Cyprus and Egypt sign unitisation deal on the joint exploitation

 Cyprus Mail

Cyprus and Egypt yesterday signed a unitisation agreement on the joint exploitation of hydrocarbon reserves, on the median line between the two countries’ respective exclusive economic zones (EEZ).

The seminal agreement paves the way for commercial interests to take advantage of any hydrocarbon reserves found in areas that could cross either side of the dividing line between the two countries’ EEZ.

In total, three bilateral agreements were signed yesterday during President Nicos Anastasiades’ two-day official visit to Cairo, marking an upturn in relations between Cyprus and the interim government of Egypt.

Foreign Minister Ioannis Kasoulides signed a Revised Aviation Agreement between Egypt and Cyprus while Energy Minister Giorgos Lakkotrypis signed a framework agreement for the Development of Cross-Median Line Hydrocarbon Resources.

A cooperation agreement was also signed between the Cyprus Institute of Neurology and Genetics and the Children’s Cancer Hospital of Cairo.

The unitisation agreement is a final agreement between two governments, and the first one signed between Cyprus and one of its neighbours, with significant implications for the development of the industry in the Eastern Mediterranean.

US urges talks for energy in East Med

Hürriyet Daily News

The United States has called for continued dialogue between Turkey and the relevant parties in exploring energy resources both in the Eastern Mediterranean as well as in Iraq.

Carlos Pascual, the U.S. special envoy, called for dialog among parties on the potential resources that are yet to be explored in the Eastern Mediterranean, at the Atlantic Council Summit in Istanbul.
Discoveries of significant amounts of gas around Cyprus have brought with them political problems, as Turkey raised objections about exploration and ownership rights before a political settlement was reached on the divided island. Strains in Israeli–Turkish relations further complicated the transport of gas to a European market via Turkey, which experts agree will be the most commercial way.

It is too early to predict how Eastern Mediterranean gas will reach international markets according to Pascual, who said conversations between countries and companies would be critical to find the most commercially viable and politically acceptable solution.

Meanwhile Leonardo Bellodi, senior vice-president for public Affairs of ENİ said “things looked improved compared to a year ago,” when asked by the Hürriyet Daily News. Turkey had warned companies last year not to go ahead with exploration works in the Mediterranean or face consequences.

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.

Shah Deniz 2 awaits TANAP FID for project commencement

 

Hürriyet Daily News

Al Cook, the Vice President of Shah Deniz Development, emphasizes the importance for TANAP’s key shareholders, Turkey and Azerbaijan, to finalize their decision on investment plans to carry gas.

The Shah Deniz 2 consortium is awaiting the partnership heading the Trans Anatolian Natural Gas Pipeline project to make their FID prior to making their own, with the FID required to trigger the execution of plans to develop Azerbaijani gas fields, according to a high level BP executive.

The TANAP oil pipeline will be carrying gas from Azerbaijan through Georgia and Turkey to European markets the year. Talking yesterday at the Atlantic Council summit in Istanbul, Al Cook, the Vice President of Shah Deniz Development, emphasized the importance for TANAP’s key shareholders, Turkey and Azerbaijan, to finalize their decision on investment plans in order for the FID required for the Shah Deniz 2 project to be made.Yet the reverse is also true for TANAP, according to energy experts, who said TANAP is also waiting for the Shah Deniz 2 consortium to make its final investment decision in order for the project to receive the green light.

“Shah Deniz 2 needs to make the FID before the end of the year because they can no longer delay it,” John Roberts, an energy security specialist, told the Daily News. Al Cook expressed confidence that the Shah Deniz 2’s final investment decision will be made before the end of the year, although admitting that “there will be few very busy weeks ahead.”

Iraq vows to work with BP on controversial oil field

AFP

Iraq said Wednesday it would proceed with work alongside British energy giant BP on a controversial northern oilfield, in a move likely to spark anger in the country's Kurdish region.

The development of the Kirkuk oilfield, which lies amid a swathe of disputed territory in north Iraq, is at the heart of a row over land, oil revenues and the powers of the central government that has been raging for years between Baghdad and the autonomous Kurdistan region.

