Saturday, March 14, 2015

Egypt, a country at the heart of Eni’s strategy | ENI

Published: 14/03/2015, 11:00
Last update: 14/03/2015, 11:00

Egypt, a country at the heart of Eni’s strategy

Eni has signed a framework agreement with Egypt for an estimated value of $5 billion for the development of the country’s oil resources. The investments  will be used to implement projects over the next four years aimed at the development of 200 million barrels of oil and around 37 billion cubic metres of gas. The agreement between the Egyptian  Minister of Petroleum and Mineral Resources, Sherif Ismail, and Eni chief executive, Claudio Descalzi, was signed during the Egyptian Economic Development Conference held in Sharm el-Sheik. Egypt  remains at the heart of the Eni Group’s international strategy; an alliance that has lasted for more than 60 years.

Our activities

Eni has been operating in Egypt since 1954. In the country the Six-legged Dog is the leading international  hydrocarbons operator, with aproduction level of around 206,000 barrels of oil equivalent per day, around 28% of annual oil production and 27% of annual gas production in the country.
Among the most recent activities, was the launch of production at the Deka project in August 2014 and the discovery of oil and gas at the Melehia West Deepexploration prospect in the Western Desert, 300 kilometres west of Alexandra.

Our presence

Photogallery

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immaginiThe photo gallery contains 10  images.

The fundamental steps in our presence in the country

Black Gold in the Red Sea

The  1962 film, directed by Vittorio Gallo, offers an overview of the activities of COPE, Compagnie orientale des petrole d'Egypte, that highlights the “Mattei Formula”, the integration of Italian and Egyptian technicians and workers, respect for the Muslim faith (the construction of a small mosque at the oil field). An Arabic-language version of the documentary was also made.

The Mattei Formula

In December 1954 the agreement with Egypt shook the foundations of the world’s oil business.
In contrast to the “colonialist” contracts offered by the leading international oil companies, in the 1950s Eni decided to rebalance the existing standards byestablishing an equal relationship with producer countries and creating the basis for a model for responsible economic development.
The agreement foresaw the direct involvement and equal decision-making powers for the producer countries of crude oil through the creation of joint ventures and intense professional training of local technicians and managers. Mattei was fond of saying that "The oil is theirs", convinced that it was necessary to make the producer countries autonomous in terms of energy supplies and preferring the path of dialogue and respect for local cultures.
This relationship underpins what Eni today describes as a commitment to sustainable development.

The Egypt of the future seeks energy autonomy

To return the rate of development to pre-revolution levels, the Egyptian President Al Sisi is focusing on the energy sector in order to reduce, within five years, the country’s dependence on external resources by making the best use of the oil and gas fields identified in the Nile Delta and completing, in record time, the project to widen the Suez Canal.  
Despite ongoing internal political tensions, al Sisi has been able to approve and push forward in recent months a number of ambitious plans, above all in the economic sphere, in order to give back to the country a central role in the delicate regional geopolitics and, at the same time, to exploit the full potential of its unrealised energy resources


Source: http://www.eni.com/en_IT/media/focus-on/focus-on-egypt.html

NEW GREEK GOVERNMENT OUTLINES GAS STRATEGY | Natural Gas Europe

March 14th, 2015

NEW GREEK GOVERNMENT OUTLINES GAS STRATEGY

The Athens Energy Forum 2015 outlined the basic principles of the new Greek government's natural gas policy. Panagiotis Lafazanis, Greece's Minister of Energy, outlined the most important aspects and highlighted that the policy is going to be independent, multidimensional and active.
The Forum attracted more than 600 participants and delegates from all major state and private organizations in Greece as well as high level delegations from the US state department, BPNaftogaz,Edison and other important world energy players. The Greek Minister emphasized that an EU approach is against any neo-liberal energy strategy and in particular, he held a negative stance against privatizations of key sectors of the energy sector, including strategic gas installations and corporate structures.
Furthermore he pointed out that the emerging gas routes should have as a basic principle to increase interdependence and collective productive collaboration of the countries in between and not to be used as leverage by larger geopolitical powers against weaker partners. Further, he expressed his governments opposition to the new initiative by the EU's Commission regarding the proposed Energy Union clauses that will oblige member states to submit for approval all of their bilateral energy agreements with any other country or corporation. In that sense, Athens sends a clear cut message that has also been sent by other EU countries, which calls for a stop in the centralization of power to the so-called "Eurocrats" and is also inexorably related to the EU's relations with Russia, Azerbaijan and other natural gas producers and traders.

