articles | 01 November 2017

Cyprus Hydrocarbon Company optimistic on Cyprus’ energy prospects

The General Manager of the Cyprus Hydrocarbon Company (CHC), Panos Kelamis, appears optimistic about Cyprus’ energy prospects, pointing out at the same time that the situation in the oil and gas industry is dynamic which calls for patience and perseverance.

In an interview with CNA, Kelamis referred to block 10 of Cyprus’ Exclusive Economic Zone (EEA) which has attracted great interest among major oil and gas companies that participated in Cyprus’ third licensing round and in which ExxonMobil plans drilling in 2018.

According to Kelamis, the companies battled for block 10 which is important according to their seismic and geological surveys and especially on the basis of the model of the Egyptian Zohr field.

“Block 10 is important, because of the geological analogies with Zohr, but in the future, we may have other important blocks which we are currently analyzing and examine”, he noted.

At the same time, he did not rule out a fourth round of licensing by the Republic of Cyprus.

He noted, however, that each licensinground must be successful before it even begins since both CHC and the Government must prepare all the data and incentives that need to be given to the companies. He stressed the need for networking, good coverage of seismic data, presentations abroad and proper preparation.

Referring to the recent first licensing round of Lebanon, he said that, their success was limited, as opposed to Cyprus’ third licensing round which attracted major companies such as ExxonMobil, Qatar Petroleum, Statoil, ENI and Total.

“The success of the third round shows that there was good preparation and that’s why it was successful. Of course, we will have the fourth round, at the right time, with the proper preparation and the right conditions, “he said.

End of November a meeting with Total for the future of block 11

According to Kelamis at the end of November, there will be a meeting with French Total where the energy companies will inform the Republic on its future plans for block 11, following an exploratory drilling a few months ago at the target Onesiphoros.

The outcome of drilling showed that Onesiphoros is not a stand-alone project, even though according to Kelamis, the findings were encouraging.

“Block 11 is encouraging. It is not marketable, but we may have synergies in the future” he told CNA.

At the same time, he emphasized the significance of the discovery in 11, as not only gas was located, but most importantly, the same structure, the same oil system as Zohr, was discovered in Cyprus, in an area of 75,000 square kilometers.

“We have two things that allow us and allow other companies to proceed to find Zohr – type, carbonate deposits in the Cypriot EEZ,” he explained, stressing that the Onesiphoros was the first source, so the results cannot be described as disappointing.

Regarding the exploratory drilling planned by ENI in 2018, Kelamis estimated that it is more likely that the company will proceed to two drillings in two of the blocks for which it is licensed (‘3’,’6’,’8’).

Furthermore, he referred to the drillings planned in block 10 by ExxonMobil and Qatar Petroleum in mid – 2018, pointing out the it’s a huge success for a small country like Cyprus to have five to six drilling in two years.

Intensive negotiation for Aphordite field exploitation

Regarding the exploitation of Aphrodite field and the prospects of exports to Egypt, Kelamis said that CHC is working intensively towards this direction, together with the companies of block 12, Shell, Delek and Noble in order to achieve the best results.

He noted that negotiations are not easy because prices are currently low, despite the upward trend, noting that one should be careful.

“We want to clinch an agreement, because this would be an agreement for 15-20 years that will offer Cyprus the maximum. And we want the agreement to be clear, in order for every Cypriot to really understand why we sign it,” he said.

He noted that since February 2016, there were 18-20 meetings with the interested companies in Egypt, and expressed the view that an outcome will be achieved and announced soon.

“We need persistence and perseverance. We definitely want to go to Egypt, but we have certainly looked at the scenarios of a great discovery and the synergies that will exist,” he added, noting that more deposits give Cyprus more choices for development and commercial exploitation.

“The whole situation in the oil and gas industry is a dynamic situation. We know where we want to go there, but there are many ways to go there,” he said.

Asked if there will be a clearer picture for the exploitation of deposits by the end of 2018, he said that for Aphrodite it will be even faster.

At the same time, he said that the future of Eastern Mediterranean is auspicious regarding oil and gas.

He also talked about a breakthrough such as the findings in the Egyptian Zohr field and how this has changed the game in the Eastern Mediterranean since 2015. Kelamis praised Nicosia’s quick response to this development.

He expressed the view that the Eastern Mediterranean, due to Zohr’s discovery or new discoveries and thoughts about new oil systems in the future, is of great importance to the industry. Moreover, he stressed the importance of the fact that an energy giant such as Exxon Mobil has come to Cyprus and the Eastern Mediterranean.

Asked if there is any evidence of hydrocarbons in the area north of Cyprus, where Turkey claims that may illegally proceed with drilling, Kelamis said there is no official evidence and it is premature for anyone to say anything.

Saying that CHC has no data about the region, he expressed the hope that after a solution to the Cyprus problem, the Republic will be able to gather all the data. Turkey, whose troops occupy Cyprus’ northern part since they invaded in 1974, does not recognize the Republic of Cyprus and acts unilaterally and illegal in the areas it occupies.

He said that special attention should be paid to security and environmental protection in order to minimize the likelihood of technical or human error, which, as he said in recent years, is the most important element in the industry.

Kelamis, who has worked for years in the United States and Saudi Arabia with long-term experience in Saudi Arabia’s state-owned company Saudi Aramco, said that he was impressed by both the human resources in Cyprus in the field and the speed of the procedures for the third licensing round.

“Cyprus must be proud of its scientists in oil and gas,” he added, saying that the country should invest in them not only in technical matters, but also in legal and economic matters. He noted that in Cyprus he has met good scientists with the right attitude.

He told CNA that he was impressed by the collective effort made by all relevant Ministries and Services, headed by the Minister of Energy, for the third licensing round, pointing out that the negotiations were concluded in record time for the industry.

Source: Cyprus Mail

Cooperation Partners
  • Logo for Invest Cyprus
  • Logo for Cyprus Investment Funds Association
  • Logo for Love Cyprus Deputy Ministry of Tourism
  • Logo for Cyprus Chamber of Commerce and Industry
  • Logo for CYFA Cyprus
  • Logo for Association of Cyprus Banks
  • Logo for Cyprus International Businesses Association
  • Logo for Cyprus Shipping Chamber
  • Logo for Ministry of Energy, Commerce, Industry and Tourism