters on the sidelines of an energy conference in Vienna.

East Mediterranean gas explorers, led by Texas-based Noble Energy – the operator of the 480 billion cubic metre Leviathan gas field and 275 bcm Tamar gas field off the coast of Israel, as well as Block 12 offshore Cyprus – have so far favoured LNG export options over pipeline routes.
However, the huge gas potential of the Levant Basin – the US Geological Survey estimates 3.5 trillion cubic metres of recoverable gas lies off the coasts of Cyprus, Israel, Gaza, Lebanon and Syria – could support both an LNG export project and the ITGI pipeline link to Europe.

While a pipeline project is possible, it would be difficult to have a project operational within the next six years, according to Harris Samaras, chairman and chief executive of investment bank Pytheas. “It is highly unlikely that further exploration, confirmation and exploitation procedures would be timely enough to meet the extremely ambitious 2018 or 2019 date. The challenges are ample, engineering and construction related, management and time related, economic and geopolitical,” he told Interfax on Wednesday.

Alternative options

The ITGI project “remains open to export natural gas from Shah Deniz 2”, Manolis said, but only the Nabucco West pipeline and the Trans-Adriatic Pipeline made the shortlist drawn up in June (see Shah Deniz 2 decision looms for TAP and Nabucco West, 27 July 2012). Following this decision, “we are forced to consider, in parallel, alternative sources of gas”, Manolis said.

Italian utility Edison, one of the partners in the ITGI project, teamed up with Israel’s Delek Energy, Australia’s Woodside Petroleum and Italy’s Enel Trade to bid in Cyprus’ second offshore licensing round earlier in the year. Interfax reported in May that Delek’s decision to partner with Edison may signal intentions to use East Mediterranean gas as an alternative supply for ITGI (see Delek, Woodside and Edison team-up for Cypriot gas exploration, 14 May, 2012). Edison confirmed it was interested in gas exploration opportunities in Israel and Cyprus when contacted by Interfax on Wednesday, but declined to comment on potential infrastructure plans.

Commercially feasible?

Greece’s state-controlled DEPA, Noble Energy, Israel’s Delek Group and the Cypriot government are examining whether building a pipeline to bring Eastern Mediterranean gas to Europe is possible.
“At this point, it is premature to judge the feasibility and commerciality of a gas pipeline that would connect Israeli gas to Greece, via Cyprus. It’s long distance and over deep waters, and will be expensive to construct. It can only be justified if other factors fall into place – and one of the most important of those factors is finding other gas reserves,” Antony Livanios, chief executive of Energy Stream CMG, an international oil and gas advisory firm, told Interfax.

“Despite technical difficulties, the construction and operation of such a pipeline is doable,” Manolis told Reuters.
Yannis Maniatis, Greece’s former energy minister, is even more optimistic that the project will be commercial. “What is certain is that a pipeline from Cyprus or Israel is a bankable project, technically efficient and, of course, we in Greece fully support its construction and startup,” he told Interfax in May.

View the article at: http://interfaxenergy.com/natural-gas-news-analysis/middle-east/east-mediterranean-gas-could-be-piped-to-europe-by-2018/

Monday, August 27, 2012

Letter to the Greek island of Kastellorizo

Αγαπητό Καστελλόριζο,

Ονομάζομαι Χάρης Σαμάρας. Είμαι Έλλην Κύπριος.

Μια φορά και ένα καιρό η Κύπρος ήταν μία αδιαμφισβήτητη Ελληνική ακριτική γη όπως ενωρίτερα υπήρξαν πολλές άλλες… Για πολλούς αιώνες εχθροί την ζήλεψαν… Κανείς όμως δεν ήταν τόσο μεθοδικός και τόσο ανελέητος όσο οι σημερινοί γείτονες της, οι Τούρκοι… Σημειώστε, όσο περίεργο  και αν σας φανεί, δεν μισώ τους Τούρκους… «μισώ» όμως και απεχθάνομαι τον κάθε κατακτητή, βιαστή, βασανιστή και σφετεριστή της κληρονομιάς μου και του μέλλοντος των παιδιών μου…

