Exxon­Mo­bil to drill off­shore Cyprus in Q4

US en­ergy gi­ant moves ahead amid re­newed Turk­ish threats against Ni­cosia

Financial Mirror (Cyprus) - - CYPRUS - By Char­lie Char­alam­bous

US en­ergy gi­ant Exxon­Mo­bil said on Fri­day it plans to be­gin test drilling for hy­dro­car­bons off­shore Cyprus later this year de­spite Tur­key warn­ing in­ter­na­tional firms against such moves.

“Our plan is to drill some­time in the fourth quar­ter, we haven’t got an ex­act date right now,” se­nior vice pres­i­dent of Exxon­Mo­bil Neil Chap­man told re­porters on Fri­day.

He made the com­ments af­ter hold­ing talks with Pres­i­dent Ni­cos Anas­tasi­ades a day af­ter Tur­key ad­vised en­ergy firms not to bid for a li­cense to ex­plore for oil and gas in a new block off­shore Cyprus.

Cyprus on Wed­nes­day in­vited France’s To­tal, Italy’s Eni and Exxon­Mo­bil - al­ready li­censed to ex­ploit oil and gas in Cyprus’ Ex­clu­sive Eco­nomic Zone (EEZ) - to bid for un­claimed block 7.

Chap­man said, “we have not looked in any de­tail at block 7 yet”.

He said the fo­cus of the meet­ing were plans to drill ex­plo­ration wells in block 10 li­censed to Exxon­Mo­bil and Qatar Petroleum.

Ad­ding to the volatile mix, Tur­key is also plan­ning to con­duct ex­ploratory drills off Cyprus around the same time as Exxon­Mo­bil.

And Tur­key has re­acted an­grily to a de­ci­sion by Ni­cosia to in­vite en­ergy play­ers to bid for a new li­cense to ex­ploit oil and gas in block 7 of its EEZ.

In a state­ment on Thurs­day, the Turk­ish For­eign Min­istry ad­vised: “Com­pa­nies that might be in­ter­ested in par­tic­i­pat­ing in the ten­der to act with com­mon sense and to duly con­sider the re­al­i­ties on the ground”.

Ankara claims that an “im­por­tant seg­ment” of block 7 “re­mains within the outer lim­its of Tur­key’s con­ti­nen­tal shelf in the East­ern Mediter­ranean”.

Tur­key said it will con­tinue to take all the nec­es­sary mea­sures to pro­tect its rights and will not al­low any third party to con­duct ex­ploratory ac­tiv­i­ties for the de­vel­op­ment of hy­dro­car­bon fields in the re­gion.

“Tur­key has never al­lowed and will never al­low any for­eign coun­try, com­pany or ship to con­duct unau­tho­rised re­search ac­tiv­i­ties re­gard­ing nat­u­ral re­sources within its mar­itime ju­ris­dic­tion ar­eas,” said the state­ment.

Chap­man said these matters were re­solve.

“We are a com­mer­cial en­tity and our busi­ness is about pro­duc­ing and devel­op­ing nat­u­ral re­sources on be­half of gov­ern­ments,” said Chap­man.

“Any gov­ern­ment is­sues, bound­ary dis­putes, bor­ders, that’s for gov­ern­ments to dis­cuss and for gov­ern­ments to re­solve that’s not Exxon­Mo­bil’s busi­ness,” he added.

He said the time­line for devel­op­ing un­tapped re­sources is a painstak­ing process.

“Should there be suf­fi­cient hy­dro­car­bons in the wa­ters in block 10, you then have to ap­praise it, to un­der­stand if it’s com­mer­cially vi­able,” said the Exxon­Mo­bil ex­ec­u­tive.

He added: “And then the time to get com­mer­cial

for gov­ern­ments

to quan­ti­ties into mar­ket is years, it can be seven years and the time­line is a re­ally im­por­tant com­po­nent to this.”

En­ergy Min­is­ter Ge­orge Lakkotrypis said that, due to its ge­ol­ogy, firms have ex­pressed an in­ter­est in block 7 and so it was de­cided to in­vite com­pa­nies, that al­ready have li­cences in neigh­bour­ing off­shore blocks, to ex­press an in­ter­est.