The Greek Minister also explained that the urgent priority of the new administration is to announce the sea zones in its Exclusive Economic Zone (EEZ) along with successive agreements with neighbouring states for the purposes of large scale research and exploration projects. In reality, these zones refer to those in between Greece and Cyprus which are, at the moment, contested by Turkey, resulting in diplomatic brinkmanship between Athens and Ankara.
The director of SYRIZA's party energy sector, Thodoris Kitsakos, relayed that the main target of the government is to make Greece a major gas hub by attracting not only TAP pipeline but also the proposed Turk Stream, along with interconnections with all neighboring countries, so as to achieve a maximum flow of 60 bcm per annum. This will transform Greece into a major gas hub not only for the Balkans but for the rest of Europe as well.
The former Deputy Minister of Energy and a past president of the DEPA Company, Makis Papagerorgiou, discussed his approach by stating that the government has 'fuzzy' policy regarding the privatization of DESFA to Azeri SOCAR and it obstructs, to an extent, the process of the TAP project by requesting last minute changes. He said that his previous administration had already managed to secure a 5% share in TAP that could be exercised in due term and also criticized the government for failing to liberalize the market of the natural gas sector, whilst it condemned the trials of the government to change the rules of the game as he sees it.
Minister Lafazanis nonetheless fully backed TAP and pointed out that changes that will enchase the Greek position, which is the unquestionable major transfer corridor should be made for the benefit of the local communities and the state budget. He explained that these requests to the consortium have already been positively met in principle and he expects further clarifications soon upon those.
At that point it should be noted that just before the Athens Energy Forum 2015, Panagiotis Lafazanis met with the VP of SOCAR Elshad Nazirov to discuss the ongoing sale of the DESFA transmission Gas Company to SOCAR. Nazirov had already publicly denied the three major changes requested by Lafazanis concerning TAP and which were transfer fees to be paid, decrease in the price of gas to be sold to Greece and involvement of DEPA as shareholder in the consortium.
Nevertheless, both sides agreed to establish a joint bilateral committee that will examine said requests.  It should be noted that the rest of the partners in the pipeline project appear positive regarding Greek demands. Meanwhile the other sensitive subject, that of privatization, was barely touched upon. This is due to the fact that it has been essentially "frozen" due to the EU's adamant approach into denying access to SOCAR by proclaiming possible violations of the Third Energy Package.
The privatization has been ongoing since mid-2013 when the Azeri side paid a10% pre-payment of the overall  €400 million price tag for acquiring 66% of DESFA. They have time to withdraw from the competition by summer 2015 and gain back their down payment, which looks to be the most probable outcome.
Thus it is becoming clear after the consultations between the concerned sides and the public rhetoric that was heard in the Forum, that the DESFA privatization is essentially terminated at that stage, whilst TAP's construction which is set to enact in 2016, is ready to go.



Source: http://www.naturalgaseurope.com/new-greek-government-outlines-gas-strategy-22680

Thursday, March 12, 2015

Hydrocarbons sector to move from ‘exploration to exploitation’ | Cyprus Mail

 19 Comments

Hydrocarbons sector to move from ‘exploration to exploitation’

