EMAS AMC Gets LOA from Noble Energy for Gunflint Project in GOM | Rigzone

EMAS AMC Gets LOA from Noble Energy for Gunflint Project in GOM

by  Ezra Holdings Ltd.

|

Friday, April 11, 2014

Ezra Holding Limited, an offshore contractor and provider of integrated offshore solutions to the oil and gas (O&G) industry, disclosed Friday that its operating brand EMAS has received a Letter of Agreement (LOA) from Noble Energy for the Gunflint Project in the Gulf of Mexico (GoM). Under the terms of the agreement EMAS’s Subsea Services division, EMAS AMC has been nominated to perform the offshore installation of pipelines, umbilicals and ancillary equipment for the Gunflint Project in the Mississippi Canyon area of the US GoM in water depths in excess of 6,561 feet (2,000 meters). The pipelines will be installed with EMAS AMC’s flagship vessel the Lewek Constellation while the EMAS Marine Base in Ingleside, Texas will be used to perform the pipe stalking and fabrication of various subsea structures. Project preparation activities have already commenced and offshore works are scheduled to be carried out during 2015. “I would like to express my sincerest appreciation to Noble Energy for their vote of confidence by awarding this important project to us,” said Lionel Lee, EMAS’s Group CEO and managing director. “The Gunflint project is another significant milestone for us as it is a testament to the growth and current capabilities of EMAS AMC. It affirms that our combined engineering and asset capabilities, including our flagship construction vessel Lewek Constellation, are being endorsed by the industry to execute challenging subsea projects anywhere in the world. “It is also the second major contract awarded to us by Noble Energy, following our successful work for the Noble Tamar Project and I look forward to working with Noble again and deliver a mutually successful outcome on Gunflint.” The Group has secured more than $300 million subsea contracts since the beginning of 2014, with the subsea backlog standing at more than $1.4 billion to date.

- See more at: http://www.rigzone.com/news/oil_gas/a/132519/EMAS_AMC_Gets_LOA_from_Noble_Energy_for_Gunflint_Project_in_GOM#sthash.601cXf9L.dpuf


Link to source: http://www.rigzone.com/news/oil_gas/a/132519/EMAS_AMC_Gets_LOA_from_Noble_Energy_for_Gunflint_Project_in_GOM

LNG plant talks finally back on track | Cyprus Mail

Signing the MoU

By Elias Hazou | 9 April 2014

FACE-to-face talks between the government and Noble Energy on the construction and operation of an LNG plant are finally back on track.

A government-appointed negotiating team – which includes the Cyprus Hydrocarbons Company – was set to hold meetings with the Texas-based firm on Tuesday and again on Wednesday.

The negotiations between the government and the Block 12 partners – Noble, Delek and Anver – are aimed at concluding a final project agreement for an LNG terminal.

Is Libyan Energy Ready For A Comeback? | Forbes

4/09/2014 @ 9:39πμ 

Is Libyan Energy Ready For A Comeback?

After eight months of delays and closures for Libya’s energy sector, rebel groups finally announced some progress in talks with the country’s current government. Having occupied a number of oil and gas facilities for months, protesting an array of grievances, the groups had stifled Libya’s energy output, costing the country’s an estimated $7 billion in lost revenue by reducing exports to just 85,000 barrels per day, down from 1.6 million bpd the day before the Arab Spring uprising.

Without offering too many specifics, government officials announced that two ports would re-open this weekend and talks would continue towards reopening two others within two to four weeks. The first two ports, at Zueitina and Hariga, would add 110,000 bpd and 70,000 bpd, respectively, to the country’s overall output. The latter two would represent a much larger boost to the country’s beleaguered but vital energy landscape, with about 560,000 bpd added between the Es Sider and Ras Lanuf facilities.

Although state officials in Tripoli have downplayed the impact of the closures on the government’s overall financial standing, the reopenings are welcome news for an economy so heavily dependent on energy revenue. The Central Bank announced this week that they had enough in foreign reserves to carry the government for up to three years without another cent in energy earnings, however, Libya is especially reliant on the sector, with about 95% of government revenues coming from oil and gas sales.

Despite such progress, there is still some concern that Libya’s energy sector recovery is far from certain.

“While on paper this agreement is positive, we will believe in a return in Libyan production when we see it,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas in London, told Bloomberg on April 7th. “Given past experience, the odds are not favorable for a material resumption of Libyan oil supply.”

There are a number of reasons for such concern, chief among them, the fractured nature of the protests movements who have occupied energy facilities throughout the country. Although this week’s announcement signals progress in Libya’s Eastern half, demonstrations have continued in the West, causing further closures.

