Energy minister says future gas strategy depends on next findings

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By Stelios Orphanides

Cyprus’s future strategy in developing its hydrocarbon industry will depend on the quantities that exploratory drilling in its exclusive economic zone will reveal over the next years, Energy Minister Yiorgos Lakkotrypis said.

“We have looked at every option,” said Lakkotrypis, was speaking on state-radio CyBC a day after disclosing the names of hydrocarbon companies that applied in Cyprus’s third oil and gas licencing round. “We know exactly what every option means in terms of natural gas quantities”.

Ismail Lakkotrypis ManiatisWhether Cyprus will set up a land-based liquefaction plant, or sell natural gas liquefied on floating platforms, or in a compressed form, or to resort to laying pipelines to Greece or Egypt, will ultimately depend on the gas quantities that hydrocarbon companies will discover, he said.

Lakkotrypis said on Wednesday that the third round attracted bids from U.S. energy giant ExxonMobil, which filed a bid together with Qatar Petroleum for Block 10 in Cyprus’s exclusive economic zone, and from a consortium of Italy’s ENI and France’s Total, which also applied for block 10 and block 6. In addition, a consortium of Capricorn, a subsidiary of Scotland’s energy company Cairn, with Israel’s energy companies Delek and Avner, applied for block 8, for which ENI also applied.

Total already has the licence to explore and exploit hydrocarbons in block 11 while ENI has, together with its partner KoGas, the South Korean energy company, the licence for blocks 2, 3 and 9. ENI-KoGas is expected to present the government its exploration plan for the awarded blocks after receiving an extension of the deadline until February 2018. Total, which last year relinquished block 10, is preparing to drill in block 11, the minister said. ENI announced in September the discovery of Zohr, a reserve in Egypt’s exclusive economic zone, adjacent to Cyprus’s block 10, containing 30 trillion cubic feet of natural gas.

Lakkotrypis map“We know exactly what kind of quantities are required to justify these projects,” Lakkotrypis said adding that following Egypt’s recent mammoth discovery, Cyprus decided to launch a third round by offering three blocks around the subsea Eratosthenes mountain to increase the chances of new findings.

The minister added that Egypt is for the time being the “most advantageous” option regarding the development of Aphrodite, Cyprus’s so only gas finding to date, containing 4.5 trillion cubic of feet natural gas.

Egypt, with which Cyprus is in talks about selling Cypriot gas, “is de facto the only realistic option which is also (financially) marginal judging from talks we have with potential buyers,” the minister said. “The sales agreement is still pending but this is not that easy given the global oil and natural gas price situation”.

Production in Aphrodite, owned by the U.S. Noble Energy Inc., British Gas, a subsidiary of Royal-Dutch Shell, and Delek, is not expected to commence before 2020.

The Cypriot energy minister said that financial and political considerations relating to low energy prices and the outstanding Cyprus problem discouraged companies from bidding in the third round.

Some energy companies decided against bidding “mainly because they have large investment projects in Turkey,” he said. “This is the reality”.

NEtanyahu Anastasiades TsiprasRegarding Israel’s interest in exploring the possibility of laying a pipeline linking its gas findings to Turkey, which last month normalised its relations with both Israel and its largest energy provider, Russia, Lakkotrypis said that Cyprus cannot veto such a project. “The Law of the Sea is clear,” he said.

He added that according to the Law of the Sea, while “a country cannot veto such a project, it is clearly stated that a state has to give its consent about the route of the pipeline”.

Therefore, “states involved, in this case Israel, Cyprus and Turkey, will have to come to an arrangement about the environmental issues,” he continued. “Will Turkey ever come to talk to the Republic (of Cyprus) in the absence of a settlement of the Cyprus problem?”

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Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • Barry White

    August 9th, 2016 St. Petersburg.

    Russia taking a highly principled position in support of Cyprus, announces that it will sell billions in gas through and support the Turkish TANAP Pipeline. At the same time, Russia announces making Turkey a nuclear power with the sale and construction of its nuclear power plant.

    Israel positions itself to have Leviathin gas flowing to Turkey via undersea pipeline by 2020.

    There appears to be a pattern here.

    How do you spell ‘suffocating timeframes’?

    Tic Toc, Tic Toc….

    The Sheikh seems to be finally waving the white flag. Possibly just before it is too late to even pick up a few scraps.

