Greek Cyprus to auction gas exploration blocks

AFP

Greek Cyprus has entered talks with Italian-South Korean venture ENI-KOGAS on licensing two offshore exploration blocks, state media said, as the recession-hit island steps up its search for gas reserves.

The cabinet reportedly gave the green light for the negotiations on blocks 5 and 6 to begin, with a December 2 deadline ready to be extended. Government spokesman Victoras Papadopoulos confirmed ministers had discussed the issue but told reporters there was “nothing to announce publicly.”

Earlier this year, ENI-KOGAS secured permits to exploit possible hydrocarbon deposits in blocks 2, 3 and 9. The venture plans to start drilling in the third quarter of 2014.

Turkey gas move piles pressure on Cyprus

Daniel Dombey       The Financial Times
 
Turkey is seeking to ratchet up the pressure on Cyprus as the island battles with financial crisis by taking action against energy groups that collaborate with the Cypriot government over offshore gas.

Taner Yildiz, Turkish energy minister, announced on Wednesday that Eni, the Italian energy giant, would be barred from current and future projects in Turkey if it proceeded with a licence it won in January to explore gas off the Cyprus coast.

Turkey which invaded the island in 1974 to forestall a union with Greece, has no diplomatic relations with the internationally recognised Greek Cypriot government in the south of the island.

“We have decided not to work with Eni in Turkey, including halting their current projects,” Mr Yildiz said. Eni, which has limited activity in Turkey, expressed its hope it could reach an agreement with Ankara “and return to our usual good relations”.

Turkey’s uncompromising move comes as Cyprus is seeking to capitalise on offshore natural gas deposits that could total 200bn cubic metres and looks for alternative sources of growth to its stricken banking sector.

Cyprus Potential Vast Natural Gas Reserves on the Table

Naturag Gas Europe

Cyprus is making headlines these days due to its centrality in the EU banking and debt crisis, but it’s also one of the few areas in Europe where potentially vast unexplored natural gas reserves are to be found offshore.

In a recent international energy seminar organized by the Greek Institute of Energy of South East Europe (ΙΕΝΕ), interesting facts and data were presented by scientists and market experts that shed light to a series of fascinating developments that will shape to an extent the energy game in Europe.

Presently six sea blocks of Cyprus have been awarded for research to international companies (Blocks: 2, 3, 9, 10, and 12). The President of the Cyprus agency for hydrocarbons (KRETYK), Charalambos Ellinas, stated that his organization estimates around 40 trillion cubic feet could be found only in these 6 blocks and that by 2020 the country could export around 2 trillion cf per annum to world markets, an impressive amount, enough to cover the needs of a country like France. Already French Total, Italian Eni and Korean KOGAS have bought research and exploration rights and Noble Energy in Block 12 has made the first discovery of an estimated 3.5 TCF. The total capital expenditure for the six blocks over the coming years is estimated at $2 billion and Ellinas also commented that his agency assumes that block 9 (to be researched by Total) most probably contains twice as much gas as the 12 one.

France's Total joins Cyprus energy rush

AFP

Cyprus on Wednesday signed an agreement with French energy major Total to conduct exploratory drilling for gas and oil in two blocks off its southern shore.

The deal comes as Cyprus aspires to become a regional energy hub with the prospect of oil as well as natural gas being tapped beneath the sea bed.

"With today's act the government has completed one of the most crucial aims in its energy policy, that of successfully conducting a second round of licensing," Commerce Minister Neoclis Sylikiotis told reporters after the signing ceremony.

Total signed a deal to exploit blocks 10 and 11 that are adjacent to a large natural gas find in block 12 and said it seeks to proceed in drilling for oil as well as gas reserves in the said blocks.

Turkey has protested strongly against Nicosia's energy search, branding it illegal and beginning its own exploratory drilling off the breakaway north of the island.

Ankara has warned that companies involved in the Cyprus process could be shut out of Turkey's energy investment.

Sylikiotis said that having countries such as France, America and Italy involved in the island's hydrocarbon exploration acted as a "political shield" against Turkish threats.

Cyprus has been divided since 1974, when Turkish troops invaded and occupied its northern third in response to an Athens-engineered coup in Nicosia aimed at union with Greece.

It is estimated that there could be around 60 trillion cubic feet of gas lying in the 13 blocks that make up Cyprus's 51,000 square kilometre exclusive economic zone.