Even those operating within close proximity have presented varying complaints, including issues tied to political autonomy, energy revenue, access to jobs, corruption allegations and in some cases, separatist movements in the East. While government officials have praised the new agreement as real progress towards opening Africa’s largest proven reserves of oil to the global marketplace, its not yet clear how much progress has been made in addressing the issues that led to the port closures. According to a Reuters report, the draft agreement did not include any mention of “a greater share of oil revenue for their eastern region, known as Cyrenaica”, which has often been a point of contention.

No Rebel Sell

One possible advantage for Tripoli in the current energy standoff is the effect of a recent effort by rebel groups to sell oil directly to foreign buyers without bothering with the government or the National Oil Corporation. Using a North Korean-flagged tanker, the rebels attempted to ship about 200,000 barrels out of the country. Reportedly forced by armed rebels to head east, the ship made it as far as Cyprus before being stopped and boarded by U.S. Navy Seals. More than just a lost opportunity for the rebels to take control of the energy export market on their own terms, the failure sent a message to any potential buyers that the U.S. and international community would not tolerate rogue energy sales. Without potential buyers in play, the Libyan rebels have far fewer options for what to do with the country’s reserves, making an agreement like they announced this week more likely to succeed.

In addition to the port reopenings, this week’s agreement includes a pledge to offer amnesty to the rebels involved in the closures, as well as back-pay for those who left the country’s Petroleum Facilities Guard to take part in the demonstrations.

Link to source: http://www.forbes.com/sites/christophercoats/2014/04/09/is-libyan-energy-ready-for-a-comeback/?utm_source=followingweekly&utm_medium=email&utm_campaign=20140414

Confidence in Hydrocarbon Discoveries From Deloitte (Cyprus)'s Oil & Gas Industry Leader | Gold News

Confidence in Hydrocarbon Discoveries From Deloitte (Cyprus)'s Oil & Gas Industry Leader

Nicos Papakyriacou is confident that the local optimism surrounding Cyprus' hydrocarbon discoveries is justified.

December 03, 2013

Above: Nicos Papakyriacou
Partner in charge of Nicosia office,
Oil and Gas Industry Leader,
Deloitte Cyprus

How significant are the hydrocarbon discoveries for the future of Cyprus?

The recent discovery of hydrocarbons within the island’s Exclusive Economic Zone has attracted a lot of attention internationally and has created a lot of optimism locally about the future.

According to a study by Shell, global energy demand could increase by as much as 80% by 2050.

Therefore, the potential impact of the hydrocarbon discoveries on the future of Cyprus is extremely significant, both on the socio-economic front as well as geopolitically, depending of course on the actual quantity of gas and oil reserves that are confirmed.

Can you expand further on the socio-economic and geopolitical dimensions of such discoveries?

Regarding the socio-economic dimension, in addition to the obvious stream of revenues from the future export of our gas reserves, the emergence of this new industry and the possible direct foreign investment in significant infrastructure projects, such as the LNG Terminal and the pipeline facilities, will create the need for a great number of other support services. These will lead to the creation of thousands of jobs, helping the ailing property market and exerting a favourable domino effect on many sectors of the economy such as financial, professional services and many others. Furthermore, it will reduce the over-reliance of the economy on financial services and tourism and diversify the risk of the economy in the eyes of foreign investors, the rating institutions and the markets in general.

Regarding the geopolitical situation, the discovery of hydrocarbons in Cypriot waters, as well as in the Southern Mediterranean region in general, has added a new dimension to the geopolitics of the region. On the one hand it has created a new dynamic that could be used as a catalyst to promote a solution to the Cyprus problem but, on the other hand, it could create significant complications. Therefore, the historic challenge facing our political leaders is to formulate a common oil & gas strategy that will take into account the interrelated socio-economic and geopolitical factors, which should be the vision of all future governments, irrespective of their political positioning.

Currently the EU produces around 48% of its energy needs within the Union and imports the remainder. Its gas imports are mainly from Russia, Norway and Algeria. Isn't this an area that is perfect for Cyprus to step into?

The EU would certainly welcome the opportunity to diversify its sources of gas imports and reduce its over-reliance on Russian imports and Cyprus could benefit strategically if it is in a position to facilitate such diversification.

However, the issue is not so simple because it will depend on the quantity of gas reserves discovered in Cyprus and the neighbouring countries, the method of exporting to Europe (pipeline or LNG), the prevailing prices of gas in Europe and the Far East and, of course, the geopolitical balances and alliances of the regional players at the time.

