ExxonMobil Forms Consortium, Bids for Licenses Off Greece

ExxonMobil Corporation XOM along with other oil majors — Total SA TOT and Repsol — have submitted bids for oil and gas exploration off Greece.

One consortium comprises ExxonMobil (holding 40%), Total (40%) and Hellenic Petroleum. The second consortium comprises Spain's Repsol and Hellenic Petroleum. The first consortium submitted a bid to jointly explore off Crete, while the other consortium intends to commence exploration in a block in the Ionian Sea.

The tenders were launched in 2017 after expressions of interest were received from the ExxonMobil-led consortium for the two sites off Crete and from Greece's Energean for the Ionian block. However, Energean has backed out since then.

Subject to final approval by the Energy Ministry, Hellenic Hydrocarbons Resources Management (HHRM) will immediately appraise the offers. The large finds in eastern Mediterranean has motivated Greece to seek investment in its energy sector as it makes an effort to recover from years of economic crisis.

Western Greece is largely unexplored and not much information relating to its hydrocarbon potential is available. The areas off Crete have been described as "high-risk reward" by HHRM. Currently, ExxonMobil and Total are exploring off Cyprus.

The first test drilling in the Patraikos Gulf off the Peloponnese peninsula is intended to be carried out by Hellenic Petroleum in 2019. Two other onshore blocks in western Greece have also been awarded to the company.

The award of these licenses will provide ExxonMobil access to new regions to expand and boost performance. The development will help the company generate more cashflow and counter the volatility in its upstream business.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report