Total to clinch 50% of block 8
French energy giant Total is close to sealing a 50% stake is exploiting block 8 offshore Cyprus as part of a strategy to expand its operations in the island’s energy search.
Block 8 is licensed to Italy’s ENI for exploration and now Total wants to be a part of that venture – it has already joined forces with the Italian firm in two other blocks off Cyprus.
The issue was discussed behind closed doors in parliament this week where MPs were informed by Energy Minister George Lakkotrypis that Total had applied for a 50% share in block 8.
The move being approved by the government is expected to be nothing more than a formality.
This will be the third block, after 6 and 11, where the French and Italian companies will cooperate.
An exploratory drill conducted in block six in January 2017 revealed a “promising discovery” with geological structures similar of those in the nearby giant Zohr gas field in the Egyptian EEZ.
Parliamentary energy committee chair Angelos Votsis said cooperation between the Italian and French giants would expand across Cyprus’ exclusive economic zone (EEZ).
“We expect similar moves of cooperation between Total and ENI in other blocks and that can only be a positive step which we welcome,” said Votsis.
He said US-based company Noble Energy was still in consultation with the government over renegotiating the terms of their contract due to the steep decline in the price of oil since the original terms were agreed.
“This cannot be ignored, and the government should take all factors into account and think fairly, correctly and rationally,” said Votsis.
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.
Moreover, an ownership squabble over Aphrodite is threatening to delay multi-billion dollar plans to turn the eastern Mediterranean into a major energy hub. One tip of it stretches across Cyprus’ EEZ into Israel’s maritime zone.
At stake is 7-10 billion cubic meters of gas worth close to $1.5 billion, according to one recent estimate in Israel.
That is less than 10 percent of Aphrodite’s total reserves and a fraction of the gas already discovered in Israel.
Israel says it will not give up on the gas and the companies operating on the Israeli side are ready for legal action in case Aphrodite is developed without them.
Nicosia says its trying to resolve the matter amicable and will resort to independent arbitration if necessary.
Also involved in developing Aphrodite are Israel’s Delek Drilling.
They are looking to sell the gas domestically and abroad, with a focus on Egypt, where Shell has a liquefaction plant.
The field is also meant to be a link in the 2,000 km pipeline being planned by IGI Poseidon, a joint venture between Greece’s natural gas firm DEPA and Italian energy group Edison, to carry Israeli and Cypriot gas to western
A final investment decision on the pipeline, with an expected price tag of up to EUR 6 billion, may come next year.
Complicating the matter negotiate a deal with Egypt untapped.
Disy MP Andreas Kyprianou said an agreement with Egypt to acquire Aphrodite gas was in the “final stages”.
“As is well known there is a problem in relation to Israel claiming part of this reservoir but we are in a good discussion process to finding a solution,” said Kyprianou.
Critics say the government has mismanaged the disagreement with Israel and allowed it to fester over the past seven years.
“This is indicative of our government’s failure to do everything necessary to develop these gas deposits,” said Akel MP Costa Costas. He said instead of the government being pro-active in the mitigating the fallout over the Aphrodite dispute it was more concerned about PR.
US energy giant ExxonMobil – with Qatar Petroleum – is scheduled to conduct drilling off Cyprus in the second half of 2018.
Turkish President Recep Tayyip Erdogan has warned foreign energy companies not to “overstep the mark” in the Mediterranean after Turkey’s warships blocked an ENI drillship on February 9.
Since that incident both ENI, Total and ExxonMobil have said they are committed to honouring their license agreement with the Republic of Cyprus.
This week, Ankara dispatched its first drillship to explore for gas offshore in the Mediterranean Sea between Turkey and Cyprus.
The drill rig named Fatih, formerly called Deepsea Metro 2, should reach its destination off Antalya in early June – where it will drill at a depth of 2600 metres.
Turkey had sent a survey ship to map the sea area for hydrocarbons close to Cyprus’ EEZ in April. is to that Nicosia is export Cyprus trying gas – to yet