The major gas discovery in Block 12 is expected to boost plans to replace oil and coal with gas. How will this affect consumers?

It is expected to help consumers and the Cyprus economy in many ways. For example, the price of electricity for households should be significantly reduced. At the same time, all businesses will also benefit from lower energy costs that will help them become more competitive in the pricing of their products and services for both local consumption and export.

Also, let’s not forget that about two thirds (66%) of the purchase cost of the gas by the power stations will be returned as income to the government instead of being paid to overseas oil suppliers.

Furthermore since gas is a cleaner fuel than oil and coal, it will have lower greenhouse emissions, for the benefit of the community in general.

There are currently no specific tax and VAT laws on hydrocarbon exploration/ exploitation activities in Cyprus. Are the present corporate tax and VAT laws applicable or will new legislation be necessary?

This is correct but the general income tax laws in force are applicable and therefore companies resident in Cyprus are subject to 12.5% corporate income tax on their taxable profits. However, special provisions are included in the model PSC (Production Sharing Contract) which state that the applicable corporate tax will be deemed to be included in the Republic’s share of profit oil & gas and the portion of available oil & gas which the contractor is entitled to will be net of corporate tax. No changes to the existing legislation are expected, but clarifying circulars guiding the companies operating in this industry are expected to be issued at some stage.

Regarding VAT, given the absence of oil & gas industry-specific VAT legislation, Cyprus has generally adopted the main provisions of the EU’s VAT regulations and the system is largely harmonised with that of the EU. Deloitte has worked closely with the authorities in formulating local VAT policies for the newly formed oil & gas industry in Cyprus, following best EU practices, has requested the issue of specific circulars and has obtained rulings on behalf of its clients.

Deloitte has navigated the local tax and VAT laws as they apply to companies and consortia in the oil and gas industry and has supported Cyprus’s first PSC holder in understanding the practicalities of the tax and VAT clauses in the PSC and is advising other PSC holders on their obligations.

Although Cyprus’ natural gas discoveries are recent, your company has been involved in providing services to international companies involved in the sector for some time. What services does Deloitte provide?

In Cyprus, we were involved in the oil and gas industry from the very beginning, serving the first ever exploration company in all facets of its operations with the provision of CRS certification, statutory audit, tax advisory, VAT advisory, human capital services and other advisory work.

As a result of this unique experience and intensive internal training in the oil & gas industry, we have built a very knowledgeable team of professionals, from all service lines, specialising in the oil & gas industry. It is no coincidence that in the last two years we have been providing the major industry players, including all the operators on the island, with most of these services.

How great a role does Deloitte play in the provision of services to the global oil & gas industry?

At Deloitte, we always think ahead to assist our clients in meeting the challenges of our times. We help them by providing a range of services to companies in all segments of the oil and gas industry including 63% of the world’s top 60 oil & gas companies, 43% of national oil companies, and many independents and oilfield services and energy trading businesses. Our Oil & Gas practice, which comprises 2,500 specialists across all sectors of the industry, has an expert presence on every continent and in each major oil and gas centre around the globe.

In addition to the standard tax, audit, consulting and financial advisory services, our range of services spans the entire spectrum of corporate functions as well as analytical price forecasting, economic modelling, geological analysis and reservoir audits, wellhead planning and operations, and deep sea platform and equipment decommissioning, to name a few. Our internal resources ensure that our teams have access to up-to-the-minute market intelligence, can respond promptly to industry developments and are able to provide value added advice to our clients.



With more than 500 professionals in its Nicosia, Limassol and Larnaca offices, Deloitte is one of the largest professional services organisations in Cyprus and part of the Deloitte global network, employing more than 200,000 people in over 150 countries. It provides a full range of audit, tax, consulting, financial advisory and wealth advisory services to a diverse client portfolio and an integrated services offering addressed primarily to the international business community.


 Link to source: http://www.goldnews.com.cy/en/energy/confidence-in-hydrocarbon-discoveries-from-deloitte-%28cyprus%29-s-oil--gas-industry-leader

E. Mediterranean gas work faces geopolitical hurdles | Oil & Gas Journal

E. Mediterranean gas work faces geopolitical hurdles

04/07/2014

By Bob Tippee
Editor

 

Full development of giant natural gas discoveries in the eastern Mediterranean Sea depends on solutions to tough geopolitical problems. Groups led by Noble Energy Inc. have found fields off Israel and Cyprus, most of them in ultradeep water, that might contain 40 tcf of natural gas or more. New production promises to keep Israel, where gas demand is growing by as much as 17%/year, self-sufficient for years.