Ο Ελληνισμός, ο μέγας αυτός πολιτισμός, (η ΙΔΕΑ), βιάστηκε και αυτός ανελέητα… πολλοί προσπάθησαν και προσπαθούν να τον σφετεριστούν… αν και φανερά, συστηματικά και με κάθε ευκαιρία τον βεβηλώνουν και μειώνουν… φόβο προκαλεί στους δυνατούς γιατί γνωρίζουν πολύ καλά ότι, η Ελληνική Σκέψη, η ΙΔΕΑ, δεν έχει σύνορα, πρωτεύουσα ή στρατό… γνωρίζουν πολύ καλά πως ο μοναδικός τρόπος να καταπολεμηθεί είναι η πόλωση και η διαστρέβλωση… η «φίμωση» της κριτικής σκέψης!

Καστελλοριζιανοί αλλά και απανταχού Έλληνες, ο εχθρός είναι εχθρός, πράττει όπως αυτός έχει σκοπό… στη πατρίδα μου όμως την Κύπρο εχθρός δεν θα στέριωνε αν εμείς οι Κύπριοι δεν είχαμε επιτρέψει να αφεθούμε σε άγνοια… αν προτού αφομοιώσουμε τα συνθήματα αντιλαμβανόμασταν την έννοια τους… αν φροντίζαμε εμείς και τα παιδιά μας να αναζητούσαμε την βαθύτερη αλήθεια των πραγμάτων… τελικά, ευκολότερο είναι να φταις τους ξένους παρά τον εαυτό σου για το κατάντημά σου… αν όμως δεν βοηθήσεις εσύ τον εαυτό σου γιατί να σε γνοιαστεί ο ξένος;

Ελπίζω, πραγματικά ελπίζω, ότι δεν θα αφεθείτε από τον Ελληνισμό και την πολιτεία στο έλεος της τύχης σας και των δυνατών, όπως κάποτε αφέθηκε και η ιδιαίτερη μου πατρίδα… Ελπίζω, πραγματικά ελπίζω, πως η πολιτεία θα αντιληφθεί έστω και την υστάτη την τεράστια σημασία που έχει το ακριτικό σας νησί… όχι μονάχα για τους υδρογονάνθρακες που την ποσότητα αλλά ίσως και την βιωσιμότητα τους για την Ελλάδα το μικρό σας νησί καθορίζει… αλλά γιατί επιτέλους ο Έλληνας πρέπει να διεκδικήσει αυτό που δικαιωματικά και νόμιμα του ανήκει, οργανωμένα, μεθοδικά, με τόλμη αλλά και στρατηγική, χωρίς κομματικές σκοπιμότητες… Τότε μόνον οι φίλοι μας θα βοηθήσουν και ο εχθρός όποιος και να είναι θα μας σεβαστεί…

Ελπίζω, πραγματικά ελπίζω, πως και εσείς, ακρίτες Καστελλοριζιανοί δεν θα θυσιαστείτε στον βωμό των κομματικών και προσωπικών συμφερόντων «Ελλήνων» ημιμαθών, «φιλοπάτριδων»…

Μετά τιμής,
Χάρης Σαμάρας

Λευκωσία, 27 Αυγούστου 2012


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Megisti (Kastellorizo) – History brief 

Megisti or Kastellorizo is the most easterly of all Greek Islands. The ancient name of the Island, is probably due to its first settler Megisteas. Another interpretation, however, is due to the fact that the island is the biggest from all small islands spread in the area (Megisti in Greek means bigger). The etymology of its later name Kastellorizo is derived from “castelli” (castle) and “rizovounia” (foothills of mountains). 

Megisti's history can be traced back to Neolithic times. Among the earliest settlers were the Pelasgians or Pelasgoi (pre- 5,000 BC), followed by the Minoans, Mycenaeans, Dorians and Lycians, all of whom left their mark in various ways. Many structures and uncovered artifacts attest to their tenure. 

