Cyprus and Lebanon have agreed to start negotiations for a production-sharing agreement concerning their adjoining offshore hydrocarbon resources.
Cyprus Energy Minister Giorgos Lakkotrypis said he and his Lebanese counterpart Gebran Bassil “agreed to start the discussion and conclude it as soon as possible”.
“We are opening a new era of a good cooperation between Lebanon and Cyprus in oil and gas,” added Bassil, adding that Lebanon could constitute a potential market for Cypriot gas.
According to Lakkotrypis, both sides briefed each other on the current state of hydrocarbon exploration and exploitation efforts and said they agreed to exchange experiences and knowledge.
Bassil said that his country was “open to discuss everything”, adding that Lebanon is keen to correct the “mistake” relating to the maritime border between Lebanon and Israel.
He added that Lebanon may provide Cyprus with an alternative market to export its gas, noting that Beirut is also in need for gas.
On the LNG plant Cyprus plans to construct at Vassiliko area, on the southeastern coast of the island, Bassil said that Lebanon regards it in a positive light. “It can also be a possible diversification solution for our gas exports” he said.
He noted that the two countries share a “gift from God”, the rich hydrocarbon resources, and expressed hope to utilise them for the benefit of their people.
Bassil said the prospects in Lebanon-Cyprus relations also include water, transportations and even wine.
Cyprus has already given six exploration and production sharing licenses to Texas-based Noble Energy, French Total and the Italian-Korean joint venture ENI-Kogas.
Noble, and its junior partners Avner and Delek, who are already operating gasfields within Israeli waters, have drilled twice with estimated average resources of 5 trln cubic feet. They have also signed a MoU with Cyprus to build an onshore LNG production plant in Vassiliko.
Total and ENI-Kogas are expected to start their initial exploration drilling in 2014.
Lebanon suspended its initial license period which is expected to close in December, subject to political stability in the country.
Cyprus has delineated the maritime borders of its Exclusive Economic Zone (EEZ) with lebanon, Israel and Egypt, but the Cyprus agreement with Beirut has not been ratified due to the difference between Lebanon and Israel.
