Bidding to start for Cyprus oil and gas exploration

Cyprus is expected to launch its first offshore bidding round on February 15 for an area south of the island to allow future oil and gas exploration development.

“A seismic survey carried out by Norway’s PGS Geophysical in the waters between Cyprus and Egypt in early 2006 showed encouraging results,” the Middle East Economic Survey reported Monday.

The MEES report added that PGS is conducting an offshore seismic survey in Lebanon’s territorial waters.

According to Financial Mirror sources, the Cyprus government organised a road-show in London in November with the intent of inviting tender bids from potential exploration and development (E&D) companies.

Cyprus hopes that the newly discovered liquid natural gas (LNG) finds in Egypt’s offshore Nile Delta area, suggests that a similar streak of natural gas wells continue northward, reaching the southern Cyprus coast.

Although Cyprus does not see itself as a major LNG exporter — if and when suitable and efficient wells are found – the potential finds and reserves will eventually be limited to be used by the new 240MW gas turbine at the Cyprus Electricity Authority’s new power plant on the southern coast by 2009.

This represent’s 30% of the EAC’s current production capacity and rising fuel costs have forced the Cyprus government to fast track this project, even though Cyprus opted out of the East Mediterranean Arab Gas Project that will pipe LNG from Egypt to Syria and beyond.

However, the bone of contention is a political one, as Turkey wants to have a say in any natural resource exploration and finds on or off Cyprus. It objected to Cyprus and Lebanon signing an exclusive economic zone agreement last week, similar to a deal signed with Egypt last week, that clearly defines offshore exploration boundaries on the eastern Mediterranean seabed.

 

— Cyprus rejects Turkey‘s objection to economic zone deal with Lebanon

 

Cyprus President Tassos Papadopoulos on Friday rejected Turkey‘s objection to a recent exclusive economic zone agreement between Cyprus and Lebanon, the Cyprus News Agency reported.

Papadopoulos said that Turkey has no rights over potential oil and natural gas resources in Cyprus‘ coastal areas.

Cyprus and Lebanon last Wednesday (Jan. 17) signed in Beirut an agreement for the delimitation of the exclusive economic zone to pave the way for future exploration in the seabed between the two countries.

But Turkey reportedly lodged a protest to Lebanon, saying that Turkey has a part in the matter and Beirut should ask Ankara‘s opinion before signing any agreement with Cyprus.

Positive findings in the seas off Egypt and initial findings in Cyprus‘ surrounding areas have encouraged the island state to make further scans for energy resources.

Meanwhile, Cyprus has worked to determine the exclusive economic zone with Egypt to facilitate future exploration of oil and natural gas reserves.