At the same time, ENI, following its two back-to-back duds needs a time-out and the government should oblige, energy analyst Charles Ellinas said.

The government yesterday declined to comment on reports that ENI requested an extension on their exploration license, which under the current contract expires in February 2016.

Energy minister Giorgos Lakkotrypis said, after announcing the results at Amathusa, that the government is reviewing the ENI-KOGAS consortium’s request to re-evaluate their geological model.

This re-evaluation could take time, said Constantinos Hadjistassou, a lecturer at the University of Nicosia and a researcher with the KIOS Centre, University of Cyprus.

The geological model is essentially a reconstruction of the bedrock structure based on seismic surveys, combined with an analysis of the probability of the presence of hydrocarbons.

Since the area around the Amathusa play was previously uncharted territory, the model used by ENI always entailed an element of risk, Hadjistassou explained.

“So far, ENI has drilled two wildcat wells, and missed. That is not at all uncommon in the business,” he noted.

Now, having taken core samples from the bedrock, and by sharing data with Noble Energy, ENI will form a more accurate picture of the area, so that their next drilling target has more chances of success.

ENI’s Amathusa prospect, in Block 9, lies just 10 km from the boundaries of adjoining Block 12 – licensed to Noble Energy – and just 30km from the Aphrodite reservoir.

It’s therefore likely that the two neighbouring acreages share similar geologic traits, said Hadjistassou.

The Saipem 10000 drill ship will now undergo maintenance work, lasting four to five months. The question is where the ship heads next.

It’s understood that ENI were contractually obligated to drill at least four wells by the end of their concession. But with a second miss, it’s unlikely they will return to Cyprus for a third try.

Due to the falling oil prices, the company has already made cutbacks and, with nothing to show its shareholders after spending $300 million here, will want to move on to more promising prospects elsewhere.

ENI have pledged to invest some $5 billion in Egypt over the next four years in drilling and development projects. They also have a considerable stake in the Damietta LNG plant.

It’s therefore almost a certainty that their next destination in the Mediterranean will be Egypt, specifically the Nile Delta, which has proven to be a prolific site for hydrocarbons, Ellinas said.

If that is the case, then the drill ship would be busy there for at least until the end of this year.

“My guess is that ENI will be asking for a one-to-two year extension on their contract with Cyprus, and the government ought to grant them the breathing space,” opined Ellinas.

“It won’t be until 2017 that oil prices bounce back to a certain extent – but still under $100 a barrel – so until then, companies will avoid high-risk exploration ventures. Authorities here need to take that into consideration and give ENI some leeway.”

Cyprus’ proven gas reserves so far amount to 4.5 trillion cubic feet, in the Aphrodite prospect.

Source: Cyprus Mail