Iraqi Oil Minister Abdelkarim al-Luaybi, Kirkuk provincial Governor Najm al-Din Omar Karim and BP chief executive Bob Dudley visited the field after holding talks in the province's eponymous capital.

"The contract with the British company will be executed by treating the decline in oil production at Kirkuk oilfield, which has reached 230,000 barrels (per day), and the company will work on surveying the fields and sites of Kirkuk oilfield throughout the contract period," Luaybi told AFP.

Current output represents a significant drop off from the field's peak, and Iraqi officials hope to increase production to 500,000 barrels per day in three years.
 

Turkey, Iraqi Kurdistan clinch major energy pipeline deals

REUTERS        Hümeyra PAMUK & Orhan COSKUN

Iraqi Kurdistan has finalized a comprehensive package of deals with Turkey to build multi-billion dollar oil and gas pipelines to ship the autonomous region's rich hydrocarbon reserves to world markets, sources involved in talks said on Wednesday.

The deals, which could have important geo-political consequences for the Middle East, could see Kurdistan export some 2 million barrels per day (bpd) of oil to world markets and at least 10 billion cubic meters per year of gas to Turkey.

Such a relationship would have been unthinkable just a few years ago, when Ankara enjoyed strong ties with Iraq's central Baghdad government and was deep in a decades-long fight with Kurdish militants on its own soil.

But Turkey imports almost all of its energy needs and growing demand means it faces a ballooning deficit, making the resources over its southeastern border hard to ignore.

During a visit to Istanbul last week by Kurdistan Regional Government (KRG) prime minister Nechirvan Barzani, both sides agreed on the fundamentals of the deals and mapped out technical details for a second oil pipeline and a gas route from Iraq's north to Turkey, sources involved in the talks said.

Iraq says Big Oil to spend $25 bln next yr, despite unrest

REUTERS     Peg Mackey and Ahmed Rasheed

 
* Foreign oil firms due to spend over $25 bln in 2014
* Oil output in south expected to rise by average 500,000 bpd
* Giant southern oilfields, central fields seen safe from attack
* Smaller Nineveh oilfields, Anbar gasfield more vulnerable
* China seeks over 1 million bpd of Iraqi crude

Big Oil is poised to spend over $25 billion next year to boost output from Iraq's giant oilfields towards record rates, Iraq's deputy prime minister for energy said, even as Baghdad struggles to control spillover from the civil war in Syria.

Far from harm's way, the prized oilfields of southern Iraq - drivers of the country's oil expansion - are expected to pump an extra 500,000 barrels per day (bpd) in 2014, said Hussain al-Shahristani. Total output this year is set to average just over 3 million bpd, holding Iraq's rank as OPEC's no. 2 producer.

But Baghdad is raising its guard at the smaller fields of Najmah and Qayara - operated by Angolan Sonangol, which lie in the al-Qaeda heartland of Nineveh province in the northwest and at the Akkas gasfield, operated by South Korea's Kogas, in the western Anbar province near the Syrian border, he said.

"We are definitely concerned about the upsurge in violence, but our concern is for the Iraqi people throughout the country. Iraq is trying its best to combat terrorism," he said in an interview in his office in the heavily fortified green zone.

"The security situation has not affected the oilfields in the south and central Iraq and we haven't noticed any hesitation or slow down in investment by the companies."

Baghdad says still opposes KRG oil pipeline

Iraq PM Maliki and Iraq Deputy Prime Minister for Energy Hussain al-Shahristani

REUTERS   Ahmed Rasheed and Peg Mackey

Baghdad said it is still firmly opposed to Iraqi Kurdistan's plan for an independent oil pipeline through Turkey, insisting that only the central government has the right to export crude.

Iraq's deputy prime minister for energy, Hussain al-Shahristani, told Reuters he had conveyed Baghdad's views to Turkish Energy Minister Taner Yildiz.