He said the process would be sim­i­lar to the pre­vi­ous li­cens­ing round and would in­volve those com­pa­nies awarded li­censes in ad­ja­cent ar­eas blocks 6 (ENI and To­tal), 8 (ENI), 10 (Exxon­Mo­bil and Qatar) and 11 (To­tal and ENI) of Cyprus’ EEZ.

Lakkotrypis said Ni­cosia de­cided to pro­ceed with ex­ploit­ing block 7 due to “very spe­cific ge­o­log­i­cal rea­sons” that have to do with pre­lim­i­nary a dis­cov­ery in block 6 an­nounced by ENI in Fe­bru­ary.

ENI is the op­er­a­tor of block 6 with a 50% stake and To­tal has the other 50%.

The Ca­lypso field is con­sid­ered by ENI to be a promis­ing gas dis­cov­ery that con­firms the ex­ten­sion of the “Zohr like” play in the Cyprus blocks.

Asked to com­ment on re­ports that To­tal and Exxon­Mo­bil are plan­ning to cre­ate a con­sor­tium for block 7, Lakkotrypis said that he did not want to pre­dict what the com­pa­nies would do.

Those in­ter­ested will have one month to sub­mit their bids for the block. Those bids will then go to an ad­vi­sory com­mit­tee and a ne­go­ti­a­tion process will fol­low.

Hy­dro­car­bons can be a cat­a­lyst for en­hanced re­gional sta­bil­ity and should serve as an in­cen­tive to reach a Cyprus set­tle­ment, said Ju­dith Gail Gar­ber, nom­i­nee for US Am­bas­sador in Ni­cosia.

Gar­ber told the US Se­nate Com­mit­tee on For­eign Re­la­tions, if her nom­i­na­tion is con­firmed, she would work to ad­vance in Cyprus the fun­da­men­tal US in­ter­est in a Europe whole, free, pros­per­ous, and at peace.

“This is an im­por­tant time for Cyprus...It is at this place that US na­tional in­ter­ests in an­chor­ing the Euro-At­lantic Al­liance, se­cur­ing the East­ern fron­tier, and sta­bi­liz­ing the South in­ter­sect.

Our com­mit­ment to en­cour­ag­ing the lead­ers of the Greek Cypriot and Turk­ish Cypriot com­mu­ni­ties to forge a just and last­ing set­tle­ment re­mains as res­o­lute as ever,” Gar­ber said.

She said the Repub­lic of Cyprus is a val­ued friend and im­por­tant strate­gic part­ner with whom the US co­op­er­ate on a range of pri­or­i­ties, in­clud­ing coun­tert­er­ror­ism, mar­itime se­cu­rity, and law en­force­ment.

On the dis­cov­ery of nat­u­ral gas re­sources in the East­ern Mediter­ranean, in­clud­ing off­shore Cyprus, Garver said this find has ex­panded pos­si­bil­i­ties for in­creas­ing re­gional en­ergy se­cu­rity through di­ver­si­fi­ca­tion of re­sources, routes, and sup­pli­ers.

“We have em­pha­sized our sup­port of the Repub­lic of Cyprus’ right to de­velop hy­dro­car­bon re­sources in its Ex­clu­sive Eco­nomic Zone. We also be­lieve the re­sources should be shared eq­ui­tably be­tween both com­mu­ni­ties within the con­text of an over­all set­tle­ment.”

“Hy­dro­car­bons have the po­ten­tial, if man­aged cor­rectly, to be a cat­a­lyst for in­creased co­op­er­a­tion, for en­hanced re­gional sta­bil­ity and pros­per­ity, and should serve as an in­cen­tive to a Cyprus set­tle­ment,” Gar­ber said.

Cyprus has pushed ahead with ex­plor­ing for off­shore en­ergy re­sources de­spite the col­lapse in 2017 of talks to end the coun­try’s decades-long di­vi­sion.

That has an­gered neigh­bour­ing Tur­key, which has had troops sta­tioned in the coun­try since 1974 when it in­vaded and oc­cu­pied its north­ern third in re­sponse to a coup spon­sored by the mil­i­tary junta then rul­ing Greece.

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

ENI had to aban­don a sched­uled drill for gas south of Cyprus in Fe­bru­ary 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.

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

Cyprus aims for nat­u­ral gas to start flow­ing to Egypt’s LNG fa­cil­ity in 2022, there­fore gen­er­at­ing its first rev­enue from nat­u­ral gas in the same year.

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