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Huge Gas Find Off Egypt Stirs Hopes for Cypriot Energy Search

March 14, 2017

NICOSIA – A senior official with Italy’s oil and gas company Eni said the discovery of a huge natural gas deposit in Egyptian waters has boosted hopes of other such finds in the eastern Mediterranean that could help meet Europe’s energy needs, including off Cyprus where a group of international companies are searching.

Eni SpA Chief Exploration Officer Luca Bertelli told a gas conference March 14 that his company’s “milestone” discovery of Zohr, estimated to hold 30 trillion cubic feet of gas, has reinvigorated the interest of other major oil and gas companies in the region.

He said waters off Cyprus hold potential for new discoveries while exploration opportunities are coming up with Lebanon and Israel soon offering offshore areas, or blocks, to bidders for exploration licensing. Bertelli said Eni expects the first gas to start flowing from Zohr by the end of 2017.

Turkey has a big stake in any potentially lucrative energy finds off Cyprus where it unlawfully occupies the northern third of the island and demanded a share in any discovery, including in sovereign Cypriot waters.

Turkish President Recep Tayyip Erdogan previously sent research vessels and a warship into Cypriot waters to search and track other companies looking to drill for gas.

In October, 2016, Turkish-Cypriot leader Mustafa Akinci said energy finds could be the lure to help reunify the island divided since a 1974 Turkish invasion although the talks have collapsed over other issues, including Turkey’s demands to keep a standing 30,000-strong army there.

“A new energy corridor between the East Mediterranean and Europe through Turkey would be very secure, low cost and efficient. It would not only benefit the Turkish Cypriots and Greek Cypriots in Cyprus, or Turkey, but would also be a huge opportunity and potential for a very large geographical area,” Akinci said.

He said there are too many problems with a sub-sea power cable project in the Mediterranean Sea between Israel, Greek Cyprus, Crete and Greece, suggesting an alternative route which is shorter and cheaper.

“The solution to problems on the island will create new horizons that could be opened for all of us in the energy sector.

“The Middle East could be geographically connected to the West via underwater connection through a more feasible project between Israel, possibly the Cyprus Federation, and Turkey,” he said, according to the news agency.

In December, 2016, Cyprus government negotiators negotiated with three oil and gas giants including a consortium made up of ExxonMobil and Qatar Petroleum to sort out the terms of licenses to drill off the east Mediterranean island’s southern coast, the country’s Energy Minister said.

Yiorgos Lakkotrypis said Italy’s Eni will negotiate license terms for one offshore area, or block. A partnership between Eni and France’s Total and the ExxonMobil-Qatar Petroleum consortium will negotiate for one block each.

Block 10, the area that the ExxonMobil-Qatar Petroleum consortium is negotiating for, lies above an Egyptian gas field that its discoverer Eni has hailed as the largest ever gas find in the Mediterranean sea.

“The fact that we had very interesting technical and economic proposals for the specific block leaves us optimistic about its prospects,” said Lakkotrypis.

Eight companies or consortiums had vied for the three blocks as part of a third licensing round.

The energy minister said talks are expected to conclude by the end of January or early February next year. Licenses will be valid for seven years.

Texas-based Noble Energy, which received a drilling license in an earlier round, discovered a gas field off Cyprus estimated to contain over four trillion cubic feet in reserves.

Eni and Total have also received drilling licenses in an earlier round.

Lakkotrypis said Total plans to proceed with exploratory drilling in another block in the second quarter of 2017.

(Material from the Associated Press was used in this report)

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