* Greece and Cyprus bidding rounds attract wide interest
* Cairn hopes to drill offshore Spain by 2015
* Territorial disputes and environmental risks remain
By Emma Farge
GENEVA, Sept 12 Small to mid-sized oil firms are
stepping up exploration off Greece and Spain as the indebted
governments look to their own offshore territory in the
Mediterranean to cut dependence on expensive imports, executives
A huge gas find off Cyprus last year has raised hopes for
further discoveries in other little-explored parts of the
Mediterranean at a time when oil prices near $115 a
barrel are hurting European importers.
Environmental concerns and simmering territorial disputes
between countries along the sea's eastern coast may have put off
investors in the past, said executives at an oil conference
organised by Global Pacific & Partners on Tuesday.
But the Euro zone debt crisis has made governments have
another look at the oil potentially lurking in their own
"It's an open discussion whether there should be any
drilling in the Mediterranean, but there are policy decisions
being made because when the economy starts to look fragile
natural resources are a very good answer," said Rob Jones, head
of Mediterranean assets at Cairn Energy.
Cairn acquired five blocks to explore in the Gulf of
Valencia near the Spanish island of Ibiza last year and Jones
said he was hopeful the company would obtain environmental
licences to begin drilling by 2015.
The interest in the Mediterranean is also being driven by
security concerns further afield - particularly the potential
threat to global supplies by Iran's dispute with world powers
over its nuclear programme, said firms at the conference.
"Countries are now developing their little garden plots
instead of driving all the way to the supermarket," said Janusz
Wojtek Gorniewicz, Geneva-based director for business
development at private oil and gas producer and explorer
Geopetrol International Holding, which is currently scouting for
opportunities in the region.
"It's cheaper for them and more secure should a situation
arise like if Iran shuts the Straits of Hormuz," he added.
"GREECE IS OPENING UP"
Spain spends around $130 million a day on crude oil imports
based on the current Brent price.
Greece, which imports nearly all its oil and natural gas and
spends 5 percent of its GDP on the purchases, has also
accelerated the development of its offshore resources.
Eleven firms including UK-based Chariot Oil and Gas
and Schlumberger submitted bids for oil and natural
gas in three blocks in the western part of the country this
summer and seismic tests are being carried out to pave the way
for an oil and gas drilling round in 2014.
"Greece is opening up. It's an under-explored area and you
have a government that is taking all the right steps to
encourage investment," said Mathios Rigas, Chief Executive of
Energean Oil & Gas which is already pumping oil at the country's
Drilling to the east of Greece in the Aegean Sea might prove
more difficult because of a territorial dispute with Turkey.
Still, Cyprus in May drew 15 bids for nine offshore oil blocks
even though its Nicosia government is not recognised by Turkey.
Surveys suggest more than 100 trillion cubic feet (2.831
trillion cubic metres) of reserves lie untapped in the eastern
Mediterranean basin between Cyprus and Israel - almost equal to
the world's total annual consumption of natural gas.
Israel's offshore Leviathan field, the biggest offshore find
in the past decade, is currently being developed although
executives said the lack of a sub-sea border with Lebanon could
deter future investors.