Greece Signs Crete Gas Lease with ExxonMobil, Total

Greece on Thursday signed a lease with ExxonMobil and Total for the search and exploration of hydrocarbons off the island of Crete, joining an increasingly heated energy race in the Mediterranean.

"Today Greece... begins implementing a plan aiming to turn it into an energy producer," Prime Minister Alexis Tsipras said at the signing ceremony.

The Franco-American consortium was the sole bidder in an international tender launched two years ago concerning two offshore blocs to the west and south of the island.

ExxonMobil and Total each hold a 40-percent stake in the project, with Greece's HELPE controlling the remaining 20 percent.

Total is also a participant in Greek exploration activities in the Ionian Sea.

Confirmation of possible reservoirs will require two to four years, Tsipras said.

The duration of the lease is eight years with an option to extend. It remains to be approved by Greece's parliament.

"We’ve been talking about this project for a long time, so it is enormously heartening that we are seeing today the signing of this agreement," said U.S. ambassador to Greece Geoffrey Pyatt.

"Just as large natural gas reservoirs have been discovered at Zohr, Calypso, and Aphrodite in the eastern Mediterranean, we believe that offshore exploration here in Greece holds great potential," Pyatt said.

The discovery of huge gas reserves in the eastern Mediterranean has fuelled a race to tap underwater resources.

It has already triggered a dispute between Turkey and EU member and close Greek ally Cyprus, which has also signed exploration agreements with ExxonMobil, Total and Italy's ENI.

The EU last week threatened sanctions after Turkey sent two ships to search for hydrocarbons off the coast of Cyprus, an area which Ankara says is within its own continental shelf, or under the control of the northern part of Cyprus that is under Turkish military control.

Turkey has called on the internationally recognised Cyprus government to share the gas reserves with the northern part of the island, formed after Ankara's troops in 1974 occupied the area in response to a coup sponsored by the Greek military junta.