But future development will push gas deliverability beyond the needs of Israel and its immediate neighbors, with which relations are always touchy. Much new supply will have to be exported in some amount, somehow. While proposals for pipelines and LNG schemes have emerged, they all face problems related to economics or international relations—or both.

Strongly influential in the geopolitics of eastern Mediterranean gas development is Turkey, which also has rapidly growing requirements for natural gas as well as a developing role as a bridge for gas flowing between the Caspian Sea and Europe. Also like Israel, the country has dicey relations with some of its neighbors.

Emerging potential

Deepwater potential in the eastern Mediterranean became evident with the 2009 discoveries of deepwater Tamar gas field and smaller Dalit field.

For Israel, the start-up of Tamar production in March 2013 was especially timely. Output from offshore Noa and Mari-B fields, discovered in 1999-2000 by the Yam Tethys joint venture of Noble, Delek Drilling, and Delek affiliate Avner Oil & Gas Exploration was in late stages of decline. Delivery of Egyptian gas via the short El Arish-Ashkelon marine pipeline, which once filled 40% of Israel's gas needs, ceased in 2011 because of political disruptions in the supply country. Early last year, Israel was importing LNG to meet its gas needs.

Tamar, with a discovered resource estimated by Noble at 10 tcf, now produces an average 750 MMcfd of gas through a pipeline to the Mari-B platform. Peak deliverability is 1 bcfd. Noble plans to expand that to 1.5 bcfd next year, in part by adding compression at the Ashdod onshore terminal, which receives gas from Mari-B.

Tamar production will get a boost from the 2013 Tamar Southwest discovery, which is to be tied back to Tamar facilities for a production start next year. Noble estimates the gross mean resource of Tamar Southwest at 700 bcf.

In February, Noble signed agreements to sell 66 bcf of gas from Tamar field to two industrial customers in Jordan over 15 years. Deliveries will begin in 2016, when pipeline connections are complete. Gas supply has been a problem for Jordan since 2011, when the Egyptian uprising started a continuing series of disruptions to operation of the Arab Gas Pipeline, which carries gas to Jordan and Syria and serves Lebanon via a spur without transiting Israel.

Questions about exporting Israeli gas gained heft with the discovery in 2010 of Leviathan field, which like Tamar lies in more than 5,000 ft of water. With a discovered resource of 19 tcf, Leviathan promises to be able to yield far more gas than Israel and its neighbors need and to receive supplemental supply from several nearby discoveries, including the strategically important Aphrodite strike in Cypriot water.

Fig. 1 shows eastern Mediterranean gas discoveries in which Delek and affiliates hold interests of varying size with Noble. Not shown is the undeveloped Shimshon discovery of 2012 made by a group led by ATP East Med BV. The operator is a unit of ATP Oil & Gas Corp., which entered bankruptcy not long after the discovery because of problems related to the 2010 Macondo blowout in the Gulf of Mexico. The Shimshon well, drilled to 14,445 ft subsea in 3,622 ft of water south of Leviathan and Tamar fields, cut 62 ft of gas pay.

Also not shown on Fig. 1 is a discovery called Gaza Marine made in 2000 by a group led by BG Group off Gaza under a license from the Palestinian Authority. Development has been blocked by Israeli jurisdictional objections and concern about the use of revenue from gas sales.

The discoveries off Israel, Cyprus, and the Palestinian Territory have aroused interest in other coastal countries. Turkey in November 2011 signed an agreement with Shell for exploration in the Mediterranean and in the southeastern part of the country. Lebanon, with territorial waters near some of the Israeli discoveries, passed a hydrocarbons law in 2010 and planned to open its first offshore licensing round last year but has delayed bidding three times because of political conflicts. Part of one of the blocks identified by Lebanon extends into a narrow, 330-sq-mile area of dispute with Israel. Licensing off Syria will be improbable as long as the country remains riven by civil war.

In a future exploratory project with potential to change the eastern Mediterranean play fundamentally, Noble plans in the first half of 2015 to drill a deeper pool test at Leviathan to 24,600 ft in 5,400 ft of water. The target: a Lower Cretaceous sandstone the operator considers oil-prone.

Export schemes

A full menu of schemes for exporting Eastern Mediterranean gas unfolded before anyone knew how much gas legally would be available for transport outside the region. The needed clarification came last year, when the Israeli High Court of Justice upheld a June decision by a committee of ministers capping exports at 40% of total reserves discovered off the country. The decision ended a political controversy centered on Israeli concern about long-term gas supply.