Megisti's history is intense. It has a rich and glorious past. It played an important role in Greek history as early as its participation in the Persian wars nearly 2,500 years ago when its “Meagre” (albeit important) supplement of boats augmented the fleet of Themistocles in his victorious battle against Xerxes the conquering Persian Emperor. Megisti was also proudly honoring its obligation as a player in the first Athenian coalition. Through the years it has been connected with the Apostle St. Paul, several Saints, the Crusaders, the Johannites, the Byzantines, the Ottomans, various Sultans, Hannibal and other. For a while it was even the home of the cult Zeus Megisteas. 

The island had long navigational importance. Megisti has long been an important navigational way-point for the (ancient) mariners who plied the Arab-Euro sea lanes along the south coast of Turkey. Megisti was hard to miss. 

It was apparent that whoever controlled Megisti (in olden times) would also exert a dominating influence on this vital region of the Eastern Aegean (much like Gibraltar and the Bosporus). For this reason the island attracted more interest than its small size and population warranted. 

At Vigla, there are the remains of the Cyclopean wall built in the Mycenaean era. A sarcophagus found on the plateau of Agios Georgios in 1913 yielded a gold wreath with vine-leaves and grapes, a work of highest artistic value which is now in the National Archaeological Museum in Athens. 

Twenty two looted tombs at the point where the wreath was found date earlier than the 4th century BC. 

On the nearby tiny island of Ro, a tiled tomb of the 11th century was found, together with other objects of the 4th century BC. At that time, Megisti was one of the “Demes of Peraea”. It issued its own coins, which bore the head of Bacchus, crowned with ivy, on one side, and the word “Megisteon” on the other. 

Inscriptions found at the castle of Ai -Nikolas, which, as we know, was built by Sosicles, son of Nicagor, refer to Amios, that is, a man of Amos on Rhodes, who served as overseer on Megisti, and further inscriptions from the old castle give us the names of a number of other Rhodian overseers: Epicrates, son of Anaxicrates, Hexacesticnus, son of Lelius, Agesimachus, son of Hieron, Aeschynus, son of Diander, and Timostratus, son of Eucrates. In the 2nd century BC, the Rhodians sent Eudamus, in command of a squadron of 36 ships, to Megisti in order to prevent Hannibal entering the Aegean. Eudamus succeeded in confining him to Pamphylia. 

In 80 BC it was occupied by the Romans. About 718 AD it became the base for the Saracen pirates. Since the 14th century alone it has had many overlords and suffered many raiders including Italian, French, English, Turk, Arab, Catalan, Spanish, Cycladian, Venetian, Genoan, Neapolitan, Maltese, and German. Its hapless people have been raided, shanghaied, looted, abducted, enslaved, plundered, bombed, evacuated, and resettled many times. In 1943, for instance, British commandos landed on Kastelorizo. They evacuated the whole population to Egypt to protect them from German air attacks. Most of them did not return, but took the British offer to immigrate to Australia, where there are now about 50,000. 

During the period of the Byzantine Empire, Kastellorizo was part of the “Eparchy of the Islands”, the capital of which was Rhodes.

In 1306 the island was taken over by the Knights of St. John Hospitaller of Jerusalem, headed by Folques de Villaret. 

In 1523 it fell to the Ottomans despite its powerful fortifications but the inhabitants secured some special privileges but were under tribute to the Sultan. When the Greek Revolution of 1821 was declared, the island was enjoying great commercial and economic prosperity. It had a considerable number of ships which offered to the cause.

On September 22, 1659 during the war over Crete, the island was conquered by Venice.

Between 1828 and 1833 Kastellorizo joined the Greek Revolution against the Ottoman, but after the end of the Greek War of Independence it returned to the Ottoman Empire (according to the Protocol of London). 

On 14 March 1913 its Greek inhabitants imprisoned the Turkish governor and his Ottoman garrison and proclaimed a provisional government. 

In August of the same year, the Greek government sent from Samos a provisional governor supported by Evzones. But they, too, were expelled by the inhabitants on 20 October 1915.

