Energy Minister expects to hear from Total about EEZ exploration

Energy, Commerce, Industry and Tourism Yiorgos Lakkotrypis said he expects some news this week about Total renewing its exploration license for block “11” of Cyprus’ Exclusive Economic Zone (EEZ).

In an interview with the Cyprus News Agency, Lakkotrypis said that “I hope that we will have some news this week. We are now waiting for the company to notify us officially whether it will renew its contract for block “11”, the first period of which expires in February 2016,” he said.

He added that company officials, both in their visits in Cyprus, and during their meetings with President Nicos Anastasiades have expressed their interest in more blocks within the Cyprus EEZ. There is also interest, as he said, by other companies that operate in Cyprus’ EEZ or have bought the country’s geological data during the two licensing rounds for exploration rights in 2007 and 2012.

Cyprus’ government has issued exploration licenses for blocks 12 (Noble Energy), 10 and 11 (Total) and 2, 3 and 9 (ENI-KOGAS). But Total had abandoned its license for Block 10 as its exploratory drills came up dry.

However, Block 11 is adjacent to Egypt’s recent record finds in the Zohr gasfield.

Lakkotrypis also said that the entry of BG as a shareholder in Block 12 may accelerate and improve the development of the “Aphrodite” gasfield.

He said that this means that a potential buyer, who manages and owns one of the liquefaction terminals in Egypt, is now involved in the development of “Aphrodite”.

“Based on the development and production plan filed by the Noble-Delek consortium for “Aphrodite” a few months ago, the first production is expected in 2020”, he said.

He added however that BG is now expected to examine the development plan to see if it can bring any improvement that will allow the extraction of gas earlier and more cheaply.

What is now expected and is under negotiation, said the Energy Minister, is the trade agreements between the partners in block “12”, the Cyprus Hydrocarbons Company and the potential buyers in the Egyptian market. The Minister stressed that as the Egyptians told the Cypriot side during a visit to the island a few weeks ago, their needs in natural gas are very high, despite the discovery of Zohr field in Egypt’s EEZ and that there are still interested in Cyprus’ deposits both for exports through their liquefaction plants, but also for their internal consumption.

Lakkotrypis also referred to the potential buyers of Cyprus gas.

“One is EGAS for Egypt’s internal consumption and the other is BG or Union Fenosa that manage the other exports terminal,” he said.

Furthermore, Lakkotrypis referred to the reassessment of the potential of Cyprus’ EEZ by the French consultants of the Government, in light of the new model formed after the discovery of Zohr field. As he said, the final results are expected in a few weeks.

Meanwhile, the cooperation between Cyprus and Israel continues, and is a strategic relationship, said the Minister, adding that “it is certainly not affected by the relations of other countries.”

Invited to comment on the relations between Turkey and Russia and whether this will push Turkey to turn to Israel for its energy needs, he said, “the interest of the Turkish companies for Israel’s gas market is not something new. We have seen it unfold in the past”, he said, adding that they will wait to see whether this crisis in Turkey- Russia relations would be extended in their energy relations too.

Regarding the tourism sector and how it is affected by developments in the region, Lakkotrypis said that any new developments should be expected in the new year.

“This year we seem to have a flow of tourists in November, which was channeled, unfortunately, from Egypt to Cyprus. I say unfortunately, because we prefer our partners to be strong both economically and politically, and certainly we would not exchange this with several hundred tourists,” the Minister said.

As he said that after the incident in Sharm El Sheikh, there was an increased tourist flow in November compared to last year.

“For 2016 the contacts have just begun, and are intense particularly in the tourist sector, so as to see the interest and how this translates into tourist arrivals and revenue for Cyprus,” he said.