articles | 19 August 2015

Cabinet authorises new negotiations with ENI-KOGAS

Cabinet has authorised the Energy Minister to negotiate a two-year extension of Italian and South Korean consortium ENI-KOGAS’ licence to explore for hydrocarbons on Cyprus’ exclusive economic zone (EEZ).

The company had asked for an extension a few months ago and the state had been trying to find the proper legal framework to satisfy the request.

“The legal framework has been found and we will start negotiations immediately with the company on the substance of the changes that need to be made so that it continues it exploratory programme,” Energy Minister Giorgos Lakkotrypis said after a cabinet meeting held in the presidential retreat in Troodos.

ENI-KOGAS wants two years to re-evaluate geological model after it twice failed to find exploitable hydrocarbons in Block 9 of Cyprus’s exclusive economic zone.

The company has asked for an extension until February 2018 to reassess the energy potential in the East Levant where they operate.

“At the moment we are giving them time so that they redefine their targets,” Lakkotrypis said.

After the first failed drilling at the Onasagoras field, the other targets the company had identified were eastwards, farther away from the natural gas sources created millions of years ago. And that was why the company went ahead with the second exploratory drill in Amathousa, which was closer to the sources.

“Unfortunately that failed also and they have asked for more time to be able to redefine the geological model on which they based their initial estimates,” the minister said.

The company will study the data it has collected to see where the previous model had failed, he added.

But their plans remained the same and they have asked for time to define the new targets.

Lakkotrypis reiterated that there were no political motives behind the decision.

“There are geological criteria … and based on our international consultants, this request is justified.”

Opposition parties recently accused the government of postponing exploration for the sake of the reunification talks.

ENI-KOGAS’ drill ship Saipem 10000 had had left in April just prior to the election of Turkish Cypriot leader Mustafa Akinci. At the same time the Turkish seismic exploration vessel Barbaros, which had been surveying in Cyprus’ EEZ s since late last year causing President NicosAnastasiades to pull out of the talks with then Turkish Cypriot leader Dervis Eroglu, also left Famagusta.

Anastasiades had said he would not return to the table unless the Barbaros left, while Turkey demanded Cyprus stop drilling. The subsequent election of Akinci combined with the departure of the Saipem to Italy for maintenance, and the return of the Barbaros to Turkey then opened the way for talks to resume, while both sides appeared not to have backed down due to the ‘window of opportunity’ that had presented itself.

Recently former Turkish Cypriot negotiator Kudret Ozersay appeared to let it slip that the Greek Cypriot side had stalled hydrocarbons exploration for the sake of resuming the Cyprus talks, which the government denied was the case.

Source: Cyprus Mail

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