Greece has announced the start of the process for the exploitation of the 23 blocks

Greece has announced the start of the process for the exploitation of the 23 blocks

 

By Spiros Sideris – Athens

At least 4% of the value of oil or natural gas, 20% income tax and regional tax of 5% will have to pay to the Greek state the companies that will undertake the research in the areas of Ionian and south of Crete, but also in three land areas (Arta , Aetolia, NW Peloponnese), for which the relevant contracts have been signed by the Minister of Environment, Energy and Climate Change Yiannis Maniatis.

For the evaluation of the offers the most important factor will be the offer for the rent. Also into account will be taken the level of investment, the “signing bonus” of the contract, the costs for the training of staff, and the rate of depreciation. According to the publication, the rent will be scaled based on the ratio of income/expenses, with a lower limit of 4% of the quantity of hydrocarbons produced. It also forsees that the lessee is subject to 20% income tax, and 5% regional tax, without any additional regular or special levy, duty or other charges of any kind.

The two decrees that will be sent for publication in the Government Gazette and then in the official Journal of the European Union regard:

1. The announcement of the international tender for the concession of the exploration and exploitation rights on 20 marine areas (blocks) in the Ionian Sea and south of Crete. In accordance with the relevant law, the bidding will start from the date of its publication in the Official Journal of the EU and will run for six months. It is therefore estimated that that the bidding deadline will expire in March 2015.

2. The international bidding contest for the three land areas in western Greece, “Arta – Preveza”, “Aetolia” and “Northwest Peloponnese”, for which the company ENEL had announced its interest in mid-April. Under the legislation, investors are advised to register their interest and to bid for these areas. The deadline for the submission of tenders is 90 days from its publication in the Official Journal of the EU

The investigation stage lasts up to 8 years, with the possibility of an extension. The exploitation stage begins with the declaration of commercially exploitable deposit detection of hydrocarbons (oil or gas) and lasts for 25 years, renewable for another two periods of five years. Research and exploitation must be conducted in full compliance with European legislation on energy and the environment, including the Environmental Impact Study (EIS) and, in regard to the sea areas to be granted, the new directive on offshore safety.

Interested companies should submit, in addition to their financial offer, documents that provide proof of their legal, financial and technical capacity to carry out investigations, ie in the case of marine areas, among other things, to have experience in marine areas of large and extremely large deep sea (over 1,000 meters).

In his statement, the Minister of Environment, Energy and Climate Change Yiannis Maniatis said: “we promised to start competitions in mid 2014, we kept strict timelines, we overcame the challenges and today we prove that Greece fully respects its commitments in the field of hydrocarbon exploration. We have created the necessary conditions and the attractive investment environment necessary for successful, efficient and safe operations of exploration and exploitation of hydrocarbons in Greek territory from serious companies of the international oil market. With transparency, speed and respect to the environment we utilize the resources of the country and shape the new national production model”.