Lakkotrypis confirms Shell’s interest to buy Cypriot gas

39

By Stelios Orphanides

Energy Minister Yiorgos Lakkotrypis said Royal Dutch Shell has showed interest in buying Cypriot and Israeli gas over the next 10 years.

Lakkotrypis, who was speaking on state radio CyBC, confirmed a Bloomberg report saying Shell was interested in buying 10bn cubic metres of Cypriot and Israeli natural gas over the next 10 years for $25bn (€20.3bn).

The minister said Cyprus was “close to a deal,” relating to talks to sell gas to one of the two liquefaction plants on Egypt’s Mediterranean coast via pipeline, without revealing additional details.

“I don’t want to specify if it is the terminal in Idku managed by Shell to which the Bloomberg report was referring to.”

“The talks involve both terminals and are at a quite advanced stage,” he said.

Lakkotrypis declined to say whether Noble Energy, the Houston-based gas company which together with Shell and Israel’s Delek Drilling, has the licence to develop the 4.5 trillion cubic feet (tcf) Aphrodite field in block 12 of Cyprus’s exclusive economic zone (EEZ), insisted on reducing the government’s share in the revenue from the project before going ahead.

“The only thing I can say is that we have difficulties with the prices,” he said in reference to the drop of the oil prices in 2014, which led to a reduction in the development of hydrocarbons worldwide.

Lakkotrypis added that Eni’s failed attempt to drill at Cuttlefish last month, as the target in block 3 is dubbed, after Turkey sent warships to the area to prevent the company from doing so, while it “was a bad development,” it was only a postponement.

Talks with Eni about its future exploratory programme are ongoing, Lakkotrypis said.

Eni has the hydrocarbon exploration and exploitation licence for several blocks in Cyprus’s EEZ, either on its own, as it is the case with block 8, or together with France’s Total (blocks 6 and 11) and South Korea’s KoGas (blocks 2, 3 and 13).

His comments were made as a vessel is about to begin surveys in block 10 owned by the consortium of ExxonMobil and Qatar Petroleum, ahead of an exploratory drilling in the second half of the year, likely in October, he said.

The Ocean Investigator, is scheduled to carry out an environmental survey, a precondition ahead of the submission of an environmental impact study ahead of the drilling.

A second vessel will carry out an archaeological survey to determine whether antiquities are located in the area.

Lakkotrypis said that while the two vessels will carry out operations which other companies did repeatedly in the past without attracting media attention, in their case, things are different after Turkey’s latest military action.

Share.

About Author

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

  • HighTide

    Strange how gas that does not exist above sea level can be sold.

    • johnnywires

      ahhh never mind settler.once confirmed you can sell it on.

      • HighTide

        Where is the confirmation for economic extraction and transportation? You are off the wire.

        • johnnywires

          the find has been confirmed and the deal is with egypt.anyway why does it bother you what the south does?

          • HighTide

            Nothing commercially viable has been confirmed. Enjoy your pie in the sky.

  • CyprusOilMan

    That’s a very healthy forward price for gas in today’s market. But what about the cost-side of the equation?

  • MrH

    All this will soon lead to only one outcome, and that is that the island will head down the road of a Two-State resolution due to the GREEDY interests of the Greek Cypriots. If only these Gas-Hydro-Carbon ventures had surfaced in the late 1970s! Hmmmmmmm, I wonder if the bigger powers with their Satellite surveillance already knew about these Gas finds but were waiting for that perfect Turkish government to appear in order to seal such a two-state Cyprus deal! Something is very fishy about all this. What an amazing coincidence!

    • MrH

      What the GCs had always uttered and labelled as Taboo is now becoming second knowledge and acceptance, even by their GC leader!

    • Leo

      You are confused and deluded.

    • johnnywires

      i dont want a two state solution i want a 2 country solution.we have nothing in common with settlers like you.most t/cs have immigrated and this time you cant blame the g/cs.stay in your hole and we will stay in the roc.close the checkpoints.

  • Eye on Cyprus

    “Shell was interested in buying 10bn cubic metres of Cypriot and Israeli natural gas over the next 10 years for $25bn (€20.3bn).”

    The question is: Will / can Cyprus produce a share of those 10bn cubic metres during the next 10 years at a cost of less than its share of Shell’s $25bn (€20.3bn)?

    • alexander reutersward

      Great summary

    • Leo

      The real question is would they be allowed to, by the bullying, barbaric, genocidal-maniacs, the Turks?

      • MrH

        Someone has to keep you dreamers in check!

        • Leo

          You are the dreamers, thinking that you own Cyprus.

    • Barry White

      Israel is very busy getting all they can ship into Egypt and converting their fields to cash.

      As Prez Nik and the Sheikh belatedly confirmed, Cyprus gas does not move until Israel approves and Cyprus signs over approximately 10% of Aphrodite to Israel. Even worse, the Egyptians will probably be claiming a chunk of the Cyprus gas adjoining their Zohr field. Again nothing can move on the Cyprus side until Egypt approves and gets it cut off the top.

      No suffocating deadlines for Israel and Egypt since every year that goes by without Cyprus gas, if it is worth extracting, means more billions for the two Alliance partners without the third leg. All this without the Turkish friends kicking up.

  • Rächer

    This is all good news for the TRNC, since none of it will see production until the TC’s are ensured their share of it.

    • NuffSaid

      Come to the table and do a deal or just sit back and wait for that escrow account to grow fat. You’ll then see the benefits of a deal with all that lovely cash waiting to furnish your community.

