Two blocks offshore Montenegro awarded to Greece’s Energean Oil & Gas are estimated to have 1.8 trillion cubic feet (Tcf) of recoverable natural gas reserves, Energean said Oct. 19, citing an independent audit.

The findings suggest that Montenegro “sits in the ‘sweet spot’ of untapped potential in the eastern Adriatic,” Energean Chief Executive Mathios Rigas said in a statement.

Montenegro awarded Energean a 30-year oil and gas exploration license in March for the two blocks covering 338 sq km in the Adriatic Sea. The Balkan country produces no oil, but initial data has indicated it could have enough resources to cover its oil and gas needs.

The findings are part of the first three-year exploration phase, estimated to cost $5 million, to scope the potential of the currently underexplored offshore Montenegro area, Energean said. It includes a 3-D seismic survey and geological and geophysical studies.

Energean is Greece’s only oil producer with an average production of 3,500 barrels per day last year. Its biggest assets are the Karish and Tanin fields, located in deep waters about 100 km offshore Israel. Combined, the fields have prospective resources of 2.4 Tcf of gas according to an independent audit, Rigas told Reuters. Production there is expected to begin in 2020, and Energean plans to lease its own FPSO vessel and build a separate pipeline to Israel at a cost of up to $1.5 billion.

Israel, and to a lesser extent Cyprus, are thought to be sitting on vast quantities of natural gas wealth given the significant finds reported in the past decade.

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, Rigas told Reuters.

“There have been several natural gas discoveries in the region and a number of governments are keen to further explore their countries' hydrocarbon potential,” he said.

In Greece, Energean produces oil offshore in the northeast and is exploring in the west. It recently expressed interest in a newly-tendered block in the Ionian Sea.

In March, Spain’s Repsol entered a so-called farm-in agreement with Energean. Repsol would operate Energean's Ioannina and Aitoloakarnania onshore blocks in western Greece in return for a 60 percent stake.

“Both blocks are priority exploration targets for Energean and strategically important for the Greek oil and gas sector,” Rigas said.

He said Energean’s knowledge of the region’s geology and Repsol’s expertise “increase the chances of discovering hydrocarbon fields in this promising area.”