The new regime allows for balancing of share limits among fields and caps the exportable maximum for any single field at 75%. If resource volumes under current estimates are developed into reserves, 16 tcf would be available for export from offshore Israel and as much as 14.25 tcf from Leviathan field alone.

Export schemes proposed or discussed include these:

• LNG from a liquefaction plant on the Israeli coast, requiring a marine pipeline about 100 miles long to reach the probable site.
• LNG from a plant at Vasilikos, Cyprus, requiring a 125-mile pipeline.
• LNG from floating liquefaction facilities at Leviathan, Tamar, or Aphrodite field.
• A pipeline from the Leviathan-Tamar area to Turkey, a subsea distance of 250-280 miles.
• A pipeline from Leviathan-Tamar to Egypt, about 125 miles.
• A pipeline to Greece via Cyprus and Crete, with marine distances of 745-950 miles, depending on routing.

Developments in the latter half of 2013 and early this year will influence planning for the export of gas from eastern Mediterranean fields.

In October, Noble, after drilling and testing an Aphrodite appraisal well 4 miles east of the discovery, lowered the field's gross mean resource estimate to 5 tcf from the original 7 tcf. Noble said further appraisal would be needed for a full assessment. At the new level, an onshore Cypriot LNG project would need supplemental supply from Leviathan or other fields nearby.

And in February, Noble signed a nonbinding memorandum of understanding to make Woodside Petroleum a 25% partner in the Leviathan license as a way to bring LNG expertise to the project. The signing upgraded and changed an in-principal agreement signed in December 2012. Under the deal, still subject to regulatory and other approvals, Woodside would pay as much as $2.5 billion, plus contingencies based on future production and exploratory results, for a 25% interest conveyed by Noble and its current partners—Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration. Noble would remain operator of upstream activities, and Woodside would become operator of an LNG development.

Geopolitical complications

Among all the gas-export schemes under discussion, a pipeline from the deepwater fields to Turkey might seem to make the most economic sense if distance and markets were the only considerations. In the eastern Mediterranean region, though, geopolitical risks loom especially large.

Turkey, like Israel, has rapidly growing requirements for natural gas, nearly all of which it imports. Of about 1.5 tcf of gas imported in 2011, according to the US Energy Information Administration, most came from three pipeline suppliers: Russia 67%, Iran 19%, and Azerbaijan 9%.

Turkey also has aspirations to be a transit country for natural gas as important as it already is for oil. It moved strongly toward fulfillment of that goal last year when the consortium developing giant Shah Deniz gas-condensate field in the Caspian off Azerbaijan approved a second phase of investment, having earlier identified the Trans-Adriatic Pipeline as its favored transport link to Europe. That project and the Trans-Anatolian Pipeline will link with the Southern Caspian Pipeline across Azerbaijan and Georgia to form the Southern Energy Corridor (SEC)—a strategically important way for Caspian natural gas to move to Europe without crossing Russia.

Initially, after offtake of about 580 MMcfd under contract to Turkish buyers, the SEC will deliver slightly less than 1 bcfd to Europe. That's less than one sixth of the amount to be delivered by the planned South Stream Pipeline, which is to carry Russian gas across the Black Sea, including Turkish waters, to Europe. Turkish approval of South Stream transit of its offshore territory is widely seen as a concession to the country's need for cordial relations with its main gas supplier.

Gas from the Israeli fields would diversify Turkish import sourcing and ease concerns about expandability of the SEC's throughput capacity given Turkey's own growing gas needs. But Turkey's relations with Israel are in a state of uneasy repair after collapsing in May 2010 over the killing by Israeli military forces of nine people, eight of them Turkish, aboard the passenger ferry Mavi Marmora. That vessel and several others were carrying activists thought to be testing an Israeli blockade of Gaza during a period of high tension. The Israeli government has apologized for the killings, and the governments of both countries have made unsteady progress toward restoration of diplomatic relations.

Even if Turkey and Israel solve their diplomatic problems, a pipeline from the deepwater Israeli fields to Turkey faces political and security risks that at least would complicate financing. It also would require the cooperation of Cyprus, which remains in conflict, albeit relaxing, with Turkey.

Turkey and Cyprus

Tension in Cyprus predates the island-nation's independence from the UK in 1960, before which Greek Cypriots had advocated unification with Greece while Turkish Cypriots sought partition. The legacy of this sometimes-violent struggle is a de facto division of the island into a Turkish north and Greek south and the longstanding presence of a United Nations peacekeeping force.

