Friday, August 1, 2014

BG pursues two offshore Egypt gas developments | Offshore

08/01/2014

READING, UK – BG Group and its partners have submitted a development plan for the Notus high-pressure/high-temperature and Harmatten Deep gas discoveries in the Egyptian sector of the Mediterranean Sea.

The plan is in accordance with the El Burg offshore concession agreement. BG adds, however, that the release of funds for any further Egyptian development projects, including West Delta Deep Marine (WDDM) Phase 9b, remains contingent on an improvement in the local investment climate. It remains in discussions with Egypt’s government.

BG’s Egyptian fields produced a total of 57,000 boe/d for the company in 2Q 2014, down 14% from 1Q. This is a result of deteriorating reservoir performance and the continued high proportion of diversions to Egypt’s domestic market, where the company is entitled to a lower share of production.

The first WDDM Phase 9a well has come onstream, however the nine-well development will only temporarily offset underlying E&P production declines, the company says.

»»» READ MORE »»»

Thursday, July 31, 2014

Exclusive: Minister Lakkotrypis Reveals Names of New Cypriot Fields | Natural Gas Europe

Email Print

Exclusive: Minister Lakkotrypis Reveals Names of New Cypriot Fields

Cyprus is impatiently awaiting the commencement of further exploratory drilling in its Exclusive Economic Zone. Successful encounters would allow the construction of an onshore LNG terminal in Cyprus’ coastal Vassilikos area and will bring the island closer to its energy hub ambition.

Cyprus’ Minister of Energy Yiorgos Lakkotrypis revealed to Natural Gas Europe in an exclusive announcement the names of six new potential reserves in Blocks 2, 3 and 9. They are Onasagoras, Zenonas, Kinyras, Amathusa, Evagoras and Praxandros. The first four potential reserves have already been approved for drilling, while the others are being processed and hopefully will be approved very soon. Drilling will begin with Onasagoras in Block 9. The fields were named after old Cypriot cities, Cypriot Kings and Cypriot thinkers.

Minister Lakkotrypis said that such activities involve an extensive element of uncertainty and that despite encouraging indications, only drilling will reveal if there are in fact deposits of natural gas in the explored fields and the quality of the natural gas encountered.

The ENI/KOGAS consortium is set to commence its drilling activities by the end of summer 2014. The four first fields will proceed for sure, said the minister, and depending on the results, and if it is deemed necessary, the consortium has expressed a willingness to move to more drilling. Should there be a discovery, confirmatory drillings will also take place.

ENI/KOGAS holds exploration licenses for Blocks 2, 3 and 9 with ENI holding an 80% interest in the blocks and Kogas 20%. TOTAL received the concession for Blocks 10 and 11 of Cyprus’ waters and will begin exploration activities in 2015. Noble Energy will also be conducting further drilling activities in Block 12.

The Aphrodite field was the first to be discovered in 2011 in Block 12 of Cyprus’ EEZ. The field was named Aphrodite, after the Greek Goddess of love. Aphrodite is believed to hold between 3.6 and 6.1 Tcf of natural gas with a gross mean resource of 5 Tcf which is operated by Noble Energy.

Cyprus' had adopted an onshore LNG terminal as its national strategic project. Cyprus has not yet discovered sufficient amounts of natural gas to justify the commercial viability of the multi-billion dollar project. The 5 Tcf Aphrodite field does not justify alone the endeavour. Additional quantities of natural gas will allow a final investment decision for the construction of the LNG terminal. The completion of the project will highly depend on the results of ENI/KOGAS, TOTAL and Noble Energy. Lakkotrypis said that the results of the first drilling towards the end of the year will be key in determining the viability of the terminal.

Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Email Karen on karen@minoils.com. Follow her on Twitter: @karenayat

Link to source: http://www.naturalgaseurope.com/new-cyprus-gas-fields-lakkotrypis

Export of Leviathan gas to Turkey unlikely without improvement in political ties' | Jerusalem Post

Export of Leviathan gas to Turkey unlikely without improvement in political ties'

By SHARON UDASIN

07/31/2014 03:49

Report says companies won’t implement projects without Erdogan’s consent.