"Turkey is aware of Iraq's concern and total rejection of that (KRG pipeline) plan. We have reminded Turkey that this is in breach of the agreement between the two countries that regulates exports from Iraq through the Turkish pipeline," al-Shahristani told Reuters.

"Turkey assured us they respect that agreement and they will not allow any export of Iraqi crude without the permission of the federal government in

Chinese firm wins Turkey missile defence system tender

REUTERS

NATO member Turkey has chosen a Chinese defence firm that has been sanctioned by Washington to co-produce a $4 billion long-range air and missile defence system, rejecting rival bids from Russian, U.S. and European firms.
nato
The Turkish defence minister announced the decision to award the contract to China Precision Machinery Import and Export Corp (CPMIEC) in a statement on Thursday.

In February, the United States announced sanctions on CPMIEC for violations of the Iran, North Korea and Syria Nonproliferation Act.

It did not say precisely what CPMIEC had done, but Washington has penalised the company before. In 2003, Washington said it was extending sanctions on the firm for arms sales to Iran. It was unclear when those measures were first imposed.

Officials at state-run CPMIEC, the marketing arm of China's missile manufacturing industry, could not immediately be reached for comment.

Turkey, which has the second-largest deployable military force in the NATO alliance, has no long-range missile defence system of its own, but NATO has deployed the U.S.-built Patriot air and missile defence system there since 2012.

The winning Chinese FD-2000 system beat the Patriot, the Russian S-400 and the French-Italian Eurosam Samp-T.

Raytheon Co, which builds the Patriot missile system, said it had been informed about the Turkish decision and hoped to get a briefing soon. It said there were 200 Patriot units deployed in 12 countries, including Turkey.

"NATO has long supported the system, deploying Patriots in five aligned countries and, in 2012, providing a requested Patriot deployment to Turkey. Given this strong performance, we hope to have an opportunity to debrief and learn more about this decision," Raytheon spokesman Mike Doble said.

Turkey's pipe dreams

Arabian Business       Lionel Mok

Turkey has continued to make the headlines in the Middle East’s oil and gas industry over the last several months due to a number of factors which include the growing divide between the Kurdistan Regional Government (KRG) and the Federal Government of Iraq (FGI); and the recent signing of the Trans-Adriatic Pipeiline (TAP) and Trans-Anatolian Pipelines (TANAP).

Despite its unremarkable national oil production industry that produces, on average, 50,000 barrels per day (bpd) from reserves that total approximately 270 million barrels of oil, the country has made itself critical to the world’s energy market, while also managing to satisfy growing domestic consumption of over 700,000 bpd.

Turkey owes its gravitational pull in the energy market to its physical geography. As the only landmass standing between the Middle East and Europe, and also the Black and Mediterranean Seas, Turkey is well positioned to become an energy hub and a transit point.

The country is in proximity to 71.8% of the world’s proven gas reserves and 72.7% of the world’s proven oil reserves. It neighbors Iran, Iraq the recently discovered Eastern Mediterranean reserves near Lebanon; and it is less than 250 kilometers away from the Caspian Sea, home of the world’s largest oil discovery in the last thirty years.

By 2004, the Turkish straits of the Bosphorus and the Dardanalles, had the capacity to transit 3.4 million barrels of oil to European markets every day. At the same time, a terminal on Turkey’s Mediterranean coast at Ceyhan, facilitates oil exports from northern Iraq via a pipeline from Kirkuk and from Azerbaijan through the Baku-Tbilisi-Ceyhan pipeline. The Kirkuk-Ceyhan pipeline is Turkey’s largest, with a capacity of 1.65 million bpd.

The planned TANAP will include a natural gas pipeline system running from the Georgia-Turkey border to the Turkey-Greece border, while the TAP, will transport the same natural gas from Greece via Albania and the Adriatic Sea to Italy and further to markets throughout Western Europe.

"Turkey may drill for oil and gas in Cyprus": Minister

Hurriyet Daily News

Turkey’s Barbaros Hayrettin Paşa seismic vessel, which has been conducting offshore oil and gas exploration in the eastern Mediterranean, could enter Cyprus’ exclusive economic zone in three weeks to continue exploration pending prime ministerial approval, Energy Minister Taner Yıldız has said.

