Dec 1, 2025
Europe's resurgence in drilling poses a challenge to US energy commitments.
European nations are easing their stringent opposition to new oil and gas drilling, marking a shift from years of climate-oriented resistance to fossil fuels. This change arises as governments strive to lessen their significant dependence on expensive energy imports, including from the U.S.
The policy shift in Greece, Italy, and Britain reflects a new reality shaped by the energy price surge in 2022. There is now a recognition that fossil fuels, particularly natural gas, will continue to be an essential part of the energy landscape for many years, even as the region also enhances its renewable energy capacity to reduce greenhouse gas emissions.
According to Eurostat, the European Union relies on gas imports for 85% of its consumption, a drop from 50% domestic production in the 1990s. Following Russia's invasion of Ukraine in 2022, Europe had to replace its reliance on Russian oil and gas at a significant cost, now turning to liquefied natural gas (LNG) and crude imports, mainly from the U.S., which currently accounts for 16.5% of the EU's total gas consumption.
Establishing new domestic production would enable Europe to lessen its dependence on gas imports and possibly lower energy costs.
**GREECE SHIFTS GEARS ON GAS**
In Greece, the change is evident as it issued its first offshore oil and gas exploration license in over 40 years to a consortium including Exxon Mobil, Energean, and Helleniq Energy. The Block 2 license in the Ionian Sea is estimated to hold up to 200 billion cubic meters of gas, although the true scale and development costs will only be known after significant drilling, expected to start in late 2026 or early 2027.
Mathios Rigas, the CEO of Energean, noted the significant policy shift in Greece, moving from a stance against hydrocarbons in favor of renewables to recognizing that gas exploration is vital for energy security. Should the exploration be commercially viable, production will not commence before 2030. Greece, which consumes about 6 bcm of gas annually, aims to develop this gas for export to other European markets. Additionally, Greece has granted exploration rights to Chevron and Helleniq in blocks south of the Peloponnese peninsula.
ITALY, BRITAIN CHANGE TACK
In Italy, the government led by Giorgia Meloni is also contemplating the revival of offshore oil and gas exploration, which had been halted in 2019. Shell, the leading producer in the country, recently expressed its willingness to invest more in upstream production.
Similarly, Britain has relaxed its strict ban on new exploration in the North Sea, allowing companies to expand existing production. The government is anticipated to approve two major new fields in the forthcoming months.
Earlier this year, a significant oil discovery in Poland reignited interest in the country's offshore opportunities, while in Norway, Equinor plans to drill 250 exploration wells over the next decade to maintain production.
However, some countries are resisting this trend. Denmark banned all new exploration in 2020, although limited activity is permitted and aims to cease North Sea production by 2050. The Netherlands also banned new onshore fields in 2023, but allows offshore exploration.
THE U.S. CONUNDRUM
The administration of U.S. President Donald Trump encouraged Europe to boost its fossil fuel production, criticizing Britain for limiting oil and gas operations in the North Sea. U.S. Energy Secretary Chris Wright, present at the signing of the Block 2 award in Athens, emphasized that developing the field would help Europe reduce its reliance on Russian energy.
Increasing Europe's domestic production would also diminish its dependence on LNG imports, including from the U.S. This push for energy security seems to contradict the EU's commitment under a trade agreement made in July to significantly increase U.S. fuel purchases over the next three years to $750 billion, a target that seems unrealistic.
Nonetheless, the resurgence of oil and gas operations in Europe does not fundamentally alter the region's long-term climate goals, nor will it significantly boost domestic production. Both the EU and Britain are working toward carbon neutrality by 2050 by expanding renewable energy and phasing out fossil fuels, which account for three-quarters of carbon emissions.
The policy shift in Greece, Italy, and Britain reflects a new reality shaped by the energy price surge in 2022. There is now a recognition that fossil fuels, particularly natural gas, will continue to be an essential part of the energy landscape for many years, even as the region also enhances its renewable energy capacity to reduce greenhouse gas emissions.
According to Eurostat, the European Union relies on gas imports for 85% of its consumption, a drop from 50% domestic production in the 1990s. Following Russia's invasion of Ukraine in 2022, Europe had to replace its reliance on Russian oil and gas at a significant cost, now turning to liquefied natural gas (LNG) and crude imports, mainly from the U.S., which currently accounts for 16.5% of the EU's total gas consumption.
Establishing new domestic production would enable Europe to lessen its dependence on gas imports and possibly lower energy costs.
**GREECE SHIFTS GEARS ON GAS**
In Greece, the change is evident as it issued its first offshore oil and gas exploration license in over 40 years to a consortium including Exxon Mobil, Energean, and Helleniq Energy. The Block 2 license in the Ionian Sea is estimated to hold up to 200 billion cubic meters of gas, although the true scale and development costs will only be known after significant drilling, expected to start in late 2026 or early 2027.
Mathios Rigas, the CEO of Energean, noted the significant policy shift in Greece, moving from a stance against hydrocarbons in favor of renewables to recognizing that gas exploration is vital for energy security. Should the exploration be commercially viable, production will not commence before 2030. Greece, which consumes about 6 bcm of gas annually, aims to develop this gas for export to other European markets. Additionally, Greece has granted exploration rights to Chevron and Helleniq in blocks south of the Peloponnese peninsula.
ITALY, BRITAIN CHANGE TACK
In Italy, the government led by Giorgia Meloni is also contemplating the revival of offshore oil and gas exploration, which had been halted in 2019. Shell, the leading producer in the country, recently expressed its willingness to invest more in upstream production.
Similarly, Britain has relaxed its strict ban on new exploration in the North Sea, allowing companies to expand existing production. The government is anticipated to approve two major new fields in the forthcoming months.
Earlier this year, a significant oil discovery in Poland reignited interest in the country's offshore opportunities, while in Norway, Equinor plans to drill 250 exploration wells over the next decade to maintain production.
However, some countries are resisting this trend. Denmark banned all new exploration in 2020, although limited activity is permitted and aims to cease North Sea production by 2050. The Netherlands also banned new onshore fields in 2023, but allows offshore exploration.
THE U.S. CONUNDRUM
The administration of U.S. President Donald Trump encouraged Europe to boost its fossil fuel production, criticizing Britain for limiting oil and gas operations in the North Sea. U.S. Energy Secretary Chris Wright, present at the signing of the Block 2 award in Athens, emphasized that developing the field would help Europe reduce its reliance on Russian energy.
Increasing Europe's domestic production would also diminish its dependence on LNG imports, including from the U.S. This push for energy security seems to contradict the EU's commitment under a trade agreement made in July to significantly increase U.S. fuel purchases over the next three years to $750 billion, a target that seems unrealistic.
Nonetheless, the resurgence of oil and gas operations in Europe does not fundamentally alter the region's long-term climate goals, nor will it significantly boost domestic production. Both the EU and Britain are working toward carbon neutrality by 2050 by expanding renewable energy and phasing out fossil fuels, which account for three-quarters of carbon emissions.