Chevron’s Hydrocarbon Exploration Bid: Key Terms of the Agreement Unveiled

The Ministry of Environment and Energy (YPE) has published a decision initiating the tender for hydrocarbon exploration in the maritime areas south of the Peloponnese (‘A2’ and ‘South Peloponnese’) and south of Crete (‘South Crete 1’ and ‘South Crete 2’). This follows the acceptance of interest expressed by Chevron Balkans Exploration B.V. for one maritime area south of the Peloponnese and two south of Crete, as well as HELLeniQ UPSTREAM KYPARISSIAKOS GULF SINGLE MEMBER S.A. for the ‘A2’ area south of the Peloponnese. The international tender will be announced for 90 days in the Official Journal of the European Union to invite bids from interested companies. According to the decision, public revenues based on the special income tax amount to 20%, with an additional 5% regional tax. The lease fee is tied to the R/C ratio, where R represents cumulative gross revenue and C cumulative costs. If the R coefficient is less than or equal to 0.5, the lease fee ranges from a minimum of 4% of the produced quantity. Leaseholders are subject to a specific income tax at a rate of 20% and a regional tax at a rate of 5%, with no additional regular or extraordinary contributions or fees for the state or third parties. Capital expenditures for research and development can be amortized between 40% and 70% annually. The exploration phase lasts up to seven years and is divided into three stages, each associated with a separate work program. Upon discovering commercially exploitable reserves, the exploitation phase begins, lasting 25 years with possible extensions of two five-year periods contingent upon renegotiation of terms. All agreements are governed by Greek law, and disputes will be resolved by experts or arbitration.