“The Barbaros Hayrettin Paşa is drilling off the coast of the Mersin-İskenderun-Antalya region. It will work there, for three weeks more. Later, we will speak with Prime Minister [Recep Tayyip Erdoğan] as to whether it will enter Cyprus’ exclusive economic zone. If the prime minister approves, the vessel could enter to the north or south of Cyprus because it has both a technical and political dimension,” Yıldız told private broadcaster A Haber in an interview early today.

Yıldız also said they might buy a new vessel depending on the work load.

Turkey has strongly protested against Greek Cyprus’ energy exploration in the Mediterranean, branding the moves illegal and starting its own exploratory drilling off Turkish northern Cyprus. The Turkish government says all revenues obtained from the drilling operations off the coast of Cyprus should be distributed between Greek Cyprus and Turkish Cyprus and have frequently warned that Turkey would undertake unilateral drilling in the event of any failure to equitably share revenues.
Ankara has also said companies could be shut out of future Turkish energy investments if they become involved in Greek Cypriot energy exploration work.

Turkey decided in March to suspend energy projects with Italian giant Eni in retaliation for the company’s involvement in oil and gas drilling off the coast of Greek Cyprus.

Source: http://www.hurriyetdailynews.com/turkey-may-drill-for-oil-and-gas-in-cyprus-minister.aspx?pageID=238&nID=55114&NewsCatID=348

Iraq Central Government Threatens to Cut Revenue to Kurds Over Pipeline to Turkey

Bloomberg Business Week

Iraq central government threatened to cut oil revenue to the Kurdish north in a deepening standoff over a new export pipeline that companies from DNO International ASA (DNO) to Genel Energy Plc (GENL) plan to use to ship crude from the region.

The government in Baghdad may refuse to give the 17 percent of annual earnings from oil sales allocated to the semi-autonomous Kurdish provinces if they bypass central authorities and start operating a link through Turkey by year-end, Hussain al-Shahristani, deputy prime minister for energy affairs, said in an interview in Dubai yesterday.

“We have our options, and you will hear them when we adopt measures, as this is a big loss for Iraq,” he said. “No Iraqi would accept that they take 17 percent of Iraq’s revenue from crude produced outside of Kurdistan and at the same time all of the revenue of the crude produced in Kurdistan.”

 

The Kurdistan Regional Government halted crude exports through the government-run pipeline in December amid a dispute with the Oil Ministry in Baghdad over the sharing of crude sales revenue and payments owed to companies such as DNO and Genel Energy. The Kurds, who are building export pipelines as a step toward self-sufficiency, estimate their oil reserves at 45 billion barrels.

The Iraqi government insists that the Kurds link their new crude export pipeline to the main government pipe at a metering station near the Turkish border, Shahristani said.

“They refused and said they want to link it after the metering station to prevent the Iraqi government from knowing the quantity of crude they are exporting,” he said. “The real problem is that they don’t want anyone to know how much they are producing and selling.” 

EU Diplomats: "Failed Nabucco West plan still on EU priority list"

REUTERS

The Nabucco West pipeline, which lost a contest to ship Azeri gas to Europe, is still on a list of projects eligible for EU cash, implying the European Commission still believes it could be built, EU diplomats said.

The Commission, the EU executive, next month is expected to publish a final list of projects judged significant to more than one EU nation and entitled to accelerated planning approval as well as consideration for money from the EU budget.

Commission officials declined to disclose the content of the list before publication.

But the diplomats, speaking on condition of anonymity, said it included the Nabucco West scheme, led by OMV, as well as the Trans Atlantic Pipeline (TAP), which was selected to by the Shah Deniz gas consortium to carry gas to Europe.

TAP includes Norway's Statoil, BP, SOCAR, Fluyxs, Total, E.ON Ruhrgas of Germany and Swiss company.
Commission officials have repeatedly said Nabucco West is not dead and could one day be built if more Caspian gas becomes available.

