ExxonMobil to drill offshore Cyprus in Q4
US energy giant moves ahead amid renewed Turkish threats against Nicosia
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
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.