By Paris Ayiomamitis

The 40 per cent drop in the oil price to around $60 a barrel since June is seen as the biggest upheaval in the global economy this year and it is fuelling concerns in Greece which wants to tap its hydrocarbon potential.

With analysts predicting  that international energy companies will cut investmentsi n new projects by 25% or more in 2015, authorities are concerned that Greek plans to allow oil exploration could come under threat, Greek daily Imerisia (link in Greek) reported.

Greece had invited bids for deep-sea oil exploration in a large offshore area in the Ionian Sea and south of Crete with two international tenders, but its plans could be hard hit by the dramatic plunge in oil prices, local media reports suggested last week.

The cash-strapped country wants to tap its hydrocarbon potential to reduce oil imports that totalled €15.6 billion in 2013, or 8.6 percent of its GDP. According to the research and advisory firm Wood Mackenzie, the top 40 oil companies would collectively need to slash spending by 37% to keep net debt flat if global oil prices were at $60 a barrel.

“In this climate it is very difficult to predict the outcome of the tenders already under way,” Imerisia’s report said, adding that the main question is which, and how many companies, will submit bids by the May deadline.    

Shortly before the tenders were announced for the 20 blocks off Crete and in the Ionian Sea, Environment Minister Yiannis Maniatis said in late October that there were no indications that the dramatic drop in oil prices would have an adverse impact on Greek oil exploration plans as interest remained strong.

Investments, he said, are long–term and factor in oil prices over the next four decades.

However his optimism was not shared by the report in Imerisia which argued that the cuts by energy companies in 2015 and the huge costs involved in deep-sea oil exploration could dampen Greece’s ambitions.

“There is concern because Greece’s deposits, especially those off Crete, are at a great sea depth and render exploration and exploitation a costly affair…and expensive projects are the first to be cut in times of crisis,” the site added.