backLONDON, June 19, 2014 – King & Spalding represented the Government of Greece on landmark agreements for the award of the first new oil and gas exploration leases in the country for nearly 20 years. The agreements may have an estimated investment value of €700 million.
The Ministry of Environment Energy & Climate Change launched an “open door” sale of exploration rights of license areas in Western Greece in 2012, which it is estimated may have up to 300 million barrels of oil deposits. The government recently signed agreements with private sector parties for oil and gas exploration rights in three blocks, Ioannina, Katakolon and West Patraikos Gulf.
A group comprising Energean Oil & Gas and Canada-based Petra Petroleum secured the lease for the Ioannina block, an onshore block located in Epirus, Western Greece, covering an area of 4,187 square kilometres. Energean also secured the lease for the Katakolon block, an offshore block located in the Northwest Peloponnese covering an area of 545 square kilometres, with a bid alongside UK-headquartered Trajan Oil.
A Hellenic Petroleum-led bid won the lease agreement for the West Gulf of Patraikos block, which covers 1,892 square kilometres in the Gulf of Patra. Italian company Edison International and Ireland-based Petroceltic Resources also hold a working interest in the venture.
King & Spalding acted as international counsel to the Greek state on all aspects of the agreements. London managing partner Garry Pegg led the advisory team, which included partner Hywel Jones and associate Anthony Long.
“These concessions are a significant milestone for Greece because they represent the first oil exploration licenses in the country since 1996,” Pegg commented. “The successful international bidders may be expected to invest around €700 million, depending upon the success of the exploration campaign. The investments will help revitalise interest in oil and gas in Greece, a market which I am told has an estimated value of up to €6 billion.”
Alexandra Sdoukou, Head of Minister's Cabinet at the Greek Ministry of Environment, Energy & Climate Change, added: “We found in Garry Pegg and the King & Spalding team fully committed legal advisers who passed on their invaluable experience and knowledge during the long negotiations with the concessionaires.”
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