Total keen to explore, BG joins Noble in ‘12’
Total has recommitted its interest to explore in Block 11 of the Cyprus exclusive economic zone, weeks after Italy’s ENI made the biggest offshore gasfield discovery in adjacent Egyptian waters.
Having initially abandoned its exploration rights in Block 10 after failing to locate any sufficient drilling targets, the French energy giant has now shown keen interest to resume exploration in the Cyprus EEZ, company officials said during a meeting with President Nicos Anastasiades.
Government Spokesman Nicos Christodoulides said that Total has displayed its vivid interest for Cyprus’ EEZ, following a giant discovery by ENI in the adjacent Egyptian EEZ, and due to the results of the geological and geophysical surveys the company has conducted within the Cypriot EEZ.
Chrtistodoulides gave no further details about the meeting, that was also attended by Energy Minister Yiorgos Lakkotrypis, who on Monday confirmed that BG has bid for a 35% stake in Block 12, that includes the ‘Aphrodite’ gasfield where Noble Energy discovered a reserve of about 3.5 trln cubic feet (tcf) of natural gas.
The Ministry of Energy, Commerce, Industry and Tourism said it received a request from Noble Energy for a farm-out agreement with BG International, for a portion of its interest in Block 12. Noble will maintain operatorship of Block 12 reducing its stake from 70% to a 35% interest, while the two Israeli companies Delek Drilling and Avner Oil Exploration hold 15% each.
The Ministry said the agreement,
a transaction worth $165 mln, “constitutes an alignment of upstream and midstream interests, as BG International, a company with substantial technical, financial and marketing capacity is part of the BG Group that holds equity in the LNG export facility at Idku, in Egypt.”
Lakkotrypis said that this is a significant development which shows the increased confidence in Cyprus’ EEZ and its prospects, “since it aligns the commercial interests of ‘Aphrodite’ with our goal which is to channel natural gas to pipe natural gas to Egypt.”
He added that the third partner will financially contribute to the development of the Aphrodite gasfield, estimated to require EUR 2-3 bln, while talks are also underway with Israeli officials as regards the joint exploitation of the reservoir that encroaches into Israel’s EEZ.
“The two countries have exchanged geological data, which each side has examined, and a technical discussion will take place on the basis of the agreed process,” he added.
As regards the possibility of a gas pipeline to Europe via Turkey, Lakkotrypis was adamant saying that the government has not looked into such a scenario.
“Such a scenario may exist for Israel, they may be looking into it, but the Republic of Cyprus’s direction is towards channeling the natural to Europe via the LNGs in Egypt,” he added, suggesting that output from the Aphrodite gasfield could begin in 2020.
Asked about Cyprus’ share of the proceeds, the minister told CyBC it would range from 45 to 60% of profits.