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East Mediterranean news roundup

Oil and gas deposits in the eastern Mediterranean have not made a major impact on the international scene, developing later than more well-established regions such as the Middle East. However, the area is becoming much more economically important, both as a source of oil and gas and as a transit region for the resources. Here is the latest news from this part of the globe:


Greece reveals plans for €2bn Russian gas pipeline

Greece has announced that it plans to construct a €2 billion (around $2.2 billion) pipeline with Russia. The planned project - entitled the South European Pipeline - would see 47 billion cubic metres of natural gas transported through Greece and on to Europe from 2018 onwards.

This was announced by Greek energy minister Panayotis Lafazanis on July 9th. Mr Lafazanis said that a deal of this magnitude could create 20,000 jobs for the Greek people, which is needed in a country with an unemployment rate of over 25 per cent.


Is the East Thasos oil field the answer to Greece's economic woes?

Greece is going through a turbulent economic time at the moment, but one key businessman believes there is a solution: oil. Jack Grynberg, president and CEO of Grynberg Petroleum Co., has indicated that the East Thasos oil field in the Aegean Sea could bring significant revenues to the nation.

Writing in the Wall Street Journal, Mr Grynberg said: "The East Thasos oil field today should produce at least 1.6 billion barrels of oil." He added that he had tried drilling in this area back in 1975, but it was not a financially sound plan. Thanks to advances in technology, it would now be extremely profitable for Greece to do so.

Mr Grynberg estimates that drilling in this area could benefit Greece to the tune of $35 billion per year. Four other oil-bearing geological structures in the Aegean Sea could cause another $35 billion in net revenue to flow into Greece, should the nation explore and drill there.


EIA reveals Turkey's growing role as a transit hub

A new report from the US Energy Information Administration (EIA) has described Turkey as "well-placed to serve as a hub for oil and natural gas supply headed to Europe" and "a major transit point for oil". The publication, entitled 'Turkey: International energy data and analysis', is a new look at the state of Turkey's oil and gas industry.

Turkey's favourable location was highlighted as one of the reasons it is becoming a transit hub for hydrocarbons. The nation already imports heavily from other countries, consuming an average of 712,000 barrels of liquid hydrocarbons per day in 2014, and will be able to transport some of this to Europe once the appropriate pipelines are created.


Cypriot president hints at future joint drilling

Mustafa Akinci, president of the Turkish Republic of Northern Cyprus, has declared that Cyprus' resource problems could be solved by combining efforts with Greek Cyprus to explore and drill for oil. This announcement was made to an audience that included Greek Cypriot president Nicos Anastasiades, as well as a number of other high-ranking politicians.

Cyprus needs "to develop and implement such plans that enable drilling and sale of natural resources that benefits all Cypriot people," said Mr Akinci. He added: "Natural resources belong to all people of Cyprus. They must serve as a source for cooperation rather than conflict."

Exploratory drilling activities for oil and gas have already been undertaken in the east Mediterranean by Greek Cypriots, although this has been met with protests from the Turkish side. However, Mr Akinci's proclamation could lead to growth in these activities spurred on by the increased cooperation.


Vitol believed to have won €3bn Cypriot gas deal

Cyprus' state gas company, the Natural Gas Public Company (DEFA), is believed to have accepted a bid from Dutch energy firm Vitol to supply the island with liquefied natural gas (LNG). DEFA has until the end of July to conclude this deal, which is estimated to be worth around €3 billion.

Greek conglomerate M&M, a group made up of the Mytilineos and Vardinogiannis companies along with the Netherlands' Trafigura, was also bidding for this deal. Nothing is officially signed yet, but DEFA head Eleni Vasiliadou has said that the tender is at a "critical stage".
It is not known whether the LNG will be supplied to either a land-based or a floating facility, but if it is the latter then a Floating Storage and Re-gasification Unit will be used.

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