ENERGY: Total and ENI ready to expand exploration in Cyprus EEZ

France’s Total and Italy’s ENI are set to expand their search for hydrocarbons in Cyprus’ exclusive economic zone (EEZ) despite threats from Turkey.

According to government sources, the energy giants are expected to cooperate in hydrocarbon activities in offshore block 7 which makes them the biggest energy players for exploring and exploiting Cyprus gas.

Although an official announcement on the matter is still pending, reliable sources told the Cyprus News Agency that the French and Italian energy companies are looking to cooperate in other blocks where there is no joint venture such as block 8.

Discussions are being held on multiple levels, with talks between experts still underway.

Last November, the Ministry of Energy said it had received a single application from joint venture Total E&P Cyprus B.V. / Eni Cyprus Limited, for a license to carry out explorations for hydrocarbons in block 7 of Cyprus’ EEZ.

Due to its geology, firms expressed an interest in block 7 and so it was decided to invite companies, that already have licences in neighbouring offshore blocks. They included ENI & Total (block 6 & 11), ENI (block 8), ExxonMobil (block 10).

Foreign Minister Nicos Christodoulides said that developments should be expected in the next few days, concerning the energy programme of the government.

Earlier this week, the Foreign Minister concluded a visit to the French capital, where he had high-level political meetings.

He also met Total Deputy Director of North Africa and the Middle East Elias Kassis, with whom he discussed the company’s future plans in Cyprus, both in relation to drilling targets and new blocks to be licensed.

President Nicos Anastasiades was tight-lipped on the issue of block 7 when asked by reporters on Friday he said, anything there is to be announced, will be made public at the appropriate time.

EU leaders warned Turkey on Thursday to respect the sovereign rights of Cyprus amid a growing dispute over a Turkish drilling ship that entered Cypriot waters.

Anastasiades briefed fellow EU leaders on the issue at a summit in Romania.

European Council President Donald Tusk said the European Union “stands united” behind Cyprus as tensions between Nicosia and Turkey escalate over offshore gas drilling.

Tusk said the EU “expects Turkey to respect the sovereign rights” of its member nation and the bloc will closely monitor the situation.

Cypriot authorities say the Turkish drillship Fatih is anchored about 68 kilometres off Paphos, escorted by support ships and a Turkish navy frigate, but hasn’t started drilling yet.

Anastasiades described Ankara’s actions as tantamount to a new invasion. Turkey invaded Cyprus in 1974 in response to an attempted coup by supporters of uniting the island with Greece.

In February, US energy colossus ExxonMobil discovered a huge natural gas reserve off Cyprus, the island’s largest find to date.

The “world-class discovery” is the third largest find worldwide in recent years.

Preliminary analysis showed the reservoir holds an estimated five to eight trillion cubic feet (141.5 to 226.5 cubic metres) of natural gas.

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.

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.

Noble Energy, Shell and Israel’s Delek are said to be close to renegotiating a deal with the government over the terms of their production sharing contract due to the steep decline in the price of oil since the original terms were agreed.

Under the original agreement made with the consortium, the government gets a 60% share with 40% going to the companies licensed to exploit Aphrodite. This leaves them with little room to manoeuvre in a competitive market and delayed commercialization of the field.

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

Cyprus believes if it can discover more untapped oil and gas reserves it would be a game-changer in the region’s energy policies.

Nicosia aims for natural gas to start flowing to Egypt’s LNG facility by 2025, therefore generating its first revenue from natural gas in the same year.

Source: The Financial Mirror