Other schemes on the list of roughly 200 Projects of Common Interest include a Baltic energy grid, aimed at ending the isolation of Baltic states and curbing their reliance on Russia.

A feasibility study for a gas link from Cyprus to Crete and then Greece or Italy is also on the list.
Cyprus has high hopes of rapidly developing its gas reserves to revive its broken economy, but export routes are complicated by its long-standing rift with Turkey.

Israeli gas group in talks on export pipelines to Turkey, Jordan, Egypt

Reuters

A group of energy companies that discovered large amounts of natural gas off Israel’s Mediterranean coast said they were in talks to export the gas to Europe via a pipeline to Turkey.

They are also studying options to export gas to Jordan, Egypt and the Palestinian Authority, Avner Oil & Gas said yesterday.

“The partners are negotiating with various officials,” Avner, one of the partners in the project, said.

A spokesman for Delek Group, the parent company for Avner and for Delek Drilling, said the group - led by Noble Energy - was already in advanced talks with companies in Turkey, Jordan, Egypt and the Palestinian Authority about buying Israeli gas and building pipelines.

The talks show that the gas project is moving ahead, with prospects of eventually boosting Israel’s export revenue and economic growth. They also indicate reduced tensions between Israel and Turkey. A pipeline could improve relations between the two countries, which have been poor since 2010.

Recoverable gas in the Levant Basin, which lies largely in Israeli and Cypriot waters in the eastern Mediterranean, hold some 3.5tn cu m of gas, the US Geological Survey has estimated.

Turkey would struggle to cut Iran oil imports further: official

 Reuters

Turkey would struggle to cut its crude oil imports from Iran any further, a Turkish official said on Thursday, after the U.S. House of Representatives passed a bill to tighten sanctions on the Islamic Republic by further slashing its oil exports.

"Turkey has already cut the amount of oil it buys from Iran as much as possible. A further cut after this would greatly stretch Turkey," the official said.

Turkey's sole refiner Tupras has cut Iranian oil imports by around 40 percent to 110,000 barrels per day (bpd) and raised purchases from Saudi Arabia, Libya and Iraq.

http://www.reuters.com/article/2013/08/01/usa-iran-sanctions-idUSL1N0G12L320130801

Turkey's Sat-Launcher Plans Raise Concerns

Defense News     Burak Bekdil 

Turkey has approved construction of its first satellite launching center to cater for the country’s mushrooming satellite programs.

But Ankara’s western allies worry that the Turks intend to use their own launching pad to fire the long-range missiles they hope to build in the medium- to long-run.

Turkey’s procurement agency, the Undersecretariat for Defense Industries (SSM), in early July signed a contract with the country’s national missile manufacturer, Roketsan, to build the Turkish Satellite Launching System (UFS) for pre-conceptual design work.

Under the contract, Roketsan will design the UFS to be capable of launching, initially, satellites into low earth orbit (500 to 700 kilometers) through a launching center the company will build and the Turkish Air Force will operate.

“We intend to end Turkey’s foreign dependency on launching military and [civilian] communications satellites,” one Roketsan official said. “We also think Turkey may launch other nations’ satellites with its own system in the longer-run.”

An SSM official familiar with the program said one reason for the UFS project was that Turkish planners are aiming toward a compact space program, including a national launcher. “The government and military planners think that any space road map without an indigenous launcher would be incomplete,” he said.
But diplomats and analysts think that the Turks may have other reasons for their desire to have their own satellite launcher.

TAP outgunned Nabucco for Azeri gas on most fronts

 Reuters

* TAP beat Nabucco on 7 of 8 criteria

* The reason was not high gas prices in Italy, Greece
* Government continues to support South Stream
* GALSI pipeline important for Italy

The Trans-Adriatic Pipeline (TAP) project outscored rival Nabucco West on virtually all fronts to win the race to carry Azeri gas into Europe, a junior minister at Italy's Industry ministry told Reuters.

Azerbaijan's state energy company SOCAR and its partners in the Shah Deniz II gas field, including BP and Statoil , said on Friday they had selected TAP.

