French energy giant Total is officially back in Cyprus after the government extended on Thursday the company’s exploration licence in the offshore Block 11 for two more years.
Total was ready to give up all of its exploration rights in Cyprus earlier this year as its geological and geophysical surveys had found no recoverable quantities of hydrocarbons.
It eventually decided to drop only Block 10. Block 11 lies 6 kilometres from the Zohr “super giant” gas field in Egypt discovered by Italy’s Eni in August, which may hold 30 trillion cubic feet of gas, equivalent to 5.5 billion barrels of oil.
“There is a good chance for Zohr to hold oil as well as gas, and if it does the oil could extend into Cyprus’ Exclusive Economic Zone (EEZ),” hydrocarbons business consultant Charles Ellinas told the Cyprus Weekly.
As stipulated in its official contract with Cyprus, Total has returned 25% of Block 11 to the government. Explorations in the newly-agreed area are expected to start in the summer of 2016.
Zohr is the the first discovery found in carbonate rocks in the eastern Mediterranean. Until now all discoveries have been in porous sands.
There are also possible political ramifications to the new developments , as drilling by Total in Block 11 could complicate ongoing reunification talks.
Last year, Turkey retaliated against Eni’s exploratory drilling by sending its Barbados seismic research vessel into Cyprus’ EEZ.
The Greek Cypriot side’s response was to freeze peace talks for more than five months.
Next week the government is also set to approve British multinational oil and gas company BG Group’s stake of 35% of Block 12, which includes the Aphrodite gas field.
The deal would bring the share of US-based Noble Energy in Block 12 down to 35% from 70% today, thus putting the British and UK firms on an equal footing.
“This upstream position provides a potential source of gas to Egypt where BG Group holds equity in the two-train LNG export facility at Idku as well as LNG offtake rights to lift 3.6 mtpa,” BG said in a statement.
BG is planning to use its investment to feed its liquefied natural gas (LNG) plant in Idku on the coast of Egypt.
Source: http://in-cyprus.com/total-is-back-in-cyprus/
