The global economy, international geopolitics as well as intra-national security have hinged upon oil production capacity and petrol markets so thoroughly that this inseparability of oil economics and geopolitics makes them in fact two sides of a coin. But apart from many examples to illustrate this symbiotic relationship form, new emerging patterns of geopolitics create conditions for mutually beneficial synergies that have not yet been sufficiently realized. Let’s take for example the energy ties between two orthodox Balkan countries, Greece and Montenegro, with a long history of traditionally friendly connections. It is important to notice that 2021 marks the 140th Anniversary of Establishment of Diplomatic Relations between these two (1881-2021). As well Greece is a significant trading partner of Montenegro while Hellenic Petroleum, which bought the state oil company Jugopetrol is one of the most important Greek investments in Montenegro. Moreover, taking into consideration the latest developments in Eastern Mediterranean and especially Greece's status concerning the recently signed memorandum on the expansion of Greek territorial waters in the Ionian sea, in addition to the Turkish dimension, it should be briefly examined what is the importance of new Greek announcement and would it possibly mean the implementation of new energy strategies related to Montenegro`s energy sources.

Gas supply prospects and energy security in SE Europe

With the change of year, three events brought upside down the gas market in Southeast Europe. On New Year's Eve, Serbian President Aleksandar Vucic gave the green light to supply his country with Russian gas through Bulgaria and the Balkan Stream pipeline, a branch of the Turkish Stream. Although Washington has been urging Serbia to diversify its energy supplies and use American liquid gas shipments (those tend to be more expensive), defying U.S. calls to reduce its dependency on Russian energy supplies, Serbia which has so far received the Russian gas via Hungary and Ukraine, has officially launched a new gas link that will bring additional Russian gas to the Balkan country via Bulgaria and Turkey. A few hours earlier, gas began to be supplied to Bulgaria from Azerbaijan via the new Adriatic Pipeline TAP. Bulgarian Prime Minister Boris Borisov even spoke about the end of the Russian monopoly on the Bulgarian market. The third event was the launch of the new floating LNG gas terminal near the Croatian island of Krk. US LPG arrived there by tanker and was then routed to the Croatian network, which is connected to the European one. With this move, Croatia not only almost eliminates its dependence on Russian gas, but also becomes a major exporter of LNG to Hungary and Ukraine. And as if all these were not enough, due to the so-called Southern Gas Corridor, it was Gazprom who heralds significant competition in both Greek and Italian market.

As for Greece the importance of international energy policy issues in the 21st century is considered a high priority of the country. Through the establishment of international energy relations, Greece's energy policy pursues maximization of energy security, the competitiveness of prices and diversification of sources. In this context, Greece intensively promotes energy cooperation with the countries of the Eastern Mediterranean (Israel, Egypt and other countries). Furthermore, at a multilateral level, the country is actively engaged in several schemes (European Union, Energy Union, East Mediterranean Gas Forum-EMGF, International Energy Agency - IEA, etc.), as well in the region of South-Eastern Europe and the Western Balkans. Greece wishes to act as a gateway and an energy transit hub from east to west and from south to north. Thus, it is of great importance that a part of the so-called Southern Corridor, a major component of the EU's policy for energy security and diversification of sources crosses it. TAP pipeline, being an E.U. PCI project (Project of Common Interest) and the last part of the Southern Gas Corridor, is considered as one of the ten most important energy projects being implemented worldwide. The construction of the Greek section of TAP is completed, upgrading its role as a transport hub from the Caspian fields to Europe's markets and creates new opportunities for Southeast Europe's emerging energy markets to meet their energy challenges through “vertical” interconnectors. In addition, The Ionian Adriatic Pipeline (IAP) project is based on the idea to connect the existing Croatian gas transmission system, via Montenegro and Albania with the TAP system or a similar project. The implementation of the entire Ionian Adriatic Pipeline project enables the opening of the new energy corridor for the SEE region. The IAP will have a bidirectional gas flow possibility i.e., it will be able to provide a natural gas supply of SEE from other sources, one of them the future LNG solution on the island of Krk. Gasification of Albania, Montenegro, the southern part of Croatia and Bosnia and Herzegovina, the security of supply and diversification of supply, market integration and competition are considered as the main benefits of IAP.