On 28 December 1915, the French navy led by the cruiser “Jeanne d'Arc” occupied on the island at the behest of a pro-French local party which feared Turkish reprisals. The French quickly blocked another landing attempted on the same day by a Greek contingent of Evzones. 

Turkish shore batteries responded to the French occupation by shelling the island, in 1917 succeeding in sinking the British seaplane carrier “HMS Ben-my-Chree”.

As per the Treaty of Sevres the island was ultimately assigned to Italy. The Italian navy assumed it from the French on 1 March 1921. Megisti, under the Italian name Castelrosso, was then integrated in the possession of the “Isole Italiane dell’Egeo”.

The 1932 Convention between Italy and Turkey, which defined the sea border between the two powers, assigned all the islets of the small archipelago around Kastellorizo except Rho and Strongili to Turkey. 

Finally, Kastellorizo was assigned to Greece with the Paris Peace Treaties, 1947. In May 1945 it was still under British administration, but on September 15, 1947 effectively came under Greek administration. The island formally joined the Greek State on 7 March 1948 together with the other Dodecanese islands.

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Friday, May 11, 2012

The failure of the Greek State to provide for its citizens engendered a disillusioned society

Greece is a case of a state that failed, a case of despair that forced its citizens, those that are at least self-conscious, to exclaim instead of the more than valid “I am proud to be Greek”, the self-pitied “I am sorry to be Greek”. These are the same Greeks that abstained from voting in the recent elections or as an “immature” form of protest voted for radical parties than now possess a catalytic say in the future of the Country.

The oxymoron is that although more than 70% of Greek voters would like to remain in the Eurozone, the vast majority of them voted for far left-wing parties and far-right wing parties and the neo-Nazi Gold Dawn party, most of which want Greece out of Europe or are fiercely against the EU austerity measures...

Oddly, the country that bread such great thinkers and statesmen whose contributions are considered to be the basis of modern economic thought and management of the world of today, is a country that failed at almost every aspect and a state that is not in a position to provide for its citizens engendering a disillusioned society.
The responsibility lies with everybody but mostly with the Greek political leaders and citizens who have to surpass themselves, their complexes and despair. Characterized by a spirit of collectiveness putting their personal and party interests aside they have to all brawl for a European Greece. Only an idiot and ignorant would even insinuate that a Greece outside the Eurozone would be a better Greece. The moment that Greece exits the Eurozone, that same moment, Greeks will be reminiscent of the Nazi occupation with "snugness"!

View the full article here

See more at: www.pytheas.net

Thursday, May 10, 2012

Does another Leviathan lurk offshore Crete?

Pytheas Chairman & Group CEO, Mr. Harris A. Samaras is interviewed by Interfax

At an interview with Interfax’s Editor and Senior Reporter Leigh Elston, Pytheas Chairman & Group CEO, Harris A. Samaras expressed Pytheas’ opinion that Europe is currently confronted with a unique challenge and a remarkable opportunity! The already confirmed and estimated discoveries of substantial hydrocarbon deposits in the Southeastern Mediterranean signify that for the first time ever in Europe’s energy history, the EU may be guaranteed an uninterrupted supply of a traditional energy source!

A most important development (and a pan-European one), especially in view of recent scientific estimates that imply huge hydrocarbon deposits lie in the south and southwest of Crete. A development that the government of Greece has to set as priority and ensure that an appropriate framework and solid plan are put in place in order to commence investigation as quickly as possible.

Extracts from Interfax’s article:

In line with Cypriot ambitions to develop the island into a gas export hub, Harris Samaras, chairman and chief executive of investment bank Pytheas, believes a pipeline to Europe could be compatible with an LNG project. As long as the pipeline avoided the 3,000 metre Herodotus Abyssal Plain, it could be both economically and technically feasible, he told Interfax.

“To build a pipeline will take another 10 years, to build a liquefaction plant will be anything from four to six years. If even half of the deposits exist, let’s say 20-30 tcm, there’s enough gas there to satisfy Europe’s gas demands for at least a century,” he said.