Leviathan holds 453 billion cu.m. of gas [file] Photo: Courtesy of Albatross

Any agreement to export natural gas from Israel’s large Leviathan reservoir to Turkey can only occur following an improvement in political relations between the two countries – relations that have grown increasingly fragile during the Israeli-Gazan conflict – according to an Institute for National Security Studies report.

“An agreement that will provide a solution to the crisis between the two countries is a necessary condition for an agreement on Israeli gas exports to Turkey, and the companies trying to promote it cannot achieve this goal without such a solution,” the report authors wrote.

As the developers of the Leviathan reservoir prepare to select gas export recipients, they must take political constraints under consideration when reviewing Turkey as a possibility, the authors explained.

Called “The Political Feasibility of Natural Gas Export from Israel to Turkey,” the report was published on July 20 by former INSS director and former ambassador to the EU and to Jordan Dr. Oded Eran; Clal Energy CEO and former Israel Natural Gas Lines CEO Dan Vardi; and INSS researcher Itamar Cohen.

Slated to begin producing gas in as early 2017, the Leviathan reservoir is estimated to contain up to 621 b.cu.m., according to revised evaluations published by Netherland, Sewell and Associates (NSAI) earlier this month, which boosted previous estimates of 535 b.cu.m.

Houston-based Noble Energy owns 39.66 percent in Leviathan, while Delek Drilling and Avner Oil Exploration – subsidiaries of the Delek Group – each own 22.67% and Ratio Oil Exploration holds 15%. A June 2013 government decision caps exports from the reservoir to 40%.

“The anti-Israel statements by the leaders of Turkey that doubled also as anti-Semitism over the course of the conflict between Israel and Hamas in July 2014 only emphasized the level of risk in a strategic business deal between Israel and Turkey,” the authors wrote.

“Exchanges and accusations between the leaders of the two countries have made a gas supply agreement from Israel to Turkey an option difficult to realize.”

Looking at Turkey’s natural gas market, the report describes the country’s rising demands for the resource, as well as the nation’s potentially strategic position between the East and the Western market. Turkish consumption of gas has doubled in the past decade to 45.3 b.cu.m. in 2014, with an expected rise to 76 b.cu.m. by 2030, according to the report.

Due to Turkey’s limited natural gas resource supply, the country is particularly dependent on Russian and Iranian gas, the report said. In 2013, Turkey received 58% of its gas – about 30 billion cubic meters – from Russia and about 19% from Iran, as well as 13% from Azerbaijan and smaller amounts from Algeria and Nigeria.

The Russian-Ukrainian crisis has endangered about half of the supply coming from Russia to Turkey, as it must pass through a Ukrainian pipeline, while increased demand in Iran – as well as economic sanctions imposed on the country by the US – has reduced the latter’s capabilities of fulfilling requirements, the authors explained.

Although Turkey’s relationship with its third supplier, Azerbaijan, is politically sound, the amount of gas coming in from the country is relatively small.

In 2011, Turkey and Azerbaijan signed on the establishment of the Trans-Anatolian Pipeline (TANAP) project, which will double the amount of gas coming from Azerbaijan to Turkey beginning in 2018, the report noted. Meanwhile, in May 2012, Turkey signed an agreement to deploy pipelines from Kurdistan to Turkey.

Not only does Turkey need to increase its domestic gas flow, but the country also “aims to become a significant player in the energy market in the region,” by potentially serving as a “geographical bridge” between the East and West, the authors stressed. The TANAP project will allow Turkey for the first time to provide such a bridge to Europe, the report added.

As far as Israel’s gas is concerned, the Turkish firm Turcas Energy announced in April of this year that it was in talks with subsidiary Enerjisa, a 50-50 joint venture between Turcas and the Sabanci Group, about building a 600-kilometer pipeline from Leviathan to Kayhan, Turkey. If Israel elected to move forward with export to Turkey, the country could supply about 18 to 20 b.cu.m.

annually for about 15 to 25 years, the report estimated.

“It is reasonable to assume that large companies like Turcas and Sabanci would not dare to execute strategic projects without the consent of Erdogan,” the authors wrote.

