A consortium led by Total moved a step closer to exploring for oil and gas offshore Greece after signing a lease Oct.31 with the government for a block in the Ionian Sea.

Greece wants to tap into its limited oil reserves to reduce dependence on oil imports and boost public finances. The country awarded the contract to the Total consortium, which also includes Greece’s biggest oil refiner Hellenic Petroleum and Italy’s Edison, in October 2016.

“Undoubtedly it is a vote of confidence in the Greek economy,” Energy Minister George Stathakis said of the agreement.

Total will operate the block with a 50% take, while Edison and Hellenic Petroleum will each hold 25%. The agreement must be ratified by Greece’s parliament before exploration work can begin.

Western Greece is a frontier, underexplored area and very little data exists on its hydrocarbon potential.

Bernard Clement, a senior Total executive for the Caspian and Southern Europe, said it would maintain “realistic expectations” before obtaining data.

Total has shown interest in the eastern Mediterranean following major gas discoveries offshore Israel and Egypt. The company is drilling for oil offshore Cyprus.

Together with Hellenic Petroleum in a consortium led by U.S. oil major ExxonMobil, Total has also expressed interest in exploration at two sites offshore Crete, prompting Greece to launch a tender.

Looking West

Greece, like other European countries, relies on Russian gas imports which account for over more than 60% of supplies. Russia covers about a third of Greece’s oil needs.

Athens also wants to attract investment into the oil industry as it tries to emerge from years of economic crisis.

During a meeting with U.S. President Donald Trump this month, Greek Prime Minister Alexis Tsipras said Athens wanted U.S. investment in energy too, and it planned to set up a task force to overcome red tape.

“It helps a lot to keep the bureaucracy moving if you have a clear message from the top that the answer to investors should be ‘yes,’” U.S. ambassador to Greece, Geoffrey Pyatt, told Reuters.

Greece has one LNG terminal offshore Athens, where it imports Algerian gas, but an official at state-run gas firm DEPA said it plans to invite U.S. companies to ship LNG there for the first time.

The country is also developing a floating storage and regasification unit (FSRU) offshore Alexandroupolis, a city close to the Turkish and Bulgarian borders near where EU-backed pipelines are being built to cut reliance on Russian gas.

“Our vision for Greece [is] as a European energy hub,” said Pyatt, a former U.S. ambassador to Ukraine.

The FSRU, with an estimated annual capacity of 6.1 Bcm (215 Bcf), will seek to supply gas to southeastern Europe via the Interconnector Greece-Bulgaria (IGB) pipeline, which is due to begin construction next year.

The IGB and the FSRU could be connected to the Trans-Adriatic Pipeline which is being built to carry Caspian gas to European markets, which currently depends on Russian oil giant Gazprom for a third of its supply.

“You have several American companies that are looking at the FSRU,” Pyatt said. “We very much hope to see an American company also become involved.”

Offshore