Montenegro oil findings

An additional pillar of great importance for Greece’s energy policy and diplomacy is the exploration and exploitation of indigenous reserves of hydrocarbons, a sector correlated to both energy security and economic development issues. The majority of Greece’s neo-reserves area concentrated east of the island of Crete. Since there are approximately 6 trillion m3 of natural gas and 1,7 billion barrels of oil, their sustainability is estimated at 100 years. However, the Ionian and Aegean Seas have reserves of energy resources that can cover further needs as an exportable product. Already during March 2017 Greek oil and gas group, Energean has signed a concession contract with Montenegro for the exploration of two offshore oil and gas blocks in the Adriatic Sea. One of the companies involved in the black gold rush in the Ionian sea, Energean, as a fast-growing oil and gas company focused on the Eastern Mediterranean and currently active in Greece and Israel, is quickly expanding into new European and North African sites. The total investment in the 4219-26 and 4218-30 blocks over an exploration period of seven years was estimated to 17.9 million euro, including the funding of a new 3D seismic survey, geophysical and geological studies, and the drilling of one well. During October same year two blocks, offshore Montenegro was estimated to have 1.8 trillion cubic feet of recoverable natural gas reserves, suggesting that Montenegro "sits in the 'sweet spot' of untapped potential in the eastern Adriatic" Montenegro awarded Energean a 30-year oil and gas exploration license. Moreover, in the Adriatic, discoveries have been made in Italy and Albania as well. Both regions were "promising" and Energean was committed to exploring and developing the area's oil and gas potential, claiming in addition that "tourism and oil production can coexist harmoniously". Finally, in February 2019, the Greek Company started the seismic investigations having assigned them to the Norwegian PGS, which brought the special boat "Ramform Titan". The round of research in Montenegro has attracted the interest of big players. In the neighboring areas of Energean Oil & Gas, two large energy giants the ENI - Novatek consortium have four offshore plots for which they have recently completed seismic surveys. Same year July according to Roberto Karahannas, a director at Hellenic Petroleum it was estimated that Montenegro may become a significant exporter of crude oil if offshore exploration works yield positive results. During October 2019 the Hydrocarbons Administration announcement followed suggesting that Montenegro started the first quest for oil and natural gas while the findings of the first research boreholes would show whether there are reserves of oil and gas and if the potential reserves would be appropriate for commercial use. However, the dynamics of oil and gas exploration in the Montenegrin maritime zone depend nowadays on the evolution of the coronavirus situation in the world and in the country. The Administration said it is difficult to answer the question of whether the investigation would be suspended until further notice, due to the length of emergency measures due to the Covid-19 pandemic.

Geostrategic importance of the Ionian Sea

The Ionian is the Vital Sea Area of the Strait of Otranto, from which there is the possibility of control of the Sicily-Tunis passage. From the Ionian, even with limited means, it is possible, due to the focus of the position, to claim the domination, firstly, of the Straits of Otranto and secondly, of the Sicilian-Tunisian passage. The geostrategic value of Corfu, in particular, was always invaluable. In the contemporary era, from the point of view of the Anglo-Saxon Maritime Forces, the maritime zone around Corfu was an excellent base for any naval action in the Mediterranean but the vital importance of the island is that it dominates the Adriatic. Furthermore, it is of the utmost importance that the Ionian sea is rich in deposits hydrocarbons and can, therefore, add invaluable geostrategic value to Greece, if, as long as and when there is a Political Will to exploit them. In combination with the energy pipelines starting or passing through the Maritime and/or Land areas of Cyprus, Israel and Russia, this Greek sea can become a huge geostrategic and geo-economic energy artery of the 21st century, consequently upgrading the geostrategic position of Greece.

