Total to clinch 50% of block 8

Financial Mirror (Cyprus) - - FRONT PAGE - French en­ergy giant and ENI will ex­pand joint ven­tures off­shore Cyprus By Char­lie Char­alam­bous

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


and Greece.

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

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.