Energy giant Total and Cyprus agree to extent exploration

Energy giant Total and Cyprus agree to extent exploration

Nicosia, March 12, 2015/ Independent Balkan News Agency

By Kyriacos Kyriacou

The Cabinet has given the green light for the signing of an agreement between the Republic of Cyprus and French energy giant Total, allowing the company to extend its explorations off Cyprus until 2016, Energy Minister Yiorgos Lakkotrypis said Wednesday.

In January he announced that Total was not able to locate drilling target areas within the blocks 10 and 11 in Cyprus` Exclusive Economic Zone that it has been licensed to explore. Total said it was discussing with local authorities a potential programme of additional exploration works in the area.

“We will have a renewed agreement with Total”. The Cabinet approved a change of the agreement with the company, which will enable them to continue their exploration program to better assess potential energy resources in block 11. After this agreement Total will continue working at least until February 2016” Lakkotrypis, in New York, told the Cyprus News Agency on Wednesday.

Later on Wednesday Lakkotrypis will be the keynote speaker at the Business Forum jointly organized in New York by the Ministry of Commerce, the Cyprus Chamber of Commerce and Industry, the Cyprus Investment Promotion Agency. A reception will follow hosted by the Cyprus-US Chamber of Commerce in honour of the Minister.

Asked how the fall in oil prices internationally would affect the use of Cyprus` energy reserves, the Minister said that the first revenue will come in the coming years and will not be immediate.

Lakkotrypis said the price which Cyprus will sell the gas at will be tied to the price of Brent crude oil, so if the income comes in the years ahead, one should look at the forecasts of oil prices. There is of course, he added, the issue of investment companies, “but if projects like the ones we are currently debating are viable and competitive, investment should not be an issue.”

Asked how these efforts are impeded by threats and tension created by Turkey, Lakkotrypis said that he had informed his interlocutors about Turkish violations and the reasons which have led President Nicos Anastasiades suspend his participation in the negotiations for a Cyprus settlement.

Lakkotrypis expressed the hope that the talks will resume the soonest, under the proper preconditions. He also said that none of his interlocutors had said there would be no investment as long as a solution to the Cyprus issue and the Turkish threats are pending.

The Cypriot Minister will meet with the leadership of Noble Energy to discuss issues pertaining to the development and exploitation of the natural gas field in block 12 of Cyprus’ Exclusive Economic Zone.

In late 2011 Noble Energy announced a discovery offshore Cyprus with estimated gross mean resources of 5 Tcf, and is currently studying options for development. In 2015, it anticipates a deep oil test in the Levant Basin.

Cyprus is currently developing natural resources discovered within its EEZ, and several international companies are involved in hydrocarbon exploration and exploitation activities.

Exploration and appraisal drilling in “Aphrodite”, in block 12 by Noble Energy and Delek has shown estimated reserves of 3.6 Tcf to 6 Tcf, namely 5 Tcf.