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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.

2. The Greek Corridor can be used to transport aid to the Theatre of Operations in the Middle East. This vital corridor cannot and should not be allowed to be checked by Turkey, as it will then be vulnerable to any intervention. PPC Quantum Energy SA formally announced the launch of a 2,000-megawatt undersea electricity cable to link up the electricity grids of Israel, Cyprus and Greece. Also, Israel has a deal with Greek Cyprus and Greece to build a gas pipeline through Cypriot waters to Greece, leaving Turkey out. The U.S. enters the equation because of the offshore Levantine discoveries in the area made by Noble Energy, for which Bill Clinton is a key lobbyist. Security for Israel's new resources will also be paramount.

IMF and EU government officials, some of them German, are pressuring Greece to sell its valuable ports and public energy companies, such as the country's oil companies, in order to reduce the country's debt. The assets would only bring the country perhaps €50 billion at best. Plans call for the Greek state-owned natural gas company, DEPA, to privatize 65% of its shares to reduce debt. The Russian firm Gazprom has shown an interest, something the U.S. strongly opposes. Buyers would likely come from outside the country, as few Greek companies are in a position, in the current crisis, to take it.

The US has other energy and security plans for Greece and Cyprus and seeing those countries crippled by overwhelming debt, reduced to begging from the EU, and doing fire sales to Europeans and Russians does fit into the plan. Therefore, I speculate that a re-default and/or restructuring will happen soon, perhaps even on August 20, with the final hit falling on the EU bag holders. A Grexit is also in the cards. For background of what a re-default means to Europe, read my article Official Sector Losses in a Greek Re-default.

This peek behind the scenes into the developing geopolitics of oil in the region, though not all encompassing, should be kept in mind when wagering on the timing of Greece's re-default.

Source: The U.S. Looks To Exploit The Greek Re-Default