“Cyprus and Israel can commence exploitation with CNG, then with LNG and pipelines. In regard to Greece, it is much simpler; connect Crete to mainland Greece via pipeline and then through Italy to the rest of Europe… but it all depends on how promptly Greece will go ahead with its exploration activities.”

EU involvement

With the future of the government in Athens uncertain, Samaras stressed the importance of EU involvement in both encouraging the exploration of Cretan and Greek gas reserves, and the development of the pipeline.

“This is an opportunity for the EU to limit its external vulnerability to imported hydrocarbons and, at the same time, to provide secure and affordable energy to EU consumers, not to mention promote growth and jobs. It only makes sense for the EU to be more actively involved. Why shouldn’t they when it is the EU that will benefit more than anyone else?” Samaras said.

View the whole article here

See more at www.pytheas.net

Friday, April 20, 2012

Southeastern Mediterranean hydrocarbons - A new Energy Corridor for the EU?

The (a) confirmation of significant quantities of hydrocarbons in Cyprus, (b) the scientific estimates of equally significant quantities in the south and southwest of the Greek island of Crete and (c) the officially declared increased cooperation between Cyprus, Israel and Greece to jointly exploit their hydrocarbon deposits may prove to be a tremendous opportunity not only for Cyprus, Greece and Israel but for the EU as a whole.  

World renowned scientists claim that the hydrocarbon deposits that lie south and southwest of the island of Crete are huge; and maybe bigger than those in the Levantine Basin; they dare to state that within the EEZ of Greece there may be as much as 51 tcm of natural gas! Could this lead into the making of a new energy corridor for the EU? Shouldn’t the EU be more actively involved in the efforts of its member countries, Greece and Cyprus? Isn’t this for the EU a project of Pan-European interest thus include it in its energy policy, coordinate and assist with technical knowhow but also with political leverage and other? As critical year 2020 is around the corner, aren’t the already scientific interpretations important enough to accelerate the EU think tanks and policy institutes view on the whole issue?


More at: www.pytheas.net

Monday, April 2, 2012

Cretan Gas Fields – A new perspective for Greece’s hydrocarbon resources

It is our pleasure to introduce another valued paper produced by world accredited scientists, Mr. Alain Bruneton, Dr. Elias Konofagos and Professor Anthony E. Foscolos. A scientific document that attempts to explain why there must be hydrocarbon deposits in the south and southwest of offshore Crete, substantial deposits that are more than likely as substantial as those confirmed and estimated to exist in the Levantine Basin...

Cretan Gas Fields – A new perspective for Greece’s hydrocarbon resources

The already confirmed and estimated discoveries of substantial hydrocarbon deposits in the Eastern Mediterranean – such are those confirmed within the Exclusive Economic Zones (EEZs) of Cyprus and Israel – along with those discussed in this Paper (which more than likely lie offshore Crete), but also elsewhere within the EEZ of Greece, such is the area close and adjacent to Hydrocarbon Exploration Block #4 of Cyprus, signify that for the first time ever in Europe’s energy history, the EU may be guaranteed an uninterrupted supply of a traditional energy source! A most important development (and a pan-European one) that the government of Greece has to set as priority and ensure that an appropriate framework and solid plan are put in place in order to commence investigation as quickly as possible.

Closing, the estimated Cretan hydrocarbon deposits complete the European energy puzzle as they contribute to a now more than possible (long-term) scenario that envisages an Israel-Cyprus-Greece-Italy pipeline network, dictating a transit route that avoids non-EU countries and thus guaranteeing an uninterrupted energy supply source for the EU, of the EU.

Hoping that you will recognize the importance of this Paper as we did, we would be happy to receive your comments and queries on the subject.