Hydrocarbons sector to move from ‘exploration to exploitation’
By Staff Reporter
Several developments in the hydrocarbons sector are expected in the coming weeks, Energy Minister Giorgos Lakkotrypis said on the sidelines of an investment forum in New York on Wednesday night.
Talking to the press after giving a speech at the Harvard Club of New York City, Lakkotrypis said Noble Energy officials were due in Cyprus next week and are expected to present their final development plan for the Aphrodite field. Also he said the annual report of Delek was due, which according to him would contain important information on the declaration of commerciality for the Aphrodite field .
The consortium of Noble and Delek, holds the right to explore Cyprus’ Aphrodite offshore block 12, in the Republic’s Exclusive Economic Zone (EEZ) as well as Leviathan and Tamar gas fields of Israel.
“We will have several developments in the energy sector in the coming weeks,” said the minister.
“We will have the declaration of commerciality of the Aphrodite field, which will be a groundbreaking development for Cyprus, and all of this will happen in the next two weeks.”
He said Cyprus would be moving from the stage of “exploration to exploitation”.
Lakkotrypis met officials from both companies on Wednesday and said all parties were in complete alignment on the way forward.
The most important step after the declaration of commerciality would then be the resulting trade agreements “where there is still much work to be done”.
“Right now we are aiming at two main markets… the Cypriot one, the Egyptian one mainly, and perhaps the Jordanian,” he added.
“It is not yet clear who will be the final customer,” he said.
The minister referred to the importance this week of President Nicos Anastasiades’ visit to Sharm El Sheikh for the International Conference on the Economic Development of Egypt.  He said Cyprus was in the final stages of discussions on the sale of gas to Egypt.
During his speech as the Harvard Club, an event organised by his ministry, the Cyprus Chamber of Commerce and the Cyprus Investment Promotion Agency,  Lakkotrypis  spoke of investment opportunities in Cyprus, and the island’s comparative advantages as a business centre.
He focused on the opportunities in energy and tourism, including plans for a casino resort.
On energy, he spoke in terms of a future based attracting companies to conduct research, and for infrastructure such as US firm Halliburton, on revenues from drilling and the creation of Cypriot expertise in the field.
“We hope and look forward to the coming weeks to move from the phase of exploration to the exploitation phase and attracting investors,” he said.
Lakkotrypis also spoke about the development with France’s Total, which he said was close to extending an offshore natural gas exploration programme in Cyprus after coming up empty in prior surveys. A renewal agreement is due to be signed next week that will focus on geological surveys in a different area but no drilling.

Source: http://cyprus-mail.com/2015/03/12/hydrocarbons-sector-to-move-from-exploration-to-exploitation/

Monday, March 9, 2015

Israeli-Greek-Cypriot Alliance Challenges Turkey in the Med | Arutz Sheva 7 - Israel National News

Economic issues in Athens and partnerships to extract natural gas keep far-left Greek gov't away from the Israeli-Palestinian conflict.
By Gedalyah Reback, First Publish: 3/9/2015, 5:26 PM


Reuters

Israeli-Greek relations have never been better. Turkey’s pressure on Greek-speaking Cyprus over natural gas drilling has pushed both the Cypriots and the Greeks into an unprecedented defense and economic relationship with Jerusalem. But the relationship could be challenged by Greece’s new far-left government.

After the Syriza party was elected, there was speculation in Israel that their Middle East policy could shift. It was a number of Syriza activists lastsummer who led demonstrations against Operation Protective Edge. Additionally, the party is composed of a number of extremely pro-Palestinian politicians. But other factors have impacted whatever influence those views might have had in reversing Greece’s growing relationship with Israel.

Arutz Sheva spoke to Ambassador Arye Mekel, former Israeli Ambassador to Greece and currently a researcher for the Begin Sadat Center for Strategic Studies, who explained that "Syriza is an alliance of 14 smaller far-left factions. One Deputy Minister even participated in one of the flotillas to Gaza."

Turkey Eclipses the Palestinians

Greece is very close to Cyprus, the Greek-speaking island nation also sitting on the same batch of natural gas fields as Israel. But the island is divided; in 1974, Turkey invaded and occupied the northern half of the island and created a separate enclave for the Turks that moved there.

Turkey’s claims that some gas fields belong to Northern Cyprus, a "state" whose independence only Turkey recognizes, threatens Cyprus’ ability to extract natural gas from the Mediterranean. With that in the background and relations between Israel and Turkey in the cold, Israel and Greece have expanded their military relationship.

Thanks to the inclusion of the right-wing ANEL party in the coalition, whatever fear people have had Syriza might roll back ties with Jerusalem has been alleviated.

At the end of February, ANEL’s party leader Panos Kammenos announced plans for new joint military exercises with Israel and Cyprus.

Kammenos said in February: "Defense planning should take into account friends and allies which seek defense cooperation in the region. And I clearly I mean eastward toward Israel."

Still, Ambassador Mekel did not see the tensions with Turkey as an overarching problem for Greece.

