Stavros KALAFATIS Member of Parliament - Region Thessaloniki A' Sector Head for Energy and Natural Resources - NEW DEMOCRACY PARTY

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1 Economist Conferences Investment Energy Summit Greece, Cyprus, Israel "Re-designing the European energy map" Wednesday, March 28th 2012 (13:00) (Divani Apollon Palace & Spa Hotel, Athens Vouliagmeni, Greece) Session "Energy Exploration in Greece : Its Significance to Greece's Competitiveness and Growth" (Exclusive economic zones : a necessity or not? - The scientific perspective.) Dear congressmen- Ladies and gentlemen, Energy, as being one of the most important and dynamic sectors of national economy should hold a key role in this new starting point for the restoration of Greece. More than ever, our country has shown that it disposes those comparative advantages that make it both a safe international energy channel, and at the same time a potentially major energy producer in Southeast Europe. In this frame the basic objective is to ensure the country's energy supply as well as the export of domestic energy production through its channeling to European destinations. The construction and passage of major energy pipelines and oil, gas and electricity networks, The focusing on research and extraction of hydrocarbons, The exploitation of mineral resources and geothermal energy, and Large investments in Renewable Energy Sources, are priorities of substantial development prospect with significant benefits for Greece. Nowadays, Greece can t stand to leave the geostrategic advantages unexploited, which in the future will provide significant economic and geopolitical benefits. And in any case we must conserve the principles of transparency, protection of the public interest and the national sovereign rights. 1

2 Greece has traditionally been positioned between major energy producers in the Middle East, the Caspian Sea region, North Africa, as well as on the vital transport routes of the Aegean Sea and the South-Eastern Mediterranean. This strategic geoeconomic location of Greece marks it as a region of opportunity and as the expanding hub between East and West. The energy sector in Greece offers exceptional opportunities for investment. To find its way back to the path of economic and social development, the Greek economy and society will have to overcome skepticism, especially on large foreign investments and to embrace the opportunities they offer to the country. During the period the government of New Democracy placed great emphasis upon the pipeline diplomacy. The existing natural gas pipelines, as well as those to be constructed hold great examples of good perspective practices and routing to real development. Through those practices it is obvious that the link between East and West and in particular between the Eastern Mediterranean and Europe is a key development priority for Greece. It is already a fact that, world widely, there is a strong interest for the transportation of natural gas or oil through our territory as well as for the exploitation of possible hydrocarbon resources of our country, similar to those of Cyprus, Israel or Egypt. New Democracy strongly supports those perspectives. During its governing period the priorities were set regarding the achievement of major energy agreements. Such examples are the Burgas-Alexandroupolis pipeline or the South Stream, the Greek-Italian ITGI or the Greek-Bulgarian IGB natural gas pipelines. Pipelines which should be treated by the next government with the respective interest.. 2

3 Furthermore New Democracy achieved the demarcation of the Exclusive Economic Zone between Greece and Albania, which notoriously was finally not ratified by the Constitutional Court of the neighboring country. New Democracy while governing proved that it had the courage to mobilize and run major international agreements in the energy sector. As the leading opposition party we supported and voted the Law 4001/2011 on the liberation of the energy market, the promotion of exploration and exploitation of hydrocarbons in our country as well as on the creation of the Hellenic Hydrocarbon Resources Management S.A. (H.H.R.M. S.A.). Today, we continue to move in the same direction. The President of New Democracy, Antonis Samaras, by his own initiative, started already to boost issues concerning the oil and natural gas pipelines as well as the Exclusive Economic Zones, as a necessary condition for the securing of the national interests and for the promotion of hydrocarbons exploration in Greece. On official visits to overseas countries, a series of important meetings and discussions on specific issues were held, which resulted in favorable and promising prospects for the Greek energy market and hence for the Greek Economy. Specifically on the issue of hydrocarbon exploration and exploitation, which is the theme of this important Congress, it is for the New Democracy an undoubtedly issue of paramount importance to strengthen the competitiveness and growth in Greece. The open door invitation for granting and using authorizations for the exploration and exploitation of hydrocarbons in the areas of the Gulf of Patraikos (offshore), Katakolo (offshore) and Ιoannina (onshore) as well as the International Public Invitation for the Participation in non-exclusive seismic survey offshore Western and Southern Greece, show the way. 3

4 At the same time the interest of major international geophysical companies have shown for the Participation in non-exclusive seismic survey offshore Western and Southern Greece, proves that there are serious exploration opportunities in those areas. After all these companies have at least evaluated at first level a number of geological, old seismic data or data of other nature before expressing their interest. Driven by that, one could say that the possibilities of existence of hydrocarbon fields in those regions are remarkable. Therefore, grounded on the above, we all agree that the wider sea area west and southwest of Greece has a significant interest. But reasonably an objective observer of the marine map of the Southeastern Mediterranean could place two simple questions: 1. "Could it be that the existence of hydrocarbon fields is restricted only in the Ionian Sea? Why not explore the eastern territories as well?" 2. Why does Greece still remain uninvolved in the important developments regarding oil and natural gas exploration and exploitation in South-Eastern Mediterranean? In the frames of the above remarks the following key question is placed: " are the Exclusive Economic Zones a necessity or not?" The Exclusive Economic Zone or EEZ is an area that complements the status of the continental shelf. The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources. The rights of the coastal State over the continental shelf do not depend on occupation, effective or notional, or on any express proclamation. In the exclusive economic zone the coastal State has, among others, sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil. Countries have exclusive rights to natural resources in their marine EEZ and the right to protect rigs and other facilities operating in the EEZ. 4

5 The entire Mediterranean is now divided into regions where the continental shelf - and by extension the Exclusive Economic Zone (EEZ) - belongs to the opposite countries, based on the principle of the median line. But today the international practice shows that all countries, relying on the Convention on the Law of the Sea of 1982, progress to the declaration of the EEZ, including the continental shelf with its legal sense, and then they begin with their investigations. In this context, the geological concept of continental shelf is virtually eliminated. Greece therefore can go on, based both on the European and International Law as well, "covering" perfectly its movements in the declaration of EEZ The interest of Greece is to follow procedures similar to those of Cyprus and of other countries, to guarantee the right of research for hydrocarbons and to secure itself against any threat in the future. Thus every interested oil company can undertake researches feeling that it operates in a safe environment. Greece would have to take political decisions and declare the Exclusive Economic Zones with its maritime neighbors, expecting significant benefits from such a movement: Geopolitical benefits, related to the shielding of our national security and sovereignty, as well as the upgrading of the prestige and of the international position of Greece in the wider territory Developmental benefits, associated with the creation of another strong pillar on which our country can rest, through the attraction of significant investments in the sector of hydrocarbons Financial benefits, which will be secured through deals with the candidate investors and which will primarily concern fixed future incomes for the strengthening of the Gross National Product of the country and in general of our National Economy 5

6 Social benefits, through a promising prospect for Greece and its citizens, which is already emitting optimistic messages that reinforce the feeling and the courage of the Greek society. The prospect is in front of us but we must believe and follow it as a country. Hope and trust in international law are good consultants in this effort. Skepticism and inertia bad. It's up to us, politicians, diplomats, scientists and institutions to activate ourselves positively and focus our attention seriously on strengthening the EEZ diplomacy, hydrocarbons and energy pipelines. It's up to us as a country, as an economy and as a society to seize the opportunities for effective development of a Greece that gazes optimistically its European future. 6