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New Oil Discovery Offshore of Greece, Game Changer?
So now they want to destroy the Mediterranean, the Aegean, and the Ionian Seas by Drilling….a way of helping Greece exit the Euro while immediately giving strength to the Drachma. Lots of angles in this move.
The U.S. Looks To Exploit The Greek Re-Default
August 6, 2012 | 3 comments | includes: EIS, GREK, NBL, RSX, SPY, TUR
A geopolitical drama driven by newly discovered oil and bad debt is unfolding around the eastern Mediterranean, and it may be a game changer for Greece. Preliminary estimates indicate there are 22 billion barrels of oil offshore of Western Greece below the Ionian Sea and some 4 billion barrels of oil below the Northern Aegean Sea, according to Global Research.
Former International Monetary Fund economist and Treasury assistant secretary Charles Collyns was in Athens and Rome the last week of July, along with Treasury Secretary Timmy Geithner, as Greece’s global lenders – the IMF, the European Union and the European Central Bank – prepared for a new audit of Greece to see if its €130 billion bailout had any positive effect (see proposed reforms). The findings, due in late August, will determine whether Greece will receive fresh loans of €31.5 billion by September, according to Yahoo! news.
August 20, Greece faces another rollover of €3.2 billion of its existing debt. The expectation is this will be just one more shuffled deck chair on the Titanic as it borrows from one member the Troika (EFSF) to pay another (ECB). I am not so sure.
The assumption is that this status quo, Nash Equilibrium, mutually assured destruction model will continue indefinitely. But Geithner and his lieutenant Collyns have been actively dialoging with the Greeks. The public message seems to be one of promises to do everything to assist Greece “if necessary” should that country return to the drachma and, by extension, exit the EU, called the Grexit.
A Grexit would offer the U.S. an opportunity to step into the geopolitical breach, and be a player in new oil and minerals discoveries off of Greek and Israeli shores. Turkey has previously stated it would consider it an act of war if Greece drilled further into the Aegean. Clearly, Greece needs backing and support, the kind that the U.S. could provide. Right after Secretary of State Clinton visited Greece to lobby on energy in 2011, the Greek government created a new government agency to run tenders for oil and gas surveys and drilling bids.
To resolve matters with Turkey, there is a proposal by both Clintons’ operative Richard Morningstar to form an oil revenues deal offering Greece 20%, Turkey 20% and the U.S.-backed Noble Energy (NBL) of Houston (the company drilling in Greek and Israeli offshore waters) the lion’s share of 60%.
This has upped the prospect for a geopolitical gambit by the U.S. that has several objectives:
1. To gain influence on Aegean Sea as well the Levantine oil and gas assets, and to establish a Greek Corridor of influence between Cyprus, Israel and Greece. The area off Israel and Cyprus has been the site of new oil and gas discoveries. Cyprus, too, is an insolvent EU basket case. This article from Oil Price.com discusses the “pipeline battle” between Russian and U.S. interests.
With recent confirmation of oil in the Greek Aegean and off Israel, the U.S. has stepped up its game. The strategy is to offer Greece and Cyprus carrots. After all, it’s the European Troika that is the hardball creditor, not the U.S. In fact, by offering Greece “almost unqualified support in the event of a return to the drachma,” the U.S. is betting on the strong likelihood of Greece becoming formally insolvent before any more bailout monies are available from Berlin-am-Brussels.
This move really bothers me on many levels, but first and foremost is the drilling for oil and possibly ruining the seas mentioned above. We saw what happened in the Gulf. Plus the geopolitical finances that would occur. Yes it would help Greece and possibly Italy’s financial problems along with helping Israel and Turkey, but at what cost? And what other diplomatic problems would happen?
Image credit [top]: Boom showing signs of oil at Breton Island NWR By USFWS/Greg Thompson