Cyprus agrees gas exploration deals
07 Mar 2017 - 14:41
Nicosia: US energy giant ExxonMobil, Qatar Petroleum, Italy's ENI and France's Total have successfully bid for rights to explore for oil and gas off the coast of Cyprus, officials said Tuesday.
The contracts, part of the Mediterranean island's third licensing round, will be approved by the cabinet on March 17, Cyprus trade minister George Lakkotrypis told reporters.
ENI and Total jointly negotiated a licence for a block off the island's south coast while ENI secured another on its own. ExxonMobil and Qatar Petroleum successfully bid for a third.
"This is a very important development for both the Cypriot Exclusive Economic Zone and the eastern Mediterranean in general," said Lakkotrypis.
"It reinforces the prospect for hydrocarbons in the area," he added. "You will find that companies are quite optimistic as to the prospects for the eastern Mediterranean, and more specifically the Cypriot EEZ."
Some of the firms could begin exploratory drilling this year, Lakkotrypis said.
A huge gas find by ENI in Egypt's offshore Zohr field in 2015 has raised hopes of more untapped energy in the waters between Cyprus and North Africa.
US firm Noble Energy made the first discovery off the southeast coast of Cyprus in 2011 in the Aphrodite field, which is estimated to contain around 127.4 billion cubic metres (4.54 trillion cubic feet) of gas.
Israeli firms Delek and Avner have a 30-percent stake in the venture. Noble handed over a 35-percent share to Britain's BG Group, now owned by Royal Dutch Shell.
Italian-South Korean venture ENI-Kogas has so far failed to discover any exploitable gas reserves in deep-sea drilling in its blocks off the island.
Cyprus needs to find more gas reserves to make a planned onshore terminal financially viable as it seeks to become a regional energy player.
It had planned to build a liquefied natural gas plant that would allow exports by ship to Asia and Europe, but the reserves confirmed so far are insufficient to make that feasible.
Cyprus and energy-starved Egypt are looking into the possibility of transferring gas from the Aphrodite field to Egypt via an undersea pipeline. Cyprus hopes to begin exporting gas, and maybe oil, by 2022.