While acknowledging that there will not necessarily be a direct link between an agreement on exporting gas from Leviathan to Turkey and “the crisis in relations between Israel and Turkey,” the authors stressed that Turkey would not likely be ready to proceed in the current environment.

Without a political reconciliation between the two countries, advancing an export agreement would be difficult, the authors concluded.

“A complex question is whether Israel should insist that an agreement with Turkey will say that gas flow will not stop for political reasons,” the report said.

Involvement of a third party, such as a US or German organization, in a framework agreement could help provide financial security, the authors wrote.

Some such organizations could include the US Overseas Private Investment Cooperation, the Export-Import Bank of the US and the German Euler Hermes company.

The authors suggested seeking out the participation of the World Bank and its International Finance Corporation or Multilateral Investment Guarantee Agency, which in addition to boosting financial security, would ensure “that the project would be implemented in each stage.”

Asked by The Jerusalem Post if the 10 additional days of Israeli-Gazan conflict since the report’s publication have changed their evaluations at all, the lead author, Eran, said that the situation has only grown more dismal.

The operation in Gaza, he explained, has distanced Turkey and Israel further, “making it even less likely that they can reach an agreement, which is needed as an umbrella to the commercial agreement.”

Link to source: http://www.jpost.com/Enviro-Tech/Export-of-Leviathan-gas-to-Turkey-unlikely-without-improvement-in-political-ties-369508

Wednesday, July 30, 2014

The Cyprus solution | Executive Magazine

How European–Mediterranean energy collaboration can solve problems all around

by Roudi Baroudi

Cyprus will shortly be in position to provide clean, safe and reliable supplies that will meet 20 percent of Europe’s gas needs (Credit: "AFP PHOTO / HO / PIO")

More and more people are arriving at the same conclusion: a miracle cure for much of what ails the European Union is close at hand, and Cyprus is easily the best place to dispense it.

Apart from Germany and a few other exceptions, the EU economy is in a historic slump, while its appetite for energy makes it unnervingly dependent on Russia, which supplies a third of Europe’s gas imports, and other suppliers outside its borders — thereby making the union dangerously vulnerable to factors beyond its control. The recent confrontation over Ukraine only underscored the potential precariousness of this arrangement: while Russia is not likely to damage its own interests by turning off the taps that supply its biggest customer, its pipelines cross the borders of multiple countries that might perceive an interest in disrupting the flow.

Luckily, however, all recent exploration work indicates that deposits beneath the Eastern Mediterranean seabed contain sufficient amounts of oil and (especially) natural gas to revitalize Europe’s economy for decades to come.

Cyprus, Israel, Lebanon and Palestine share what has emerged as a collection of world-class formations; Israel is the only country that has already begun to exploit its reserves, but Cyprus should follow in a few short years. Palestine’s potential can’t be unlocked until some kind of deal is reached with Israel, and Lebanon has been delayed by domestic political infighting, but the latter’s reserves now appear to be the most extensive of the four. And in the longer term, new studies show that Greece may be the real kingpin of the Eastern Mediterranean, further enlarging the region’s capacity to fuel a European renaissance with cheap, safe and reliable energy supplies.

It is difficult to overstate the potential of this treasure trove. Going by the latest estimates, Cyprus will shortly be in position to provide clean, safe and reliable supplies that will meet 20 percent of Europe’s gas needs. Throw in Lebanon and Israel, and that figure rises to 30 percent, while Greece could bring it to 40 percent by 2020. By increasing the number of competing producers, development of the Eastern Mediterranean will also lead to lower energy prices, driving growth across the EU.

For the producers, it means a new shared stake in peace and stability, massive revenues to fund socioeconomic development and permanent reductions in poverty and other needs. For the consumers, it means an economic revival on the scale of America’s ‘fracking revolution’ — with far less controversy and environmental risk.

For the EU as a whole, it can mean even more: restoring both the momentum of the European project and public faith therein, and reducing tensions among member states, particularly along the traditional North–South axis, caused by economic hardship. It can also transform Europe’s southeastern flank, turning a source of instability and refugees into one of opportunity and partnership. Nothing would more fully accomplish the goals of the Euro–Mediterranean ideal, as refined over the years at Trieste, Barcelona and other venues.