Officially, in the view of all countries except Turkey, the Republic of Cyprus governs the entire island. Alone among nations, Turkey views the northern part of the island as the Turkish Republic of Northern Cyprus. The UN in 2008 began working toward a negotiated settlement between Turkish and Greek Cypriots that would make the island a two-part federation. Negotiations stalled in 2012 but resumed last February.

Lingering disagreements over the rights of Greek and Turkish Cypriots and over maritime borders unsettle the outlook for offshore oil and gas development.

After Noble and partners made the deepwater Aphrodite gas discovery on Block 12, the government of Cyprus held a second licensing round offering a dozen other blocks (Fig. 2). Total won licenses to two of them, and a combine of Eni and Korea Gas Corp. won three.

Turkish Cypriots object to what they see as Greek Cypriot unilateralism in these initiatives and argue that agreements governing oil and gas work should involve them and be made only after a settlement establishing federal governance. Turkey, in support of the Turkish Cypriot position, has used warships to monitor offshore oil and gas activity.

According to the Greek Cypriot position, issues related to energy should be subject to international law, which it sees as supporting its actions, rather than UN negotiations. This position agrees that Turkish Cypriots should share in the economic benefits of oil and gas work, but some Greek Cypriot politicians argue that, in the absence of a settlement of the north-south conflict, Turkish Cypriots have no claim to influence over how resources should be developed.

In the conflict over maritime borders, Turkey claims pieces of what Cyprus identifies as its Blocks 1, 4, 5, 6, and 7. The Turkish Cypriots have proposed to allocate their own blocks for Cyprus as a whole, with some of them overlapping Cypriot Blocks 1, 2, 3, 8, 9, 12, and 13.

The maritime-boundary and partition issues were overshadowed for several months last year by a financial crisis that began in March and threatened the Cypriot economy with collapse. The European Union and International Monetary Fund in April 2013 provided a 3-year bailout package worth €10 billion.
Stabilization of the Cypriot economy removes a distraction from the diplomacy required for the removal of one impediment to full exploitation of the eastern Mediterranean's gas—and maybe oil—potential. Other impediments remain. Diplomacy will be needed for them, too.

Acknowledgment

Many insights in this article emerged in a workshop, Energizing Peace: Security Enhancement Opportunities of Eastern Mediterranean Energy Resource Development, in which the author participated Mar. 13-16 in Istanbul. The US government's Near East South Asia Center for Strategic Studies conducted the event under Chatham House rules, which allow reporting without attribution or identification of participants.

Link to source: http://www.ogj.com/articles/print/volume-112/issue-4/general-interest/e-mediterranean-gas-work-faces-geopolitical-hurdles.html

Hydrocarbons Present Three-Pronged Benefits | Gold News

Hydrocarbons Present Three-Pronged Benefits

April 07, 2014

Benefits from the hydrocarbon reserves discovered in Cyprus’ Exclusive Economic Zone (EEZ) will be three-pronged, Energy Minister Yiorgos Lakkotrypis has stated.

Speaking to the press, Lakkotrypis clarified that short-term benefits are expected from the hydrocarbons operating in the energy industry, medium-term prospects from the exploitation of hydrocarbon reserves, and, finally, long-term prospects are expected stemming from the creation of a knowledge-based industry.

“What we envision is not to stay in oil and gas per se, but also to create a knowledge-based economy around the oil and gas industry,” Lakkotrypis explained.

“What we want to do in the longer term is to be able to export this knowledge, because the gas might be there now, and the oil might be there now, but it is not going to be there for ever,” he said.

Furthermore, Lakkotrypis said the exploration activity in the Cyprus’ EEZ will continue in the summer of 2014.

“We are moving ahead with more explorations this summer,” he stated, adding that “we hope by the end of the year to have more discoveries.”

Preliminary results of an appraisal well carried out by Houston-based Noble Energy for natural gas in Block 12 of Cyprus’ EEZ estimate the hydrocarbons reserve between 3.6tcf and 6tcf with a gross mean resource of 5tcf. Noble Energy operates Block 12 with a 70% working interest. Delek Drilling Limited Partnership and Avner Oil Exploration Limited Partnership each own 15%.

The ENI-KOGAS consortium has signed a contract for hydrocarbons exploration in blocks 2, 3 and 9 within Cyprus’ EEZ, while Total has signed a contract for blocks 10 and 11.

He reiterated that Cyprus has opted for a Natural Gas Liquefaction Plant (LNG terminal) contrary to various arguments that this option will be too expensive.

