To­tal keen to ex­plore, BG joins No­ble in ‘12’

Financial Mirror (Cyprus) - - FRONT PAGE -

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,

in

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.

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