All recent exploration work indicates that deposits beneath the Eastern Mediterranean seabed contain sufficient amounts of oil and (especially) natural gas to revitalize Europe’s economy for decades to come

Passing the pipe

These and other gains will not be achieved without first surmounting a few obstacles. The primary political hurdles include Israel’s dismal relations with its Arab neighbors, which make direct cooperation virtually impossible for the time being. Meanwhile, the main technical challenges center on getting the gas to thirsty markets on the European mainland, as well as other customers in East Africa and South Asia.

Cyprus can solve all of these problems — and more — by avoiding, simplifying or essentially erasing them. Its diplomatic position already gives it friendly ties with countries on both sides of the Arab–Israeli divide, and its geographical location makes it the only logical place to situate a new regional energy hub. If the necessary investments are forthcoming, that hub will gather the gas produced by all Eastern Mediterranean countries for distribution via pipeline, ideally via Greece’s Ionian Sea. Why the Ionian? Because that’s where Greece’s potential deposits are situated, so running the pipe through there means turn-key access when those reserves are ready to enter the European energy mix.

In the past I’ve referred to this link as the ‘Peace Pipe,’ mainly because it would almost force the Arabs and the Israelis to regard one another as indirect business partners rather than as mortal enemies. From the EU’s perspective, we could also call it the ‘Prosperity Pipe,’ since it would substantially decrease production and other costs, restoring much of Europe’s competitiveness and opening the way for the revival of its economy.

Other potential markets are far removed from pipeline routes, so the hub should also include a liquefied natural gas (LNG) plant, the output of which would be carried by ship to power stations and other customers along the African and Asian littorals, places where energy is badly needed to achieve development goals. Dubbing this the ‘Peace Plant’ sounds about right, but it’s what the facility will achieve, not what anyone will call it, that will be important. Opening access to more customers will further expand the shared stake of Arabs and Israelis, lessening the likelihood of future conflict.

Once again, the placement of these prospective LNG markets docks perfectly with Cyprus’ geographical and diplomatic qualities, further reinforcing its status as the most commercially viable site to serve as host for the region’s emerging energy economy.

But there’s more — much more. As an EU member state, Cyprus is party to its stringent environmental and competition laws, rules by which other current and potential suppliers (notably Russia and even more distant producers in Central Asia) are not bound. This means no more worries about transit rights, after-the-fact price disputes or violations of sulphur standards: gas processed, piped or shipped through the island would be bound to comply with EU standards on these and other issues.

Europe’s choice

Rarely has any undertaking, let alone one with such far-reaching ramifications, been more eminently qualified to receive official EU recognition as a Project of Common Interest, or key energy infrastructure. The EU’s uppermost governing body, the European Commission, is the rightful catalyst to bring all of these considerations together, not only by providing its own funds, but also by recruiting and coordinating other sources of financing, including the World Bank, major international oil companies (IOCs) and other public, private and multilateral actors.

There is reason for optimism. The European Commission of late has demonstrated increasing interest in the potential of the Eastern Mediterranean in general and Cyprus in particular — and greater awareness of the urgency involved. Vice President and Energy Commissioner Günther Oettinger made all the right signals at an energy conference in Malta, and his voice will be heard, not just because he hails from Germany and is therefore seen as representing the ‘North European’ perspective, but also because his personal reputation is for sober analysis rather than over-enthusiastic boosterism.

In fact, Cyprus will almost certainly become some sort of gas hub regardless of European stewardship: Halliburton and Schlumberger, the world’s biggest oil and gas services providers, have already selected the island as their respective regional headquarters, which tells us all we need to know about what industry insiders think.

The difference is that if the private sector takes the lead, the hub will be designed, developed and oriented to serve the interests of the IOCs; benefits will certainly accrue to Cyprus and the rest of the EU, but mostly as side effects. By contrast, if Brussels plays its rightful role, the entire process will be shaped in such a way as to maximize its advantages for EU citizens. More than ever, the choice is clear.

