ENERGY: ExxonMobil could announce Cyprus exploration results next week

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Eagerly awaited results from two test drills offshore Cyprus for hydrocarbons by US energy giant ExxonMobil and Qatar Petroleum are expected to be announced next week, according to reports.

It is believed that Energy Minister George Lakkotrypis could announce the end of the exploration drills next Monday with both the government and ExxonMobil declaring the results soon after, although President Nicos Anastasiades will be consulted first.

Earlier this month, local media speculated that ExxonMobil could announce a “sizeable find” in block 10 following exploration drills at wells Delphine-1 and Glafcos-1 in Cyprus’ Exclusive Economic Zone.

A high-level Cypriot source, who reportedly spoke on the condition of anonymity, said the reserve isn't as large as the Zohr gas field in the Egyptian sector of the Mediterranean but “has a similar reserve.”

The reserve – found at Glafcos-1 – was said to hold at least 2.5 trillion cubic feet of natural gas – the minimum amount required to make it commercially viable.

The Energy Ministry moved quickly to end the speculation saying the results were not yet known as the drilling was ongoing and there was nothing to announce until the exploration was completed.

After working the Delphine-1 well from November, the Stena Icemax drilling rig relocated to a second well, Glafcos-1, in early January also in block 10 which ExxonMobil and Qatar Petroleum have a license to explore and exploit.

No official indication was given on results from the first drill search.

ExxonMobil’s announcement of a significant find could coincide with Turkey’s biggest ever navy exercises.

The “Blue Homeland” exercise, with the participation of frigates, destroyers and fighter jets, will take place in the Black Sea, the Aegean and the Mediterranean between February 27 and March 8.

Turkey has objected to Nicosia’s search for gas without the consent of Turkish Cypriots in the occupied north of the island, and officials have declared Turkish ships will soon begin offshore drilling activities around Cyprus.

Ankara says it will protect the rights and interests of the Turkish Cypriots and “take the necessary steps on the issue of natural gas, just as we do on other issues.”

Washington fully supports the right of Cyprus to exploit its natural wealth as it views energy development in the Eastern Mediterranean as a matter of priority, a senior US diplomat told reporters when visiting Nicosia last year.

US Assistant Secretary of State for Energy Resources Francis Fannon gave his backing when ExxonMobil and Qatar Petroleum began drilling in block 10 last November – a move Turkey is opposed to.

Fannon said: “We are very excited about the developments ongoing in the region…certainly happy to see US company involvement and continued opportunities.”

He said Washington had a “long-standing position of recognising Cyprus’ right to develop resource wealth in its EEZ…We will continue to advance Eastern Mediterranean energy as a priority.”

At the Delphine-1 well, drilling operations, conducted by the Stena Icemax drillship, were at a waterbed depth of 1,973 metres.

A safety zone of 500 meters has been established around the platform and entering this area is prohibited.

A Navtex marine notice issued for the drilling operation is valid until February 25.

Turkey has cautioned international oil companies not to drill for hydrocarbons off Cyprus or it will retaliate.

It argues that Cyprus has no mandate to exploit energy oil and gas riches while the island is still divided and no peace deal in site.

Turkish President Recep Tayyip Erdogan has warned foreign energy companies not to "overstep the mark" in disputed waters off the Cypriot coast.

The Italian state-controlled ENI had to abandon a scheduled drill for gas south of Cyprus in February 2018 due to a standoff with Turkish naval ships blocking the way of a drillship.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas – it has yet to be commercialised.

The discovery of nearby Egypt’s huge Zohr offshore reservoir in 2015 has stoked interest that Cypriot waters hold the same riches.

Cyprus believes if it can discover more untapped oil and gas reserves it would be a game-changer in the region’s energy policies.

Texas-based Noble Energy in 2011 made the first discovery off Cyprus in the Aphrodite block estimated to contain around 4.5 trillion cubic feet of gas but it has yet to be extracted. So far, it is the only confirmed find to be exploitable.

But the Aphrodite consortium – including Israel's Delek and Royal Dutch Shell – seeks to renegotiate its contract on the gas field before it plans to tap the gas.

 It is currently in talks with Nicosia over a bigger share of the profits to make the project viable.

Cyprus aims for natural gas to start flowing to Egypt’s LNG facility in 2022 via pipeline from Aphrodite, therefore generating its first revenue from natural gas in the same year.