articles | 25 October 2015

Cyprus eyes 3rd oil and gas round

Energy companies are showing keen interest over a third hydrocarbon exploration licensing round inside Cyprus Exclusive Economic Zone (EEZ), Energy Minister Giorgos Lakkotrypis said recently.

“What I can tell you is that those who showed more interest are the ones who have the geological data of our area and they can better understand what the Zohr discovery means for them,” the minister told reporters.

Zohr is the name of an offshore field in Egypt where large natural gas reserves were discovered recently by Italy’s ENI.

“We are certain, and it is something we are looking into, that other companies that are not involved in our EEZ will also show interest and will request the geological data,” Lakkotrypis added.

The minister did not give any timeframes regarding the opening of a third licensing round.

“There are some things, which we are studying at the moment,” he said.

The minister said it was important to assess what the Zohr discovery meant for Cyprus commercially, especially in relation with the island’s efforts to sell gas to Egypt.

To this end, he said, officials had a series of meetings in Luxembourg, Houston, and Cairo.

“In these meetings we confirmed the geological prospects, but also the continuous interest of Egyptian companies for Cypriot natural gas,” he said.

Meanwhile, Israel’s Delek Group has announced that its gas subsidiaries have postponed the schedule for an additional test drilling well in block 12 from October 23 to May 23, 2016.

The date coincides with the expiry of the company’s license.

According to a news release, dated October 22, “as of the date of this report, together with the government of Cyprus, the Block 12 partners are examining options for amending the Development plan as required under the Production Sharing Contract and conducting discussions with regard to the proposed outline for the development plan of the Aphrodite reservoir.”

On Friday, Lakkotrypis said discussions with the block 12 consortium have intensified in a bid to reach a mutually acceptable plan for development and production.

The block 12 Aphrodite gas reservoir was declared commercial earlier this year.

In its full-year 2014 results, released in March, Delek characterised Aphrodite, located in the block 12 license, as a 4.5 trillion cubic feet (contingent and prospective) natural gas discovery.

At the time, Delek announced on behalf of its partners that the drafted, preliminary plan for Aphrodite included the establishment of an FPSO (floating production storage and offloading) vessel.

In August, operator Noble Energy announced that it was considering a plan that included gas exports to Egypt.

Noble operates the block with a 70% interest, in partnership with Delek subsidiaries Avner Oil Exploration and Delek Drilling (15% each).

Source: Cyprus Mail

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