ENERGY: ExxonMobil strikes it rich in Cyprus offshore gas exploration

US energy giant ExxonMobil and Qatar Petroleum have detected the largest exploitable natural gas reserves found offshore Cyprus in one of the biggest finds globally in last two years, Cypriot authorities said Thursday.

It is only the island’s second confirmed commercially viable gas find since 2011 but much bigger, it is also one of the largest recent finds globally, said Cyprus Energy Minister George Lakkotrypis on Thursday.

He said ExxonMobil and Qatar Petroleum made a world-class discovery of a natural gas-bearing reservoir of excellent quality, which based on preliminary analysis is estimated to represent in-place quantities of natural gas of 5 to 8 trillion cubic feet (Tcf).

A high-quality reservoir 5-8 TCF of natural gas is added to the country’s reserves and demonstrates the emergence of the Republic’s EEZ as an alternative indigenous source of supply to the EU, said Lakkotrypis.

ExxonMobil vice president Tristan Aspray � present at the announcement in Nicosia � called the results encouraging but said further analysis would reveal its true potential as an energy source for regional and global markets.

He said the construction of a plant on Cyprus to process gas exports was also an option.

Block 10 is 2,572 square kilometres, ExxonMobil Exploration and Production Cyprus (Offshore) Limited is operator and holds 60 percent interest in the block. Qatar Petroleum International Upstream O.P.C. holds 40 percent interest.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas � it has yet to be commercialised.

To better determine the quantity of natural gas in the Glafcos-1 reservoir, further evaluation work will take place in the coming months, the minister said.

Cyprus announced the results after exploratory drillings in the Delphine-1 and Glafcos-1 wells � between November 2018 � February 2019 – in block 10 of Cyprus’ Exclusive Economic Zone which ExxonMobil and Qatar Petroleum have a license to explore and exploit.

The gas reservoir was located in Glafcos-1 while no commercial quantities were found in Delphine-1.

The Glafcos well, located in Block 10, encountered a gas-bearing reservoir of approximately 436 feet (133 meters). The well was safely drilled to 13,780 feet (4,200 meters) depth in 6,769 feet (2,063 meters) of water.

The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.

And Block 10, adjacent Zohr, is said to have many similarities to that gas reservoir.

Seismic data suggests enough gas has been found to spur ExxonMobil to continue exploration and make the operation commercially viable.

It could be seen as a game-changer in efforts to find a Cyprus solution with promised energy wealth pushing both sides back to the negotiating table.

On the other hand, it could raise tensions in the Eastern Mediterranean where Turkey has its own claims on energy exploration.

Washington fully supports the right of Cyprus to exploit its natural wealth as it views energy development in the Eastern Mediterranean as a matter of priority.

ExxonMobil’s announcement of a significant find coincides with Turkey’s biggest ever naval exercise in the region.

The Blue Homeland exercise, with the participation of frigates, destroyers and fighter jets, is taking place in the Black Sea, the Aegean and the Mediterranean between February 27 and March 8.

Turkey has objected to Nicosia’s search for gas without the consent of Turkish Cypriots in the Turkish-held north of the island, and officials have declared Turkish ships will soon begin offshore drilling activities around Cyprus.

Ankara says it will protect the rights and interests of the Turkish Cypriots and take the necessary steps on the issue of natural gas, just as we do on other issues.

Turkey has cautioned international oil companies not to drill for hydrocarbons off Cyprus or threatened to retaliate.

It argues that Cyprus has no mandate to exploit energy oil and gas riches while the island is still divided and no peace deal in site.

Turkish President Recep Tayyip Erdogan has warned foreign energy companies not to “overstep the mark” in disputed waters off the Cypriot coast.

The Italian state-controlled ENI had to abandon a scheduled drill for gas south of Cyprus in February 2018 due to a standoff with Turkish naval ships blocking the way of a drillship.

Meanwhile, the Aphrodite consortium � including Israel’s Delek and Royal Dutch Shell – seeks to renegotiate its contract on the gas field before it plans to tap it.

It is currently in talks with Nicosia over a bigger share of the profits to make the project viable.

Cyprus aims for natural gas to start flowing to Egypt’s LNG facility in 2022 via pipeline from Aphrodite, therefore generating its first revenue from natural gas.

Cyprus believes if it can discover more untapped oil and gas reserves it would become a regional energy player.

The ExxonMobil find also offers encouragement to France’s Total and ENI who have Cyprus offshore exploration licenses and are planning five more test drills this year.

Source: The Financial Mirror