The Cyprus government and the consortium of companies ExxonMobil Corporation and Qatar Petroleum signed on Wednesday the exploration and production sharing contract for Block 10 of the Exclusive Economic Zone of the Republic of Cyprus.
The contracts were signed in the presence of the Ministers of Energy, Foreign Affairs, Finance and Labour of the Republic of Cyprus. Before the signing of the contracts, the representatives of the consortium had a meeting with Cypriot President Nicos Anastasiades at the Presidential Palace in Nicosia.
In his remarks at the signing ceremony, Minister of Energy Yiorgos Lakkotrypis welcomed the commitment by the ExxonMobil and Qatar Petroleum consortium, expressed in the morning to the President of the Republic, to the drilling of their first exploration well within 2018.
He also referred to a successful 3rd licensing round, saying that “by exercising our sovereign rights, we believe we have clearly achieved the target set by the Government to attract oil and gas companies with extensive experience to operate in our EEZ”.
“The strategic significance of ExxonMobil’s and Qatar Petroleum’s presence in the EEZ of Cyprus and, for the first time, in the Eastern Mediterranean region, is immense, especially when considering their financial depth and calibre of expertise in the field of hydrocarbons and LNG”, he said.
He added that the goal to advance the exploration of Cyprus` EEZ was achieved in that a total of twelve exploration wells will be drilled in the newly licensed Blocks 6, 8 and 10.
Moreover, he said that of equal importance to Cyprus are the financial benefits arising from signing the three new Exploration and Production Sharing Contracts. Initially, the Republic of Cyprus will receive as signature bonuses a total of €103,5 million.
Pointing out that Government invests also in the development of Cyprus’ human resources, he said that the Ministry has secured an annual substantial amount for education and specialization purposes of local staff, as well as young people.
“We firmly believe that investing in our human capital is a prerequisite for Cyprus to become a true energy hub in the Eastern Mediterranean”, said Lakkotrypis.
Senior Vice President of ExxonMobil Corporation, Andrew Swiger, said that Exxon Mobil is proud to be working with the Government of Cyprus and Qatar Petroleum in this project.
“Today marks a critical milestone in our journey together but we realize that there`s still much work ahead”, he added.
Referring to the next steps, he said that sophisticated 3D seismic surveys will help the consortium determine the best drilling locations on the block.
“Following this we will work towards drilling our first exploration well in 2018. Once the results are evaluated, we will know the full extent of the resource potential. We are confident that our work here, if successful, will bring significant long term benefits to Cyprus, which can be realized with continued support and encouragement from the Cypriot government,” he added.
He acknowledged that success in reaching this key milestone has been made possible by the government`s strong leadership. He noted that he was encouraged by the openness, transparency and cordiality of the bidding and recognition process.
Answering questions from the press, he said that the company likes the prospects and the geology of Block 10.
President and CEO of Qatar Petroleum, Saad Sherida Al-Kaabi, said that “this agreement expands our international upstream footprint into the Eastern Mediterranean for what we hope is one of the most promising opportunities in the area”.
He said that they have witnessed an excellent and professional process, during the licensing process, that was very transparent and with a lot of integrity. The process, he noted, was very swift, adding that he had never seen such a fast and professional process in many places around the world.
The contract includes a commitment from the Exxon Mobil-Qatar Petroleum consortium to acquire 3-D seismic data, drill two exploration wells in the first license period and work with the government of Cyprus to build skills and strengthen understanding of the petroleum business through focused training programs. The companies have begun planning for drilling operations and intend to drill a first exploration well in 2018.
The other applicants selected in the third licensing round are the consortium of ENI and Total for Block 6 and ENI for Block 8 of Cyprus` EEZ./ΙΒΝΑ