articles | 22 July 2016

Cyprus says 3rd round attracts more quality companies

Energy Minister Yiorgos Lakkotrypis said that some of the companies already involved in oil and gas exploration in Cyprus’ exclusive economic zone had submitted bids in Cyprus’ third licencing round.

“This time, we had more qualitative offers,” compared to 2012, when Cyprus held its second oil and gas licencing round, which attracted France’s energy giant Total and Italy’s ENI, Lakkotrypis said in a telephone interview on Friday, hours after announcing that a total of eight companies submitted six bids.

“We are talking about very strong companies, both (already) present and new ones,” he said adding that he was satisfied with “the companies” themselves because of “their depth, their outreach and their technical-financial profile”.

Attracting high-calibre companies was made possible after Cyprus added stricter evaluation criteria compared to the second round held months after Cyprus announced the discovery of Aphrodite in block 12, which contains 4.5 trillion cubic feet of natural gas and is Cyprus’ so far single gas finding.

“We have become stricter with respect to the evaluation criteria and the commitments of companies,” Lakkotrypis said. He added that this was done in order to “attract companies which have the financial depth and knowhow to help us at this stage”.

In addition to Total which has the licence for block 11 after relinquishing the licence for block 10 last year, and ENI which together with South Korea’s KoGas has the licence for blocks 2, 3 and 9 in Cyprus’ exclusive economic zone, the U.S. Noble Energy Inc. is the leader of a joint venture which includes British Gas, a unit of oil giant Shell, and Israel’s Delek and has the right to exploit the Aphrodite field.

Cyprus three blocks put up in this round had to compete with 5,000 other blocks elsewhere, the minister said adding that Egypt’s Zohr, discovered in September last year containing 30 trillion cubic feet of natural gas made the third round more attractive.

Lakkotrypis declined to reveal the names or nationalities of the companies which participated in this round. He said that he will disclose the names of the bidders after a cabinet meeting on Wednesday.

The minister said that the third round has not been negatively affected by heightened geopolitical tensions in the region, especially following the recent failed coup in Turkey which opposes the Republic of Cyprus’ oil and gas development programme in the absence of a settlement in the Cyprus problem. In 2011, Turkey sent warships to the area when Noble started to drill for gas in block 12 and in 2014, it dispatched a vessel to collect hydrocarbon data in Cyprus’ exclusive economic zone, prompting president Nicos Anastasiades to suspend his participation in reunification talks.

Earlier today, Lakkotrypis said that “the government’s targets for this round have been achieved totally”.

The Cyprus Business Mail understands that no hydrocarbon Russian company was included in those participating in the third round. On June 25, Russian ambassador in Nicosia Stanislav Osadchiy said in an interview to the Cyprus News Agency that Russia which was “contemplating participating in energy projects” in Cyprus would not rush to engage, even as “Russian knowhow in this area can significantly contribute in any energy matter in the Eastern Mediterranean”.

Osadchiy’s comment came three days after Turkish president Recep Tayyip Erdogan and Russian president Vladimir Putin agreed to normalise bilateral relations soured after Turkey shot down a Russian military aircraft operating in Syria in November. The two leaders are expected to meet in August.

Source: Cyprus Mail

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