Monday, March 19, 2012

In search for Excellence through Critical Thinking & Thought Leadership

How can one ask the best Why, How, What if, or When, if that person is not in a position to identify the aspects and parameters that make that idea a brilliant idea, that is not just an idea but also a “sensible” one? How can one be courageous and vigilant and fight for and pursue the “right” cause, project or idea? How can one be curious enough to become imaginative about life’s pleasures and rewards? How can one be creative and fulfill his vision with passion and purpose? How can one become a contributing and productive member of society but first to himself? How can one respect himself and others? How can one master the essence of life?

Can a “sensible” idea emerge without critical thinking? And can an idea be actively and skillfully conceptualized, applied, analyzed, synthesized, generalized, evaluated, observed, experienced reflected, reasoned, or communicated best as a guide to belief and action, with clarity, accuracy, precision, consistency, relevance, sound evidence, good reasons, depth, breadth, and fairness, if it is not “embraced” by a critical thinking process?

Monday, February 20, 2012

The Economic and Geopolitical importance of Eastern Mediterranean gas fields for Greece and the EU

It is our pleasure to introduce to yourselves a valued paper produced by world accredited scientists, Mr. Alain Bruneton, Dr. Elias Konofagos and Professor Anthony E. Foscolos. A scientific document that attempts to prove that there must be enough hydrocarbon deposits in the South-Eastern Mediterranean to contribute significantly to the ever-starved for energy European Union.


Now, especially after the confirmation of significant natural gas deposits in the Exclusive Economic Zone of EU member state Cyprus, the more than likely natural gas reserves that lie within the EEZ of Greece and the huge hydrocarbon potential of the Eastern Mediterranean as a whole, make this Paper more current than ever.

Europe is currently confronted with a unique challenge and a remarkable opportunity! A challenge and opportunity faced also by countries of the Eastern Mediterranean, EU-member and non-EU alike. For the first time ever in Europe’s energy history, the EU is guaranteed an uninterrupted supply of a traditional energy source: The already confirmed and estimated discoveries of substantial hydrocarbon deposits in the Eastern Mediterranean can be complimented by the scientifically estimated deposits within the Exclusive Economic Zone of Greece and in particular those that lie south and southwest of the island of Crete.

Closing, the estimated Greek hydrocarbon deposits complete the European energy puzzle as they contribute to a now more than possible (long-term) scenario that envisages an Israel-Cyprus-Greece-Italy pipeline network, dictating a transit route that avoids non-EU countries and thus guaranteeing an uninterrupted energy supply source for the EU, of the EU.

Hoping that you will recognize the importance of this Paper as we did, we would be happy to receive your comments and queries on the subject.


See more at Pytheas

Wednesday, January 18, 2012

Cyprus Hydrocarbons - A Presentation

We provide herewith extracts from the Presentation:

The confirmation of significant quantities of hydrocarbons in Cyprus, (the Levantine Basin, the Nile Delta Cone, the Eratosthenes Continental Block and the Herodotus Basin) may prove to be a tremendous opportunity not only for the island but for the EU as a whole. The U.S. Geological Survey estimates that the aforementioned areas hold an estimated 13.8 trillion cubic meters (tcm) of natural gas. Also as per the BEICIP/FRANLAB and the Institut Français du Pétrole, the Cyprus Exclusive Economic Zone alone holds an estimated 3 tcm of natural gas.

Cyprus – an EU member country, strategically located in the Eastern Mediterranean is a long established international business and financial center with the lowest corporate tax in the EU and about 50 double tax treaties; an established gateway to the world of international trade with tested legislation and more than adequate infrastructure of all sorts – has now the potential to becoming a guaranteed primary natural gas source and transit route to the EU.

Can Cyprus become a guaranteed primary gas source and transit route to the EU?

EU and Natural Gas

According to Eurogas the share of natural gas in the EU is expected to reach 30% of the primary energy consumption in 2030 while demand for the same period will increase by 43%. Domestic production however will decrease. At end-2010, European production accounted for 59% of supplies to EU gas markets and is expected to drop to a third by 2020 and to a further quarter by 2030. By 2015 a substantial gap emerges between demand and supply coming from European production or imported from outside Europe. The European gas industry must focus its gas procurement especially for the period after 2015.

