Total within sight of Block 11 deal extension
The Cyprus government is poised to green light the exploration rights in its Exclusive Economic Zone (EEZ) for French energy giant Total for another two years, according to reports in Phileleftheros on Wednesday.
According to the paper, Total looks set to get its contract extension for another two years with an official government announcement expected on Thursday. The French company has already put forward the €7.7million deposit and is odds-on favourites to continue exploration in offshore Block 11 of the island’s EEZ with the possibility of drilling as early as next year.
Total is also said to have returned 25% of Block 11 – as stipulated in its official contract with Cyprus. Explorations in its newly agreed area is expected to commence in the summer of 2016.
Meanwhile, Total has also requested to have the rights for Block 10 returned but the Energy Ministry is expected to seek advice from the Legal Services on how to proceed legally due to the interest from rival firms to also explore the area.
Total was initially a reluctant explorer in offshore Cyprus, as it was primarily focusing on looking for oil rather than natural gas. The company even decided to give up its licence in Block 10 earlier this year and the government fought hard to persuade the company not to abandon Block 11 as well.
However, the recent discovery of gas in Egypt’s Zohr reservoirs by Italian multinational oil and gas company Eni just six kilometres from Block 11 forced Total to reconsider its strategy in the region.
Another sticking point for Total is what Cypriot port to use with the cabinet having recently ruled out Larnaca as a port of call for the French exploratory vessel while the Limassol Port has also not been given the necessary restructuring to meet the needs of Total.
There are also possible political ramifications too.
Likely drilling by Total in Block 11 could complicate ongoing reunification talks. Last year, Turkey retaliated against Eni’s exploratory drilling by sending the seismic research vessel ‘Barbaros’ into the Republic of Cyprus EEZ.
The Greek Cypriot side’s response was to freeze peace talks for more than five months.
Source: http://in-cyprus.com/total-within-sight-of-block-11-deal-extension/