“There was a semi-crisis when the Cypriots found some gas and refused to share it with the Turkish Cypriots. The Turks sent warships to the area, but in the end it amounted to nothing and the Cypriots continued their drilling.”

“Kammenos himself is well known to us. Kammenos has always been friendly with us (Israel), especially some years ago when he was a Deputy Minister for Shipping when we had some problems in that area.”

“This past summer we stationed for the first time a military attaché, a Colonel, in Athens. I don’t see any deterioration any time soon.”

He did not address Kammenos’ comments that recent Turkish exploratory missions off the shore of Cyprus were the main motivation for the newexercises and whether or not they actually were significant to provoke the new exercises. What seems to matter more is that for Kammenos they certainly do matter.

Three-way Economic Agreements

Still, there is plenty of economic cooperation on energy that binds Israeland Greece. There has been talk of mutual drilling projects, pipelines and expansion of infrastructure in other areas linking Israel, Greece and Cyprus. One of them is the laying of a new 2,000-megawatt underwater cable that will link Cyprus’ and Israel’s electrical grids to each other and to Europe. The defense relationship is directly related to Turkey’s threats to cease gas fields from Cyprus on behalf of Northern Cyprus.

Israel signed a tentative understanding with Greece on natural gas back in 2011, but delays in the Israeli courts have kept that understanding from becoming a full-fledged agreement. A December 2014 decision by the commissioner of Israel’s Anti-Trust Authority to break up the cartel controlling the Leviathan gas field had caused stocks in Israel to plunge. When asked if that news had sent a ripple through Greece and upset the earlier understanding between the two countries, the Ambassador did not see it as agitating Greece.

“Right now there is no harm that can come because there is nothing to harm.”

“There was something very general that was signed. Uzi Landau signed something with the Greeks but it remained on paper.”

He emphasized that the discussions between Israel and Greece have continued for years, but the details have not been outlined in any type of major trade deal or treaty.

“The entire gas saga is not going anywhere for the time being. No one inIsrael has decided how much to export, what to export and to whom to export and by what channels.”

“We had visits from Uzi Landau who was the Minister of Energy and then Silvan Shalom who later became Minister of Energy. I arranged for him a meeting with the Greek Prime Minister but no conclusions came of it. It was a subject of discussions, including when the Greek government held a G2G – government-to-government – meeting with Prime Minister Netanyahu with his ministers.”

Going Forward

Tomorrow night, Ambassador Mekel will join a panel with author Dr. Aristotle Tziampiris to promote the launch of the doctor’s new book on Israeli-Greek relations. He says that for both Dr. Tziampiris and himself, their research has been impacted by the sudden change in government.

“The professor just published a book on Greek-Israeli relations over the last four years. Ironically the government collapsed just as it was coming out.”

With a hint for his optimism that the new Greek government will not be the trouble that some Israelis worried about, Ambassador Mekel said with a chuckle laugh that he was "inconvenienced" by the sudden change in Athens.

“I have been writing my own research on the topic right now. My plan until recently was to write only about the last four years – the great era. Then the government collapsed and Syriza came to power. Now I have to write a whole new chapter about the current government.”

SOURCE

BP makes second “significant” find in Egypt’s east Mediterranean Sea | Energy Voice



BP makes second “significant” find in Egypt’s east Mediterranean Sea



BP

BP Egypt announced today another important gas discovery in the North Damietta offshore concession in the east Nile Delta.
The Atoll-1 deepwater exploration well, currently being drilled using the semi-submersible rig Maersk Discoverer, has reached 21,000 feet depth and penetrated about 164ft of gas pay in high quality Oligocene sandstones.
Expected to be the deepest well ever drilled in Egypt, the Atoll well still has another 1,100 yards to drill to test the same reservoir section found to be gas bearing in BP’s significant 2013 Salamat discovery, about nine miles to the south.
BP chief executive Bob Dudley said: “Success in Atoll further increases our confidence in the quality of the Nile Delta as a world class gas basin.
“This is the second significant discovery in the licence after Salamat. The estimated potential in the concession exceeds 5trillion cubic feet and we now have a positive starting point for the next possible major project in Egypt after BP’s west Nile Delta project.”
Hesham Mekawi, BP North Africa regional president, added: “The Atoll discovery is a great outcome for our second well in this core exploration programme in the east Nile Delta.
“It demonstrates BP’s continuous efforts to help in meeting Egypt’s energy demands by exploring the potential in the offshore Nile Delta.
“We are proud of our commitment to unlock Egypt’s exploration potential that requires large investments to utilise using the latest drilling and seismic technologies.”
Atoll-1 was drilled in 3,028ftwater depth around 80km north of Damietta city, 50 miles north of Salamat and only 28 miles to the north-west of Temsah offshore facilities. BP has 100% equity in the discovery.