“Looking ahead, one must not only look at the cost of the infrastructure: an LNG provides a lot of flexibility it provides the best options,” Lakkotrypis concluded.

Link to source: http://www.goldnews.com.cy/en/energy/hydrocarbons-present-three-pronged-benefits

Lebanon's Offshore Gas Could be the Next Big Energy Story in the Mediterranean | Equities.com

Lebanon's Offshore Gas Could be the Next Big Energy Story in the Mediterranean

By  Mona Sukkarieh

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April 2, 2014 10:35PM

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Recently discovered deposits of natural gas in the Eastern Mediterranean’s Levant Basin have arrived at a time when global demand for natural gas and related products is projected to increase at an annual rate of 1.6 percent, on its way to overtaking coal as the second most important fuel source in the world behind crude oil.

This is could turn out to be very welcome news for Lebanon, as the small but resilient nation claims a significant portion of the Levant Basin’s resources as part of its Exclusive Economic Zone (EEZ). Three-dimensional seismic studies conducted thus far in over 70 percent of the EEZ have shown much promise, but although the country has attained significant milestones over the past few years, for example by laying down the legal and institutional frameworks necessary to invite companies to bid for exploration rights, it still lags far behind its neighbors.

First round of bidding meets Lebanese politics as usual

In May 2013, the Lebanese Ministry of Energy and Water launched the first licensing round for offshore oil and gas exploration, opening up bidding for five out of ten offshore blocks. Previously, fifty-two companies had sought to qualify and forty-six were found eligible to bid, among them were some of the biggest names in the industry.
Severald notable American companies have been shortlisted: Anadarko (APC) , Chevron (CVX) and ExxonMobil (XOM) qualified as operators (out of a total of 12), and Marathon Petroleum (MPC) and Geopark/Petroleb qualified as non-operators. According to Lebanon’s Offshore Petroleum Resources Law, companies must form in consortiums of at least three, one of which is the operator. So far, however, the tender has been delayed three times due to the absence of a fully functioning government, which has made it impossible to approve of two crucial  decrees, one delimitating offshore blocks and their coordinates and another approving the model exploration and production agreement. The formation of a new cabinet in March 2014 brings hope that the process will be put back on track.
Lebanon’s gas must be viewed as part of the larger picture of offshore resources in the Eastern Mediterranean. In 2010, the U.S. Geological Survey released estimated a mean of 1.7 billion barrels of recoverable oil, and a mean of 122 trillion cubic feet of recoverable gas in the Levant Basin, an offshore and onshore area underlying parts of Lebanon, Israel, and the occupied Palestinian territories and extends to Cyprus’ exclusive economic zone.

Throwing off the burden of costly imports

Though relatively modest on a global scale, the Levant Basin’s resources are highly significant for these resource-poor countries. Their importance lies not only in cutting the energy bill by reducing dependency on expensive imports from countries where discoveries have been made, but also in allowing these countries to contemplate exporting part of these riches.

This is Israel made a series of discoveries over the past few years that have radically changed prospects for the country’s energy sector. Tamar, discovered in 2009 and estimated to contain 10 trillion cubic feet of natural gas, is enough to meet the country's needs for around 20 years, and assuring it a strategically inestimable energy independence. Leviathan, discovered in 2010, is almost double in size, and allows Israel to become a net exporter of gas. Cyprus was next, with the discovery of Aphrodite in 2011.

According to promising surveys, Lebanon claims that parts of these resources lay within its own offshore area. The country depends entirely on imports to meet its energy needs, and . Its annual fuel imports account for approximately 15% of its GDP, a major cause of concern for a country which boasts one of the highest rates of public debt to GDP in the world (134% in 2012, according to the World Bank, and expected to increase in 2014 as economic growth continues to struggle under the weight of the Syrian conflict).

In 2010, Lebanon imported 120,000 barrels per day (bbl/d) of refined oil products. In 2011, Lebanon’s oil demand reached a record 134,000 bbl/d, up 55,000 bbl/d in just four years. Oil accounts for just over 90% of the country’s overall energy consumption; coal for 3%; while gas accounts for a meager 2%. For a brief period between 2009 and 2010, Lebanon received gas supplies from Egypt, through the Arab Gas Pipeline, which runs from Al-Arish in Egypt to Aqaba in Jordan, passes through Amman, Damascus and Homs where it branches off towards the restive North Lebanese city of Tripoli. Supplies were frequently disrupted and then ultimately cut off in 2010. It is unlikely that a regular flow of supplies from Egypt would resume in the short-term, not only because of the prevailing unrest in the region but also due to Egypt’s questionable ability to export significant volumes of gas to its neighbors with its own local demand growing at such a fast pace.

