Cash Strapped Greek Government Hopes for Rising Oil Output

From Oil Price

By John Daly

The dire state of the Greek economy is well known to its European Union partners. Further hammering the economy are Greece’s massive oil imports. According to the U.S. government’s Energy Information Administration, in 2012 Greece produced only 7,500 barrels per day, while consuming 313,240 bpd, heavily impacting the country’s payments for imports.

And by any yardstick, the Greek economy is in bad shape, with unemployment topping 26 percent. The short-term prospects are equally dire, with the Institute for Economic and Industrial Research  projecting in its quarterly report issued on 9 July that the Greek economy is expected to shrink by 4.8-5.0 pct this year, slightly higher than its initial estimates for 2013, noting that its estimate was slightly higher compared with recent estimates made by the European Union and the IMF (-4.2 percent) and the OECD (-4.8 percent). Employment is expected to suffer later in the year with workers’ dismissals in the public sector as envisaged in a medium-term framework of Greece’s fiscal strategy for 2013-2016, with unemployment projected to rise to 27.8 pct of the workforce by the end of the year.

Accordingly, Athens is seeking to ameliorate its fiscal situation via its energy sector, first by ramping up the country’s oil and natural gas production and secondly, establishing the country as a transit nation.

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There is some slight hope for increasing Greek oil production, as on 10 July Greece’s Energean Oil and Gas firm announced that it was to begin a new offshore drilling program in the Prinos oil field in the in the northern Aegean Sea, between the island of Thasos and city of Kavala on the mainland in an effort to double its output there. The Prinos Oil Field was discovered in 1971. Developed by Energean Oil and Gas, it began production four years later. The Prinos oil field proven reserves are estimated at around 90 million barrels.

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