The project, linking a Turkish pipeline to southern Italy via Greece and Albania, plans to deliver 10 billion cubic metres (bcm) of Azeri gas to Europe each year beginning in 2019.

BP said there was a "substantial" commercial difference between the two competing pipeline projects, including the cost of shipping the Azeri gas and gas prices in the respective markets.

The head of Austria's OMV, part of the rival Nabucco project, said last week the TAP project had been chosen because of high gas prices in Italy and Greece.

"It was not for high gas prices in Italy and Greece," Claudio De Vincenti said in an interview.

Anglo-Turkish company discovers new oil in KRG

Hurriyet Daily News

Genel Energy, Anglo-Turkish oil and gas independent, has announced that it has discovered new commercial oil reserves in northern Iraq.

In a written statement yesterday, Genel Energy confirmed the existence of a commercial oil discovery in the Ber Bahr 1 exploration well in the Kurdistan Region of Iraq (KRG).

“The Ber Bahr well adds a further commercial oil discovery to Genel’s already significant KRI resource base,” the statement said. The company plans to begin a phased development of the field in the second half of this year. Genel Energy holds a 40 percent working interest in Ber Bahr. Gulf Keystone Petroleum Ltd holds a 40 percent working interest and the KRG holds the remaining 20 percent interest.

Genel Energy now operates in seven sites in the KRG, including Chia Surkh, Dohuk, Miran, Bina Bawi, Taq Taq, and Kewa Chirmila. However, there is a long-running dispute between the central government in Baghdad and the autonomous KRG over how to develop the country’s resources.

Source: http://www.hurriyetdailynews.com/anglo-turkish-company-discovers-new-oil-in-krg.aspx?pageID=238&nID=47921&NewsCatID=348

Turkey to begin negotiations on gas supplies from Turkmenistan

Trend

A framework agreement on cooperation for the supply of natural gas from Turkmenistan to Turkey can be called an illustrative result of the talks between the presidents of Turkmenistan and Turkey, Gurbanguly Berdimuhamedov and Abdullah Gul, who is on a state visit to Ashgabat.

Ankara periodically expresses its interest in the delivery of Caspian energy to Europe through Turkey, and the issue has been on the agenda since the mid nineties.

It is necessary to lay a 300-km pipeline under the Caspian Sea to Azerbaijan for the delivery of Turkmen resources to Europe. From there, the fuel reaches Turkey, which shares borders with Europe. The Trans-Caspian project could become a part of several large-scale projects such as Nabucco, AGRI and TANAP in which Ankara takes an active part.

The Trans-Caspian project at this stage is considered by experts as the most optimal way to deliver Turkmen gas to Europe.

Official Ashgabat believes that the consent of the parties, territories of which are covered by the project (Turkmenistan and Azerbaijan), is sufficient for laying the pipe under the Caspian Sea.

Baku has expressed readiness to provide its territory, transit opportunities and infrastructure for its implementation, as reported by the representatives of the State Oil Company of Azerbaijan (SOCAR).

Source:  http://en.trend.az/capital/energy/2156037.html

Turkish Parliament opens way to oil market liberalization

Hurriyet Daily News

A petroleum market draft code has passed into law in General Assembly of the Parliament despite the opposition’s outcry over the measures which diminishes the role of state-owned TPAO in the market.

The Turkish Parliament’s General Assembly has approved a draft code on the petroleum market that comprises regulations to boost the dynamism in the sector by easing the circumstances for private actors and to end rentiers in the sector.

The new law, which is designed to regulate oil exploration and production operations in compliance with the country’s energy policies has passed into law late on May 29.

The government says the new regulations would liberalize the sector significantly.

But opposing groups say that it would leave the state-run Turkish Petroleum Company (TPAO) in a weaker position.

During the discussion of the draft in Parliament, one of the main opposition Republican People’s Party deputies attacked the draft, blaming the government for “not thinking to make exploration and production more efficient and rather seeking ways to please foreign capital.”