Cyprus energy plans have suffered a setback after major player ExxonMobil postponed until September 2021 two Cypriot gas drills scheduled for July due to cutbacks triggered by the coronavirus pandemic.
ExxonMobil informed Nicosia in a letter sent to the government that due the spread of coronavirus, it has been forced to postpone two drills planned for July in block 10 of Cyprus’ Exclusive Economic, pushing it back to September 2021.
The company blamed the escalation of the pandemic and the logistical difficulties it has in carrying out its work. For now, ExxonMobil will focus on nearby Lebanon.
Compounding the situation for energy majors like ExxonMobil oil prices have plummeted due to the coronavirus crisis, making it necessary for the company to reduce spending globally.
Cyprus Energy Minister George Lakkotrypis told Omega TV that the company has cancelled drilling plans in other parts of the globe.
“This brings about some delay to our plans because the results of these drillings are to be decisive for the commercial exploitation of the quantities of natural gas in the Cypriot EEZ. However, it is extremely important that the company remains committed to its research programme in our EEZ,” said the Lakkotrypis.
As reported earlier in March, ExxonMobil chairman and CEO Darren Woods said the company intended to significantly reduce its spending as an unprecedented financial environment is being formed.
The company had said in a statement that it would reduce its investment to $23 billion from $33 billion.
“In the long run, the key elements that support the company’s business plans have not changed, consumers and energy will increase, and the economy will recover,” noted Woods.
Woods added that ExxonMobil foresees a 20% -30% drop in global oil demand during the crisis.
Regarding drillings to be carried out by France’s Total and Italy’s Eni which has the most licenses to exploit blocks in Cyprus’ EEZ, Lakkotrypis said that the consortium has yet to inform the government of its intentions.
He said that the government is looking into how to proceed with its energy plans, taking into consideration the delays occurring due to the coronavirus pandemic.
ExxonMobil had planned to carry out two drills in 2020 and another next year, while the Total-Eni venture had planned three drills this year and possibly three more in 2021.
Nicosia has gone ahead with expanding its energy search at a time when Ankara is opposed to it while there is no political solution for Cyprus.
In February 2019, ExxonMobil discovered the largest gas reservoir off the Cyprus coast with an estimated 5 trillion to 8 trillion cubic feet in gas resources (tcf).
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 aims for natural gas to start flowing to Egypt’s LNG facility in 2025, therefore generating its first revenue from natural gas in the same year.