articles | 24 June 2016

Bids expected for third gas round in July 2016

The government expects to have the bids for the third oil and gas offshore exploration round by July 22, 2016 DIKO MP Angelos Votsis said recently.

Votsis, who chairs the House commerce committee, was speaking shortly after a meeting of MPs with Energy Minister Giorgos Lakkotrypis.

The acreage opened up for bidding in the third licensing round are Blocks 6, 8 and 10. July 22 is the closing date for the bids.

According to Votsis, the whole procedure is on track.

“We hope – and the ministry as well is cautiously optimistic – that we shall have a number of interesting proposals for the blocks in question.”

The MP was asked about reports that an Israeli-controlled company might scupper the third licensing round, and in particular the bidding process for Block 8.

“The position of our government is that we are proceeding normally, with Blocks 6 and 8 – the contentious Block – and Block 10,” he said, evidently having been briefed by the Energy Minister, who did not comment on the matter.

Votsis was referring to CO Cyprus Opportunity Energy Plc Co Ltd, which has mounted a legal challenge to the Republic of Cyprus’ decision not to grant it exploration rights in Block 8 during the second licensing round.

On May 11, 2012, a consortium comprising Cyprus Opportunity and AGR Energy AS submitted applications for the second licensing round for Block 8.

The company’s website states: “On May 26 2013, the second licensing round ended and Block 8 was not granted. According to The Company, the second licensing round has not been completed with respect to Block 8. On July 17 2013, the Consortium submitted a recourse to the Cypriot Supreme Court.”

Cyprus Opportunity is listed on the Cyprus stock exchange and has a market capitalisation of €8.514 million.

On its website, it cites Block 8 as a company ‘asset’.

According to daily Politis, the company claims that because its elimination from the second licensing round for Block 8 is disputed, the same block cannot be put up for auction in the current third round until the matter is resolved legally.

While its Supreme Court appeal is pending, Cyprus Opportunity reportedly has taken, or plans to take, recourse to the Court of Justice of the European Union (CJEU).

There, it will be arguing among others that the Republic of Cyprus is in contravention of EU Regulation (EC) 100/2013 establishing a European Maritime Safety Agency.

Politis also reports that Cyprus Opportunity has written to companies now expressing an interest in the third licensing round, advising them that it is claiming an interest on Block 8 with regard to the previous round.

To date, the company has not secured an injunction affecting the third licensing round.

The daily further writes that, based on an advisory opinion from the Attorney-general’s office, the government is at the moment not concerned about Cyprus’ Opportunity’s legal challenge. In addition, the government has relayed assurances to the companies interested in the current licensing round.

Meantime there has been no word from the government concerning the fate of Block 12, in which lies the only confirmed gas find in Cypriot waters – the Aphrodite prospect, holding an estimated 4.5 trillion cubic feet.

The production-sharing agreement (PSA) betweenthe government and the Block 12 partners – Noble Energy, Delek, Avner and Shell (British Gas) – expired on May 23 2016.

Unless a development plan for Aphrodite were sanctioned by that date, the PSA would lapse, although the government had the option of extending the agreement for a few months.

On this point, DIKO’s Votsis said on Tuesday that the Energy Minister would be briefing MPs during a closed session of the House commerce committee.

Source: Cyprus Mail

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