Source: https://www.energyvoice.com/oilandgas/75211/bp-makes-second-significant-find-in-egypts-east-mediterranean-sea/

LEBANON: THE NEXT EASTERN MEDITERRANEAN GAS PRODUCER? | Natural Gas Europe



LEBANON: THE NEXT EASTERN MEDITERRANEAN GAS PRODUCER?

A policy brief entitled Lebanon: The Next Eastern Mediterranean Gas Producer?, published by the German Marshall Fund and authored by Bassam Fattouh, director of the Oxford Institute for Energy Studies and professor at the School of Oriental and African Studies, and Laura El-Katiri, research fellow at the Oxford Institute for Energy Studies addresses Lebanon’s challenges in its path towards natural gas production, discusses the benefits that gas production could bring Lebanon and assesses various export scenarios. The report issues recommendations for Lebanon to achieve a sound management of future gas revenues and maximize the economic benefits of its hydrocarbon wealth.
The report highlights the fact that although no exploratory drilling has been conducted yet, the wide range of estimates (varying between 25 to 95.5 Tcf of gas), is indicative of the considerable uncertainty surrounding the subject. The government is keen to diversify Lebanon’s energy mix away from oil to strengthen its security of supply and to reduce air pollution, but gas production is not likely to begin before the mid- 2020s, adds the report. Currently, the share of natural gas in the fuel mix of the power sector has fallen to zero. We will summarize below the main findings of the report.
1.Domestic hurdles
The major challenge for Lebanon is the domestic political climate that has led to repeated delays in the launching of the country’s first licensing round. According to the report, Lebanon’s hydrocarbon sector and its institutional and regulatory framework are still in their infancy. The report identified the country’s weak administration, its widespread corruption, and its poor business climate as the most challenging hurdles to overcome.
2.Partial regulatory progress
The report listed the regulatory progress achieved so far and highlighted the pending legislations to be issued for Lebanon to move forward: Lebanon adopted the Offshore Petroleum Resources Law in August 2010 (Law 132), which provides the legal and institutional framework for the exploration and exploitation of offshore oil and gas resources in Lebanon. This was followed in April 2012 by Decree 7968/2012, establishing the Lebanese Petroleum Administration (LPA) as the body responsible for the management, monitoring, and supervision of petroleum activities, including the issuing of licenses and the implementation of agreements. The LPA, however, is not an autonomous body and falls under the tutelage of the Ministry of Energy and Water Resources and, indirectly, is reliant on the Council of Ministers for key decisions regarding the hydrocarbon sector. In February 2013, the government issued Decree 10289/2013, setting out the Petroleum Activities Regulations for Lebanon, which provide the basic guidelines for Lebanon’s hydrocarbon sector. The decree stipulates requirements for license applications and the scope of agreements with energy companies. The appointment of the members of the LPA and the passing of these decrees paved the way for the launch of a prequalification round at the beginning of 2013. The response to the government’s call for expressions of interest demonstrates the commercial attractiveness of Lebanon’s potential offshore energy resources for international investors. Some 50 international companies registered interest, which is high, especially when compared to earlier bidding rounds in Israel and Cyprus, which faced political constraint. Two decrees are yet to be issued for the country to open its licensing round. The failure to pass these two decrees illustrates Lebanon’s complex domestic political landscape and the difficulty of delimiting Lebanon’s EEZ, in light of the dispute with Israel, which could escalate if either country decided to award blocks in the disputed area, says the report.
3.Domestic political rivalries
Lebanon’s domestic rivalries were identified by the report as the main reason for the delays in the energy sector. Exaggerated expectations created by politicians were also criticized for their detrimental effect on future decisions.
4.A pending maritime border dispute with Israel
Lebanon and Israel have overlapping claims over some 854 square kilometers. The authors of the report warn on the possibility of escalation of the conflict if licenses for exploration were awarded in the disputed area.  
5.Potential benefits from the exploitation of offshore riches
