Cypriot concessions covering exploration rights within the island’s Exclusive Economic Zone (EEZ) have been ratified with the signing of the first contracts with an energy firm consortium on Wednesday.
The signings will continue on Thursday too.
Last month, the cabinet approved contracts with France’s Total, Italy’s Eni, Exxon Mobil and Qatar Petroleum to explore for oil and gas in offshore areas south of the island. The consortium will officially sign the contracts with the Cypriot government for exploration rights for three offshore blocks off the south and south-western coast.
Welcoming the Senior Vice President of ExxonMobil Corporation, Andrew Swiger, the President and CEO of Qatar Petroleum, Saad Sherida Al-Kaabi, and their associates, Energy Minister Giorgos Lakkotrypis said that Wednesday’s signing ceremony concluded the 3rd licensing round.
“Today’s ceremony signals the completion of the 3rd Licensing Round for offshore exploration in the Exclusive Economic Zone (EEZ) of Cyprus. It has been a process for which the members of the competent Negotiating Team and Advisory Committee, as well as technocrats from our Ministry, have worked hard and with full commitment to complete within a year,” said Lakkotrypis.
“By exercising our sovereign rights, we feel, we have clearly achieved the target set by the Government to attract oil and gas companies with extensive experience to operate in our EEZ,” he added.
Describing Exxon Mobil and Qatar Petroleum’s presence in the Cyprus EEZ as ‘immense’ Lakkotrypis said that the Cyprus’ primary goals during the 3rd Licensing Round was to advance the exploration of our EEZ, aiming, of course, at the discovery of hydrocarbon reserves.
“I have to say that this is precisely what we have achieved. A total of twelve exploration wells will be drilled in the newly licensed Blocks 6, 8 and 10,” said Lakkotrypis.
The ExxonMobil and Qatar Petroleum consortium, had earlier on Wednesday morning expressed to President Nicos Anastasiades, their intent to drill their first exploration well within 2018.
— Nicos Anastasiades (@AnastasiadesCY) April 5, 2017
“Of equal importance to our country are the financial benefits arising from signing the three new Exploration and Production Sharing Contracts,” said Lakkotrypis.
Initially, the Republic of Cyprus will receive as signature bonuses a total of €103,5 million.
Lakkotrypis also outlined the government’s commitment to invest in human resources, having secured a substantial budget for education and specialisation purposes while conducting tailored education and training programmes for the optimal development of Cyprus’ hydrocarbon potential
“We firmly believe that investing in the local human capital is a prerequisite for Cyprus to become a true energy hub in the Eastern Mediterranean,” concluded Lakkotrypis.
Exploring the Mediterranean’s Levant Basin has become more attractive since Eni discovered Egypt’s offshore Zohr field in 2015, the biggest gas field in the Mediterranean and estimated to contain 850 billion cubic metres of gas.
(PICTURES BY STEFANOS KOURATZIS)
Eni and Total are in a consortium for one of the blocks and ExxonMobil and Qatar have joined up for another. Eni will be on its own in a third block. The blocks were offered in the third licensing round held by Cyprus.
Total, which won rights for another block in a previous licensing round, planned to conduct drilling this year in Block 11, which borders the Zohr discovery.
Eni said last month that it had finalised a deal with Total to buy a 50 percent interest in Block 11, with Total remaining the operator. The Italian firm planned to drill twice this year.
Noble Energy of the US made Cyprus’s first natural gas discovery offshore in 2011.
Meanwhile, Cyprus, Greece, Italy and Israel had pledged earlier this week to move ahead with the world’s longest undersea gas pipeline from the eastern Mediterranean to southern Europe, with support from the European Union.
If carried out as planned, the long-discussed €5.8 billion pipeline will take gas from Israel and Cyprus’s recently discovered offshore gas reserves to Europe, potentially reducing European dependence on Russian energy at a time of ongoing tensions.
In a joint news conference in Israel’s commercial capital Tel Aviv, energy ministers from the four nations – including Cyprus’ Lakkotrypis – and the EU’s Commissioner for Climate Action and Energy Miguel Arias Canete pledged their commitment to the project.
Feasibility studies had been completed, they said, adding that they hope to develop a full plan for development by the end of the year.
They said construction of the pipeline would not begin for several years and it would likely go online in 2025.