For the depending on imports European natural gas industry, the sufficient gas reserves available in the medium to long run are in countries which are NOT so accessible in terms of transmission distances or exist in fields that are increasingly difficult to develop (with the consequence of rising production and transport costs). Taking into account the growing gas demand worldwide and the decreasing indigenous production in Europe, it will require huge efforts and substantial investments of the suppliers to mobilize this gas in time. Besides, when assessing supply options, it has to be kept in mind that competition for supply will become far stiffer especially from North America and the emerging economies of South-East Asia.

Solution to EU Natural Gas shortage

The annual NG consumption of the EU amounts to about 500 bcm. Almost half of it is imported from Russia, 160 bcm from Algeria and 90 bcm from Libya. By 2020 the demand for natural gas in Europe will increase by another 225 bcm. The total energy deficit (Oil & Gas) of the EU will therefore reach 845 bcm. These EU requirements for NG can neither be satisfied by Russia – which has 44 tcm of NG resources and an annual production of 600 bcm – as 2/3 of its reserves and production are allocated for domestic uses, nor by Algeria and Libya as their reserves amount to only 6.2 tcm. Now however, the demand deficit can be satisfied from the newly discovered and expected NG deposits of the Eastern Mediterranean.

According to the USGS, besides the NG deposits already discovered in Egypt and Israel (~3 tcm), the deposits that lie in the EEZs of Cyprus, Israel and Egypt alone are conservatively estimated to another 10.8 tcm. This brings the total of proven and potential reserves to 13.8 tcm; an amount that is almost 12 times more NG than what Europe expects to receive via the Nabucco Pipeline (1.2 tcm). If 3 tcm is generously subtracted in order to satisfy the domestic needs of Cyprus, Israel and Egypt over the next 30 years, the remaining amount of 10.8 tcm could satisfy the EU’s natural gas requirements by 2020 for 35 years!

Scenario optimum

Up until the liquefaction plant is constructed in Cyprus, the export of the Eastern Mediterranean NG surplus can by facilitated via compressed natural gas vessels (CNG) loading directly from the offshore field floating production systems to EU ports. In the short- to medium-term and after the liquefaction plant is operational, NG can be transported to the EU via the more efficient LNG vessels (CNG’s volumetric energy density is estimated to be 42% of LNG’s).

In the long-term following further offshore discoveries in the region, the ability to build two or more pipelines to transport natural gas from Haifa (Israel) via Cyprus to the island of Crete (Greece) and then to Western Greece and Italy into the European NG network makes only sense. The “East Med-EU Pipeline” could provide energy security for the EU for at least half a century.

It is also important to note that the estimated giant shale gas reserves located in the area of Shefla onshore Israel and those in the offshore south of Crete basins and the rest of the Greek EEZ can only enrich the already estimated substantial volumes. In the longer term, natural gas from Iraq, Iran, Saudi Arabia and Qatar and even from the Caspian Sea could only make sense to connect to the “East Med-EU Pipeline” when the political environment allows. 

Challenging considerations

Complex challenges lie ahead for both Cyprus (and the EU):

  Is a natural gas liquefaction plant too expensive an option for Cyprus?

  Should the natural gas liquefaction plant be considered at all or should Cyprus consider only the pipeline solution to mainland Europe?

  Up until the natural gas liquefaction plant is constructed or pipeline to mainland Europe is installed, is CNG transportation a feasible option?

  Is CNG transportation a long-term solution?

  Is the installation of the pipeline from Cyprus to mainland Europe feasible, or the water depth and the underwater terrain forbid such a task?

  Would Cyprus alone be in the position to safeguard the valuable pipeline from terrorist activities?

  What if a JV is structured between Cyprus and the EU for the exploitation of the hydrocarbons in Cyprus and the Eastern Mediterranean (along with the participation of Israel, Lebanon, Egypt and Syria)?

  Will the countries in the Levantine Basin, such are Israel and Lebanon, manage to put aside their differences and cooperate for the real benefit of their people or would this be the cause of more tension?

