Cyprus has received six bids for the three natural gas and oil exploration licenses that were offered in the third offshore licensing round, the Energy and Trade Ministry announced on Wednesday.
.jpg)
Italy’s ENI, an existing joint venture partner with Koreas Kogas in offshore blocks 2, 3 and 9 in the Cyprus Exclusive Economic Zone (EEZ), has submitted bids for all the three new licenses available in blocks 6, 8 and 10 – one on its own and two in a consortium with French Total.
The ENI/Total venture was the only bidder for block 6. ENI submitted a solo bid for block 8, competing with Capricorn Oil, a consortium comprising Edinburgh-based Cairn Energy and the Israeli duo Delek Drilling and Avner Oil Exploration.
Most of the interest, though, came for block 10, adjacent to Egypt’s colossal Zohr gasfield, where 30 trillion cubic feet of gas reserves were discovered by ENI in 2015, making it the biggest in the Mediterranean, ahead of Israel’s Leviathan field, that if proven could even double Egypt’s natural gas reserves.
The three bidders are ENI/Total, a joint venture between ExxonMobil and Qatar Petroleum, and Statoil Upsilon of the Netherlands, registered in Rotterdam barely three weeks ago.
Energy Minister Yiorgos Lakkotrypis said the government was “very satisfied with the outcome,” having moments earlier briefed the cabinet about the evaluation of the bidders.
He said that a 65% weight in the evaluation criteria was the financial aspect, with the rest being the technical side. The successful bidders, will be expected to begin drilling up to three years after being awarded the exploration license.
Israel’s Delek is already present in the consortium operating the Aphrodite gasfield in block 12, headed by Houston-based Noble Energy, that was recently joined by Shell-subsidiary British Gas. The gasfield has so far produced the biggest prospect of natural gas reserves, with the upper level at 4.5 tcf and is expected to come on stream by 2020. However, sub-surface extension of the reserves into the Israeli EEZ means that Cyprus needs to conclude a monetisation deal with the neighbouring country, which President Nicos Anastasiades visited on Sunday.
Total gave up its license for block 10 as it said it wants to concentrate on another license it has within the Cyprus EEZ, block 11.
All political parties hailed the outcome of the third licensing round, saying it strengthened Cyprus’ position over Turkey’s claims to the resources. But they also warned that Israel’s warming of relations with Ankara and initial talks of directing a subsea natural gas pipeline from Israeli waters to Turkey, should not jeopardise the UN-sponsored talks and that President Anastasiades should remain firm that earnings from future oil and gas sales will benefit all citizens after a solution to the island’s division.