Link to source: http://www.executive-magazine.com/opinion/comment/cyprus-solution

Eni/KOGAS begins exploratory drilling in block 9 of Cyprus' EEZ | Cyprus News Agency

Eni/KOGAS begins exploratory drilling in block 9 of Cyprus' EEZ
CNA - NICOSIA 30/7/2014 18:20

Energy Minister Yiorgos Lakkotrypis has announced that Eni/KOGAS joint venture will begin an exploratory drilling in block 9 of the island`s Exclusive Economic Zone (EEZ).

The drilling will take place at the reserve which has been given the name “Onasagoras” and according to the Minister, the indications are very promising.

The Minister made the statements to the press following today's signing of an MoU between the Republic of Cyprus and JV Eni/KOGAS, with the aim to investigate areas of cooperation related to potential gas resources valorization, with priority to the onshore LNG option.

(CNA)

*The full text of the news item is available in the paid version of the CNA web service. Subscription Form

*CNA reserves the copyright to the news stories it files, which is granted to subscribers for specific use only.

Link to source: http://www.cna.org.cy/webnewsEN.asp?a=bdc12e855bfb4a019f60af85347429a8

Ενθαρρυντικές οι ενδείξεις - Αποφασίστηκαν τα ονόματα κοιτασμάτων | Φιλελεύθερος

Τετάρτη, 30 Ιουλίου 2014 4:19 μμ - Τελευταία ενημέρωση: Τετάρτη, 30 Ιουλίου 2014 4:53 μμ

Ενθαρρυντικές οι ενδείξεις - Αποφασίστηκαν τα ονόματα κοιτασμάτων

Υπ. Ενέργειας: Ερευνητικές γεωτρήσεις στο τεμάχιο 9

Αποστολή με email Εκτυπώστε την σελίδα

Λευκωσία: Ο Υπουργός Ενέργειας Γιώργος Λακκοτρύπης ανακοίνωσε το απόγευμα ότι πριν από το τέλος του καλοκαιριού ξεκινούν διερευνητικές γεωτρήσεις στο Οικόπεδο “Ονασαγόρας”, που βρίσκεται στο τεμάχιο 9 της κυπριακής ΑΟΖ. Ανακοίνωσε επίσης ότι για το κοίτασμα αυτό, καθώς και για άλλα πέντε κοιτάσματα, οι ενδείξεις είναι ενθαρρυντικές.

Οι δηλώσεις έγιναν μετά την υπογραφή μνημονίου συνεργασίας με την ΕΝΙ, με το οποίο η κυπριακή δημοκρατία και η ιταλική εταιρεία δηλώνουν ως προτεραιότητα τους το τερματικό υγροποίησης στο Βασιλικό για την αξιοποίηση των κοιτασμάτων που ενδέχεται να βρεθούν στα τεμάχια 2, 3 και 9 της κυπριακής ΑΟΖ.

Οι προοπτικές για ανακάλυψη αξιόλογων ποσοτήτων φυσικού αερίου στα τρία τεμάχια είναι πολύ ενθαρρυντικές.

Μάλιστα, ο Υπουργός Ενέργειας αποκάλυψε προ ολίγου ότι έχουν συμφωνηθεί και οι ονομασίες των έξι κοιτασμάτων που διαπιστώνονται μέσα από τις σεισμογραφικές έρευνες στα κοιτάσματα 2, 3 και 9.

Πρόκειται για τα κοιτάσματα Ονασαγόρας, Ζήνων, Κινύρας, Αμαθούντα, Ευαγόρας και Πράξανδρος.

Στα τέσσερα πρώτα κοιτάσματα υπάρχει εγκεκριμένο και με συγκεκριμένα χρονοδιαγράμματα πρόγραμμα γεωτρήσεων που θα ξεκινήσει το Σεπτέμβρη και θα ολοκληρωθεί σε δύο χρόνια με τέσσερις ερευνητικές γεωτρήσεις και αν τα αποτελέσματα είναι θετικά θα γίνουν και δύο επιβεβαιωτικές.