The initial policy priority for Lebanon, when revenues from energy production begin to flow, will be to reduce the state’s debt estimated at 146 percent of GDP in 2014. The report warns however that using resource revenues to reduce public debt may not be possible as expectations have been raised of the availability of future financial resources for public expenditure. There is also a risk that lower interest rates, resulting from reduced debt levels, would provide an incentive for borrowing, producing a credit bubble, adds the report as they benefit richer households and encourage wasteful consumption that could negatively impact the environment.
6.Preliminary work for the sound management of gas revenues
The report suggests that a balanced strategy to manage future gas revenues must be put in place. A sovereign wealth fund will ensure those revenues are saved for future generations while the remaining funds should be allocated to reduce public debt, directed to public investments and transfer payments. The report stresses on the importance of managing public expectations to relieve pressure from decision-making and ensure sound and realistic decisions are taken.
7.On the export quota
The report highlights the importance of meeting domestic demand first before allocating a portion of the gas discovered to export markets. Natural gas independence will ensure a saving of up to $1.9 billion on the annual energy bill (as estimated by the Ministry of Energy) and significant environmental benefits, adds the report.
8.Interim solutions to meet domestic demand
The disruption in the flow of Egyptian gas to Lebanon led to the signing of a deal between Lebanon and Syria in 2003 to import Syrian gas at a level of around 1.5 bcm of natural gas per year, according the report. Insufficient gas production and civil unrest have prevented Syria from meeting its domestic demand and its export obligations. The report highlights that importing gas from Israel would make commercial sense for Lebanon but because of the state of war between the two countries, it is not a feasible option. Lebanon could import gas in the form of LNG but would have to incur the high costs attached to the construction of an onshore regasification terminal due to the complex geopolitical landscape that make the pipeline option complex.
9. Lebanon’s export options
The report highlights Lebanon’s strategic positioning, ‘with good coastal and land access’, which gives it a natural advantage for export. Many factors will contribute in deciding Lebanon’s export strategy, including as stated in the report: the size of its reserves, domestic and foreign demand, export targets, the cost of Lebanese gas production, price, and competition, as well as the availability of finance for pipelines or LNG facilities to bring the gas to market. The timing of Lebanon’s entry into the export market will also largely determine its export markets. Regional markets (Jordan and Egypt) may slip away to the benefit of Israel should Lebanon delay its entry further, warns the report. Exporting gas via LNG would offer the flexibility in the choice of the export market but largely depends on the size of the discoveries. Only substantial amounts of recoverable gas would justify a 2-train facility, explains the report. By the time Lebanon is ready to exports, new players may block Lebanon’s entry. Energy partnerships with Egypt and Cyprus could be attractive to Lebanon. Exporting gas via pipeline to regional customers (including Egypt, Turkey, Syria, Iraq and Jordan) could be an option if the size of the discoveries does not permit an LNG investment. However, Israel is currently in talks to export some of its gas to Egypt and Jordan. In the event Israel overcomes its regulatory hurdles (including a dispute with the Antitrust Authority), and those deals come to fruition, Lebanon may not be able to acquire those countries as customers.
10.The benefits of the successful development of Lebanon’s gas resources
According to the report, the successful development of Lebanon’s gas resources could ensure energy security and lift the economy. The shift from heavy fuels to gas will also have environmental benefits, adds the report.
11. Challenges ahead
Establishing a sound regulatory framework and ensuring the efficient and transparent management of future gas revenues are major challenges, highlights the report. The report adds that political climate may cause further delays in exploration and production and it is questionable whether full transparency in the process can be achieved. A plan to manage future gas revenues needs to be put in place such as setting up a sovereign wealth fund. Drawing on the experience of existing energy producers (such as the US and Norway) comes highly recommended in the report. The EU is supportive of regional cooperation and can assist Lebanon in managing offshore incidents and maximizing the benefits of its hydrocarbon wealth.


Source: http://www.naturalgaseurope.com/lebanon-the-next-eastern-mediterranean-gas-producer-22534