      • Rächer

        There’ll be no escrow account. It’s cash as it arrives into the coffers or the only gas you’ll see will come out of your “presidents” rear end. That’s no good to either community.

        • Leo

          The only gas I smell is coming out of your mouth, use the proper place to expel it.

        • disqus_ln3UA11Mqb

          Your attitude is what’s hurting your “community” the most.

    • CM reader

      keep dreaming

      • Rächer

        we don’t get it, then you don’t get it! lol

        • Parthenon

          Go find your own Gas you bunch of thieves!

          • Rächer

            We’ve found it all around Kibris, you piece of….

          • Parthenon

            Kybros actually, you lump of….

          • Rächer

            Okay, we Turks found it round Kybros, have it your way….lol

        • CM reader

          Keep dreaming and remember keep taking the tablets

    • Capt. Vain

      You are dreaming again….. maybe your mother needs to wake you up so you can have breakfast.

    • Andrew Eco

      don’t wake up, you’ll be disappointed

  • alexander reutersward

    Won’t he need to have someone extracting gas before it can be sold, so far things have not moved in that direction

  • cemal aslan

    Shell was interested in buying 10bn cubic metres of Cypriot and Israeli natural gas over the next 10 years for $25bn ??? 10bn cubic meters for $25bn ??? someone is kidding here but who?
    pls. go with the figures > 1 Trillion cubic feet is equal to 28 316 846 592 cubic meters (SI base unit)
    4tcf= 113,26bcm approximately
    1 barrel of oil = 6,000 cubic feet of natural gas.
    1 tcf of natural gas = 170 million barrels of oil, approximately.
    @ US$60 per barrel,
    1 tcf = $10,200,000,000
    4tcf= $40,800,000,000
    so 10bn cubic meters for $25bn ? c’mon Mr.Minister get your facts right before you start talking nonsense.

    • Barry White

      Never let facts get in the way of a good story. The sheep want to believe.

    • Venrenos .

      Come on Cemal! The Minister, Globes and Bloomberg talked of 10 bn. cm. of gas PER YEAR for 10 years= 100 bcm. in total. It makes absolute sense as Israel signed a deal to sell Egypt 64 bcm, of gas (over 10 years) for $15 bn.

  • cemal aslan

    Aphrodite is not categorized a field and is classified as “contingent and prospective resources” (natural gas and condensate) in the Aphrodite natural gas reservoir “the Reservoir” or “the Aphrodite Reservoir”
    Cypriot gas is a long way off and inherently uncertain-inconclusive evidence,Its unproven to have material accumulations of HCs to date…
    Aphrodite reservoir is Economically stranded gas – Physically stranded gas…
    A stranded gas by definition, reserves have to be commercial, that is, transportable to an existing market. A stranded gas contingent resource is a quantity of natural gas which has been discovered, but remains unusable due to physical or economic reasons…
    Warning – There is no certainty that any part of these potential resources will indeed be discovered. If they are discovered, there is no certainty that it will be commercially viable to produce any part of the resources. The prospective data is not an assessment of reserves and contingent resources that can only be assessed after the exploratory drilling, if at all…
    Definitions of Contingent Resources
    Contingent Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable.
    It is recognized that some ambiguity may exist between the definitions of contingent resources and unproved reserves. This is a reflection of variations in current industry practice. It is recommended that if the degree of commitment is not such that the accumulation is expected to be developed and placed on production within a reasonable timeframe, the estimated recoverable volumes for the accumulation be classified as contingent resources.
    Contingent Resources may include, for example, accumulations for which there is currently no viable market, or where commercial recovery is dependent on the development of new technology, or where evaluation of the accumulation is still at an early stage.
    Its time for a reality check , the CYPRIOT acreage is not very attractive under the current market conditions, potentially which means economically NOT viable at low oil/gas prices… Additional appraisal activities are necessary to further refine the ultimate recoverable resources and optimize field development planning and also It is not possible to set an estimated schedule for preparation and/or implementation of a development plan for the Aphrodite reservoir until the various plans to commercialize and develop the natural gas in the Reservoir have been explored and prepared. It is emphasized that each development option has a different timetable and different construction and operating costs, and until the preferred development option is selected, the timetable and budget for development of the Reservoir cannot be reasonably estimated. It is also emphasized that any development plan will naturally require extensive regulatory, commercial and financial arrangements…
    The amounts of gas discovered offshore Cyprus to date do not commercially justify an international export project,even to Egypt…
    Mr.Minister please learn and earn,I would suggest you…

    • Barry White

      Mr Minister aka The Sheikh has not learned or earned. He has certsinly coined it.

  • cemal aslan

    Ohhhh dear,dear me what about “a unitization agreement” for gas fields between Israel and Cyprus???
    Mr.Minister,the differences are not sorted out yet,but when?
    A unitization agreement is an essential step towards the development of the main natural gas assets of the two countries, Israel’s Leviathan field and Cyprus’s Aphrodite field which partly overlap into Israel’s Exclusive Economic Zone.It’s understood that a dispute over the monetisation of the Aphrodite field has held up the conclusion of a unitisation agreement between the governments of Cyprus and Israel governing the exploitation of cross-border reserves…

  • Parthenon

    Shell better buy some Warships because those non-law abiding Turks think the Gas & Oil belongs to them.

  • AnalogMind

    ENI is a weak player. Blocks #8,9, 2 and 3 need to be given to stronger hands. Two blocks, #6 and 11 are enough for ENI.