At the beginning of the New Year Greek Parliament voted in favor of the bill of the Ministry of Foreign Affairs for the extension of the country's territorial waters to 12 nautical miles in the Ionian Sea. In light of the estimates that if Athens implements this expansion, Turkey could see it as a cause of war, the remarks of an expert from the Albanian Ministry of Foreign Affairs during August 2020, who emphasizes that the move of Greece does not affect Albania and is not something new for Tirana, were especially interesting. In addition to important agreements for the delimitation of the sea areas in the Mediterranean basin, Greece - Italy for the EEZ and Greece - Egypt for the continental shelf, the Greek Prime Minister Mitsotakis stated that in the Greece the decree would be announced for the extension of Greek territorial waters from 6 to 12 miles in the Ionian Sea. Of course, all those interested in developments in this area were interested in the background of the Greek decision and its possible far-reaching consequences.

In search of a new energy direction?

Whilst a number of major oil and gas companies left the area during the period of sustained low oil prices, Energean remained committed to pursuing the development of the region and is now extremely well placed to take advantage of this commitment and focus. In February 2020 despite of the upcoming crisis, this Greek oil enterprise has secured its entry into Block 2 of the Ionian Sea by buying out the stake of French company Total, which had been seeking to disengage from the region for months. Total had a 50 percent stake in the consortium to survey Block 2, while Hellenic Petroleum and Edison each hold 25 percent. Sources say Total first offered its two partners the stake but that they were not interested. Energean agreed to buy it because it appreciates the synergies this particular block presents with the other areas it has undertaken in Greece (Ioannina), as well as similar ones in Montenegro and the concessions of Edison in Italy.

In should be added as well that in countries where problems in the quality and distribution of gasoline and diesel dominate, the oil trading company of the Motor Oil group has decided to enter with an investment plan. As it is known, when Motor Oil acquired Shell Hellas in 2010, it also obtained the license to use the multinational brands. He then renamed Shell Hellas Coral. About four years ago, the latter set up companies in the countries of Northern Macedonia, Albania, Montenegro and Serbia. The starting point is Croatia, a country with favorable economic growth estimates. Tourism in the country has been moving dynamically for the last two years. Something that brings turnover to fuel companies. He plans to make similar moves for Albania and Montenegro, where he also owns the rights to use the Shell brand.

Moreover, in the context of the energy transition in Europe, against the background of climate change, private business initiatives are emerging in areas such as alternative fuels. The Blue Grid is one of them, with a presence inside and outside the borders. Based in Athens, it is the first Greek company operating in the wider region of SE Europe as a supplier of LNG (liquefied natural gas) for consumers outside the pipeline network, implementing the first systematic supply chain of a large industrial consumer. In particular, this activity begins with the supply of LNG to a large steel plant in Montenegro, allowing the latter to abandon petroleum fuels and benefit from the economic, operational and environmental benefits of natural gas, although this industry does not have connection to a local distribution network. The supply is made through special tankers, which transport the LNG by road from European LNG import terminals to the final consumer. From 2021, the existing LNG terminal of Revythousa will allow the transshipment of LNG to tankers, a fact that is expected to be the trigger for the development of such supply chains in Greece. Therefore, by switching to LNG, consumers are opening the door to a future where their energy needs will be met by purely renewable energy sources. With the strategic goal of combining energy cost savings and emission reductions, energy transition actions in Europe offer innovation and entrepreneurship in areas that have meaning and prospects for Greek companies as well.

It is a fact that major Greek firms are turning to renewables as the energy transition gains traction. Assuming, however, that the aforementioned delimitations agreement with Italy and Egypt could be described as two links of peace and cooperation but also a model of security and stability in an area that some threaten to turn into a minefield, the question arising is could the expansion of territorial waters (as a permanent argument of every previous Greek government) could be described inter alia as the expression of intention to find new energy direction, to re-actualize some lingering issues and transform them into a tangible result in current reality, thus proving that the Mediterranean could become a sea of peace and prosperity.