  • Nazaret Shamlian

    The Cypriot energy minister does not look very happy in the lead photograph,does he?

    • Mickey Swains

      He’s just realized he’s got the wooden spoon.

      • Adele

        I’ve got one a wooden spoon Mickey…. So good for stiring.?

    • Barry White

      The Sheik,, unlike the country, has a surplus of gas. Very uncomfortable.

  • Jay Bee

    “Cyprus’s future strategy in developing its hydrocarbon industry will depend on the quantities that exploratory drilling in its exclusive economic zone will reveal over the next years”

    Now, wouldn’t it have been sensible, nay, vital, to have come out with this statement right at the VERY BEGINNING of this miserable charade ???

    I mean, instead of the regular, wild and outlandish statements (good for Brownie points but BA else) that we would be selling gas to everyone under the sun and customers would be clamouring to buy every whiff of gas we could produce ? Hmm ?

    Has the Fake Sheikh just had a reality check, his very own Epiphany ?

    • Barry White

      “Sensible ?” No glorious flights, hotels, per diems and Votes in Sensible, JB.

      • Jay Bee

        I’m trying to be grown up – for a change………………

        • SuzieQ

          You’re doing quite well! ?

          • Jay Bee

            You think so ?….

          • SuzieQ

            Up to a point!!! You know I struggle at times, too….

          • Jay Bee

            I visit this forum and the CM very infrequently now and my comments are deliberately non-serious for a whole host of reasons. The time will come very soon when I stop visiting altogether, as the relentless repetition of regurgitated news of our idiotic government and their idiotic adventures makes it all a bit pointless.

            So, for now I will bite my tongue – and continue monitoring occasionally…

          • Adele

            Got there before you Jay I only comment now just for a laugh…. It’s safer??.

          • Jay Bee

            I’m with you there A…

          • SuzieQ

            Don’t leave without me, please! I can be serious when necessary, but mostly like to (try to) inject a bit of humour when all others are getting their heads up their own jacksies!

          • Jay Bee

            I know you do and you are right about the jacksie fixation…..

            With a few exceptions, humour is lacking on this forum and I just have better things to do with my time than read through some of the BS published on here

            Don’t worry though, I will give warning when I have had enough . I am not one of those who keeps threatening to leave, but come back for repeat comeback performances…..;0)

            ps keep up with your injections………… they cheer me (and others) up………..

        • Adele

          I’m impressed Jay?.

          • Jay Bee

            Steady on there ……………………. ;0)

          • Adele

            Really Really impressed Jay x

        • Barry White

          Piffle JB, if you are anything like me, I figure that I have a chance to be grown up from now in about the same time as it is taking since 1974 to solve the Cyprob.

          • Jay Bee

            Please note : I did say ‘trying’ .

            First thing I was taught when I joined the Diplomatic Service was – always have a sure fire get-out strategy. ;0)

          • Barry White

            Many of us are very ‘trying’ JB.

          • Jay Bee

            I think I will pass on the witty retort Baz… ;0)

  • Didier Ouzaid

    Major reality ‘sheikh’ here, after many thoughts we’d be competing with Qatar in no time.

    So yeah, just like in the vast majority of businesses, you scale up if you have smth valuable to sell to a significant pool of customers. And yeah, welcome to capitalism, where your friends’ business interests might differ from yours and you cant be a child about it, you must get your sh*t together so that you eventually become part of the solution and hop on the train and not remain stuck as the everlasting rock in the shoe.

  • costaskarseras

    It it obvious that something extraordinary is taking place in Cyprus’ EEZ, otherwise it would not have attracted so much interest of such gigantic oil companies at a time when the demand for fuel is falling.

    I believe the Cypriots should be on their guard and not follow the British example but the Norwegian method who use the earnings from the gas and oil for the benefit of the whole population as well as the future generations. Unfortunately, the British people were robbed of their North Sea wealth and in addition were loaded with a huge national debt

    Needles to pointout that this wealth should benefit Greek and Turkish Cypriots

    • Mike

      And there was I being told by economists and captains of industry that Britain actually squandered her North Sea wealth on a generous and over inflated Benefit’s System. Just goes to show how wrong learned people can be.

      • Adele

        Yes Mike so true remember them days well …. How naive we were.

    • Barry White

      Hold on Costas. The terms and conditions have not been agreed yet. We need to understand how much Cyprus has to pay the companies for them to consider drilling.