  Should a pipeline running from Cyprus gas fields onto Turkey and then to the proposed Nabucco Pipeline be a Cyprus (and EU) consideration at all?

  Is granting companies of Russian interests gas concessions for Cyprus and the EU a wise decision? If yes, how could Cyprus’ and the EU’s interests be safeguarded?

  Does Cyprus have the appropriate expertise on board to monitoring and overseeing the existing and future drilling operations?

  Should Cyprus develop a domestic natural gas distribution network or not?

  What about the oil deposits (when Block 12 alone is estimated to have a huge 3.7 billion barrels)? What is the infrastructure required?

Conclusion

The vulnerability of the EU to energy supply risks is a fact but this can be no more. If the most conservative data is taken into account in regard to the natural gas reserves discovered in the exclusive economic zone (EEZ) of Cyprus (and the Eastern Mediterranean), for the first time ever in European energy history, the EU is guaranteed an uninterrupted supply of a traditional energy source.

Conservative estimates of reserves in the Eastern Mediterranean can satisfy EU’s NG requirements for at least half a century. Results of hydrocarbon exploration in Cyprus so far exceeded all expectations. Note that recent findings of Cyprus’ Block 12 (or Aphrodite) along with those of Israel’s in the Leviathan block, rank among the largest discovered worldwide in the last 10 years. The amount of gas from these two parcels alone is estimated to equal half of the known reserves of those of the U.S.; a country with a population of 310 million, whereas the total population of Cyprus and Israel is less than 9 million.

Most interestingly, seismic surveys indicate that the other blocks in the Cyprus EEZ are expected to reveal much more NG deposits, e.g. Block 4, in the Herodotus Basin, is believed to contain three times more natural gas than Block 12 and a lot more oil…

It is also important to note that the oil deposits are also significant. The 3.7 billion barrels of recoverable oil deposits estimated to lie within Block 12 alone can be with current crude oil prices roughly translated into US$330 billion.

As the findings one after the other are confirmed Cyprus will attract more and more foreign direct investments. Required long term investments in infrastructure, maintenance, support services, financing and banking, suggest that also job creation will be long term. It is estimated that during the next decade an additional 300,000 jobs will be required to satisfy the needs of the Cyprus’ hydrocarbon industry; a phenomenon that will positively affect not only the Cyprus economy but those of the neighboring countries as well.

The hydrocarbon discoveries in the Eastern Mediterranean are bound to serve as a catalyst toward greater cooperation amongst the participant countries. The joint exploitation between these countries and the launching of joint projects has the potential to change the whole political and economic scene of the entire region to the better.

Most importantly the gas-starved EU has to seize this opportunity for a guaranteed energy source supply. Cyprus, Israel and the EU (with the lead coordination of the EU and Cyprus) but also Egypt, Lebanon and Syria should jointly work to ensure that an appropriate framework and solid plan are in place in order to complete exploration drilling and commence exploitation as quickly as possible. What if a JV is structured with the EU for the exploitation of the hydrocarbons in the Eastern Mediterranean along with the participation of Greece? Note that the participation of Greece is not only important because of the envisaged pipeline route but also for the substantial hydrocarbon deposits that are estimated to lie within its EEZ.

Such a venture will minimize both sovereign and financial risks for all parties involved. The transit route that should avoid non-EU countries, via a pipeline to mainland Greece and then to the rest of Europe as described herewith in Scenario Optimum is the only way for an uninterrupted and guaranteed energy source supply for the EU.

The damaged Iraq-Syria Pipeline when reinstituted and when the closed Trans-Arabian Pipeline reopened, can both become an additional source enhancer (and when the political environment allows); Saudi Arabia, Iraq, Qatar and not only could also connect to Cyprus in the longer term…

Cyprus, an EU member country, a regional business and financial hub (and an established investment gateway to and from Russia) is firmly on its way to becoming an energy superpower and a guaranteed primary natural gas source and transit route to the EU, of the EU; a hub of reconciliation and regional stability!