Greek Cyprus Drilling for oil and gas to start by October 1 Turkey

Stefanos Evripidou    Cyprus Mail

DRILLING FOR natural gas off the southern coast of Cyprus will begin on or before October 1, after which the country will get a concrete picture of how rich its resources are, said Energy Service director Solon Kassinis yesterday.

Cyprus has signed a production-sharing contract with Houston-based Noble Energy. The company has a concession to explore for hydrocarbons in an offshore field in its Exclusive Economic Zone (EEZ) south-east of Cyprus, known as Block 12.

The energy chief said drilling would start by October 1 latest after which, in approximately two months time Cyprus will have a clear view of the size of its hydrocarbons reserves for that block.

The government will then proceed with a second round of licensing for other blocks in the region.

The authorities expect a revised version of the environmental impact study to be submitted this week. The original study was sent to all relevant government departments, who asked for certain clarifications and minor changes.
“Everything is going according to plan. We expect them to resubmit it this week, after which we can give the permit to begin drilling,” said Kassinis.

He clarified that Noble was contractually obliged to start drilling on or before October 1, 2011.

“The rig is in our region. It’s now drilling in Israel’s (offshore field) Noa and will reach our area at the end of September or early October,” he said.

Kassinis expects drilling to last two months, the results of which will give Cyprus a very clear account of the level of hydrocarbon reserves in that field, and likely draw greater interest in bidding for the remaining blocks.
“Block 12 is the only one that’s been licensed. We will probably wait until we get the results of the drilling before proceeding with a new round of licensing by the end of the year, beginning of next,” he said.

Should Noble strike gold in Cypriot waters, a pipeline would need to be built to bring the fuel ashore in its raw, gaseous form.

Not far from Cyprus’ EEZ, the US company also has rights to drill at Israel’s offshore natural gas field, Leviathan, along with Israeli company Delek. Drilling in that gas field, believed to be one of the largest gas finds in a decade, has already begun but was abandoned twice already, reflecting the difficulty and uncertainty surrounding deep-water exploration.

Regarding his recent trip to Israel, Kassinis said he met with various ministries and presented his thoughts on the potential collaboration between the two countries.

A lot of unconfirmed reports have been floating about concerning cooperation between Israel, Cyprus and Greece for both the provisional supply of natural gas to Cyprus as well as use of Cyprus as a transit point for Israeli gas heading towards Europe.

“It appeared there was a very positive spirit. I believe that very soon we will have more meetings to finalise these matters,” said the energy chief.

Asked to comment on Egypt’s new natural gas discoveries in the Nile Delta and Mediterranean Sea to the tune of 194 billion cubic feet of gas and two million barrels of condensate, he said:

“Truly this pleases me because for decades now I have believed that the Mediterranean is very rich in hydrocarbon deposits.”

According to the US Geological Survey, the Levant Basin, an area which includes the coastal areas near Cyprus, Israel, Lebanon and Syria, holds an estimated 120 trillion cubic feet of undiscovered, recoverable natural gas.

Completion of drilling in Cyprus’ Block 12 will give both the government and energy companies a first real indication of the country’s resource potential.

Cyprus has already signed EEZ agreements with Egypt, Israel and Lebanon, though the latter’s parliament has yet to ratify the agreement. In June, Lebanon filed a complaint at the UN on the Cyprus-Israel agreement, arguing that its own rights over the area’s resources were being violated.

In the meantime, any move to begin oil and gas exploration in Cyprus’ EEZ will be monitored closely by Turkey, making the government’s handling of the situation hugely important to its success.

Source:
http://www.cyprus-mail.com/cyprus/drilling-oil-and-gas-start-october-1/20110803