The chief executive of Italy’s energy giant ENI has reaffirmed his company’s commitment to continue with explorations off the coast of Cyprus, despite announcing the discovery last week of the biggest offshore gasfield in the eastern Mediterranean within nearby Egyptian waters.
Some had feared that Italian ENI’s discovery of 30 trillion cubic feet (tcf) at the Zohr field, which is in close proximity to the border of Cyprus’ offshore Block 11, currently licensed to French oil giant Total, would upset negotiations to sell Cyprus gas to Europe via BG’s plant in Egypt.
Egyptian officials were quick to reiterate their good relations with Cyprus and that the two countries would maintain negotiations for future gas sales, not expected before 2018 or 2020.
The discovery within the Egyptian Exclusive Economic Zone (EEZ) also sent shivers down the backs of the Israelis, that had so far maintained the lead for the biggest discovery at the Leviathan gasfield, as the new supply could make future Israeli gas exports redundant as well.
ENI’s CEO, Claudio Descalzi, said after a meeting in Nicosia with President Nicos Anastasiades and Energy Minister Yiorgos Lakkotrypis that “we have to reassess all our data to understand better the geological model and be more focused maybe on another target in the same blocks. But it is clear that the commitment to continue our exploration in Cyprus is very strong”.
“We have three blocks here, so we are a very important actor in Cyprus”.
The Italian executive said that with the President they discussed about the future of the three blocks and also about the area and all the possible development in the Eastern Mediterranean sea, after the big discovery in Egypt.
“I think we can create good synergies with the Egyptian facilities and we can also discuss about future development by following the same kind of geological model that we developed and discovered in Egypt”.
On his reference about synergies, Descalzi elaborated that “we have expert facility in Egypt, so what we are studying with the government is that we are evaluating, not just between companies, but also between the governments, because it is clear that Egypt has a major role to play, but have an energy plan that is empty, and so that could be an opportunity for gas that has been found in Cyprus to find (its) way to Europe, for example. So that is very positive for Cyprus, Egypt and Europe”.
He said that ENI’s drilling in Egypt will begin in January.
Earlier last week he and Lakkotrypis had talked about “significant news” in the energy sector, at a time when French Total had failed to find satisfactory gas reserves within its Cyprus EEZ license, while ENI had delayed future prospecting.
Lakkotrypis met with representatives of British Gas (BG), reportedly interested in obtaining gas from the Aphrodite prospect in Block 12, processing it at their LNG plant in Egypt and then re-exporting it to Europe.
The minister also said that BG is in contact with the Block 12 partners (Noble Energy, Delek and Avner) as well as with the state-owned Cyprus Hydrocarbons Company (CHC).
According to the Cyprus News Agency, the Block 12 consortium and CHC are in consultations with ten other organisations interested in the gas, including Union Fenosa, operators of the other LNG terminal in Egypt at Damietta.