A scenario that will benefit more than producers

The electricity sector stands to gain the most if potential offshore resources are confirmed in commercial quantities, and is perhaps where the impact of these additional resources would be felt the most given the given the burden that the sector places on the Lebanese economy. 88% of electricity in Lebanon is generated by thermal power plants which burn half of the country’s excessively costly oil imports. In 2009, average demand stood at 2,100 MW, while the available capacity was limited to 1500 MW, causing severe shortages that were covered mostly by private diesel generators.

The government adopted a policy paper for the electricity sector in 2011, which proposed short, medium and long-term measures to improve performance by 2015, and, more significantly, cut the energy bill by reducing reliance on expensive imported oil and gradually convert existing power plants to operate using liquid natural gas. Implementation will cost $4.87 billion and will be financed by the government (up to $1.55 billion), the private sector ($2.32 billion) and the international donor community.

Investment opportunities therefore are not limited to offshore petroleum/gas drilling activity. In order to reach these and other objectives, Lebanon’s energy infrastructure requires significant investments, involving the rehabilitation of certain installations, construction of gas imports and storage facilities, building new or revamping existing power plants, laying out a network of gas pipeline.

Energy supplies have for long constituted one of the major concerns for Lebanese authorities. Prospective natural gas resources in Lebanese coastal waters have the potential to transform the local economy by reducing the heavy energy bill and moving the country not only towards self-sufficiency, but possibly also towards becoming a net gas exporter. In addition, and if confirmed, these resources would help Lebanon boost its energy security and extricate itself from a regional supply network that has proven its limits in troubled times.

Mona Sukkarieh is co-founder of Middle East Strategic Perspectives, a Beirut-based political risk consultancy.

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Energy Ministry consultants say Leviathan not as big as previously estimated | Haaretz

Energy Ministry consultants say Leviathan not as big as previously estimated

Two separate companies say the offshore natural gas field may be 5-10% smaller than previously predicted.

By Avi Bar-Eli | Apr. 6, 2014 | 4:13 AM

Drilling at the Leviathan offshore natural gas field. Photo by Courtesy Albatross

By Eran Azran | Mar. 27, 2014 | 7:30 AM | 1

As Israel wrestles with how to manage the major natural gas finds that have been discovered off the country’s Mediterranean coast in recent years, the Energy and Water Resources Ministry is now looking into the possibility that the biggest find – the Leviathan field – may be 5% to 10% smaller than previously estimated.

TheMarker has learned that the issue arose several months ago as a result of calculations by two energy resource inspection and certification companies – SGS of the Netherlands and IHS CERA of the United States. The firms were hired by the Energy Ministry to validate the data the ministry received from natural gas exploration companies operating in Israel, and it is understood that the two companies’ estimates for the Leviathan field were somewhat lower than those Leviathan partner Noble Energy of Texas had reported.

Based on a professional opinion by the NSAI engineering firm, Noble had reported prospects under the best case scenario of extracting 535 billion cubic meters of gas from Leviathan. It is believed that the assessments of the two firms hired by the Energy Ministry were 5% to 10% lower. This would not only reduce the estimated value of the gas at the Leviathan site, but could also result in a reduction of the amount available by the Leviathan partners for export (the Israeli government has capped the amount of gas reserves that can be exported at 40%).

Over the weekend, industry sources reacted cautiously to the disparity, saying that it’s a matter of interpretation. They added that the two firms hired by the ministry did not take into consideration recent data from drilling at the area of the site known as Leviathan 4. The Energy Ministry declined to comment on the apparent disparity, saying that information “relevant to the sector” was examined on a regular basis by its own staff and its consultants. Noble and Delek refused to comment.

The Delek group currently owns 45% of Leviathan through its Avner and Delek Drilling units, while Noble Energy controls 40% and Ratio Oil Exploration owns 15%. Australia’s Woodside Petroleum has plans to acquire a 25% stake in the site, but hasn’t finalized its commitment while seeking better tax treatment from the Israeli government.

The ministry is thought to be reluctant to release the conflicting data both because of its commercial and public sensitivity and due to efforts first to investigate the reason for the discrepancy. There have been a number of meetings between representatives of Noble Energy, NSAI and the ministry’s two consulting firms on the issue in recent months.

Link to source: http://www.haaretz.com/business/.premium-1.583960