Γράφει: Πέτρος Θεοχαρίδης

- See more at: http://www.philenews.com/el-gr/top-stories/885/211952/yp-energeias-erevnitikes-geotriseis-sto-temachio-9#sthash.gPpnmLjT.dpuf

Link to source: http://www.philenews.com/el-gr/top-stories/885/211952/yp-energeias-erevnitikes-geotriseis-sto-temachio-9

Tamar pipeline expansion on course | Globes

Tamar pipeline expansion on course

The new pipeline will allow delivery to Union Fenosa Gas in Egypt.

30/07/2014, 18:20 Amiram Barkat

While delays and question marks involving the Leviathan natural gas reservoir are multiplying, expansion of development in the Tamar reservoir is making rapid progress. Tamar has been providing all the gas for the Israeli economy since April 2013. The Tamar developers are expected to submit soon to the Ministry of National Infrastructure a development plan for laying an additional gas pipeline at a cost of $1.5 billion. The pipeline, which will have an annual capacity of 7-8 billion cubic meters, will make it possible to deliver gas to the liquefaction facility of Spanish company Union Fenosa Gas (UFG) in Damietta, Egypt.

Delek Group energy units to pay dividends

Egyptian gov't sets out terms for Tamar gas deal

The new pipeline will be connected on the Egyptian border to a pipeline to be built by UFG. The facility in Egypt is expected to buy 4 BCM a year, leaving the remaining gas for use in the Israeli economy. If the UFG deal goes through, Tamar will be able to supply the economy with a maximum of 16 BCM, compared with 10 BCM at present. This quantity also includes the compressors project, which will make it possible to increase the quantity of gas supplied through the current pipeline by 25%.

Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2014

Link to source: http://www.globes.co.il/en/article-tamar-pipeline-expansion-on-course-1000959495

Tuesday, July 29, 2014

What Lebanon's Delayed Entry in the Energy Game Actually Means | Natural Gas Europe

What Lebanon's Delayed Entry in the Energy Game Actually Means

Lebanon’s repeated postponement of its first licensing round is cause for concern. The bidding round was set to be launched in August 2014, after three previous missed dates, and it is no surprise that it will be delayed - again. The failure of the country’s decision-makers to agree on crucial issues is threatening Lebanon’s gas ambitions. Two decrees remain to be issued, one delimitating the blocks that will be open for bidding and the second laying out a model sharing exploration and production sharing agreement.

Lebanon had started well: an ambitious schedule, precise dates and deadlines, and the interest of major oil and gas companies to participate in the country’s search for offshore hydrocarbon. But investors are losing patience. The neighbouring countries have moved ahead, with problems of their own, but progress is ongoing. ENI and Total will be drilling offshoreCyprus and the feasibility of the island’s planned LNG facility will largely depend on their results.Israel, after a long debate around exports and exports quotas has taken in June 2013 the political decision to export gas. Israel is now in the stage of finalising its export strategy.

Egypt is once again an attractive place for Israel, this time not as a source of natural gas, but as an export route. The partners in Israel’s largest offshore fields Tamar and Leviathan have signed letter of intents with companies operating in Egypt to use Egypt’s unused LNG export facilities and reach export markets. Asia is a target, with lucrative prices, higher than anywhere else in the world. Using Egypt’s LNG facilities mean that Israel will not have to invest in its own terminal. Such a deal would allow Israel a fast, easy and relatively cheap access to the LNG market. Israel will also be on the side supplying small quantities of gas to its immediate neighbours via pipeline.

Europe is an attractive place for the Eastern Mediterranean. Diversifying natural gas sources and routes is the EU’s strategic goal. While the Eastern Mediterranean gas will not allow the EU to achieve complete independence from Russian gas, it will at least contribute in the diversification of the EU’s natural gas portfolio.

Will Lebanon make it in time to participate in the Eastern Mediterranean’s region energy story? Lebanon must first agree on the regulatory framework around its oil and gas sector. Secondly, the country must stick to deadlines to avoid deterring oil and gas majors from exploring its waters and participating in its energy industry. By the time natural gas is eventually encountered in Lebanese waters, the access to LNG markets will be more tricky than it is today. The entry of new players will tremendously affect LNG prices. Then again, it will all depend on how much gas Lebanon will find, whether the 95 Tcf estimates advanced by politicians is a reality or a fantasy and whether Lebanon will ever launch its exploration phase.