Cyprus Mail
Business Cyprus Energy

Preliminary deal signed with ENI-KOGAS

By Elias Hazou

THE government on Wednesday signed a preliminary agreement in Nicosia with an Italian-South Korean joint venture on exploring the development of natural gas offshore Cyprus.

In a statement, the energy ministry said the Memorandum of Understanding (MoU) is “aimed at investigating areas of cooperation related to Cyprus potential gas resources valorisation, with priority to the onshore LNG option.”

The deal was signed with ENI and KOGAS, who hold prospecting concessions on offshore blocks 2, 3 and 9 of the Cyprus Economic Exclusive Zone.

Italian company ENI is the operator of the three blocks with an 80 per cent participating interest. KOGAS is a partner with a 20 per cent participating interest.

Cyprus has similar MoUs with Total, as well as with Noble and its Israeli partners, Delek and Avner, for the LNG plant.

Meanwhile energy minister Giorgos Lakkotrypis also announced that the Block 9 partners will commence exploratory drilling at the end of the summer.

The drill would take place in the field dubbed “Onasagoras” in Block 9, believed to be the most promising of the blocks licensed so far.

Speaking to reporters after the signing of the agreement, Lakkotrypis said that six potential fields in total have thus far been identified in the three blocks under license by ENI-KOGAS.

Asked about their prospects, and whether they are on a par with the ‘Aphrodite’ field in Block 12, the minister said only that the indications are “encouraging.”

For the time being, the indications pointed to natural gas, not oil, he added.

It’s understood that ENI are contractually obligated to carry out at least four exploratory drills. The sites other than “Onasagoras” have yet to be determined; the locations of subsequent drills will depend on the findings of the first.

The drilling rig for the “Onasagoras” prospect is expected to arrive offshore Cyprus in September from Mozambique, sources told the Mail. The rig is owned by Saipem, an Italian oil services group and a subsidiary of ENI.

US energy outfit Noble, which holds a concession on Block 12, is expected to carry out their next exploratory drill in early 2015. French giant Total, with concessions on blocks 10 and 11, would be carrying out their first exploratory drilling towards the end of 2015, Lakkotrypis had recently said.

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