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Cyprus Energy

Government extends ENI-KOGAS gas exploration by two years (Updated)

The cabinet on Monday approved a request by the ENI-KOGAS consortium to extend its exploration activities by two more years.

The decision was taken at the cabinet meeting at the presidential retreat in Troodos.

The exploration licencee was renewed for offshore blocks 2, 3 and 9.

The consortium’s concession was due to expire in February 2016; it has now been extended to February 2018.

Speaking to reporters later, Energy Minister Giorgos Lakkotrypis said the Italian-South Korean joint venture has asked for more time in order to “re-assess the energy potential, which is all the more necessary now after the developments in Egypt’s Exclusive Economic Zone and the discovery of the Zohr gas reservoir.”

Responding to questions, Lakkotrypis confirmed that, under the extension, ENI-KOGAS would be carrying out more drilling, but could not say where or when.

According to a preliminary plan shown to the government a few months ago, he said the consortium would place their next drill around mid-2017.

“But this I say with every reservation,” said Lakkotrypis, noting that it depends on the consortium’s re-evaluation of its geologic model.

He said that currently a large ENI team is working on the geologic model for blocks 2, 3 and 9.

“I hope and I expect that within January we shall have the first results from this re-evaluation.”

Previously, following two unsuccessful exploration drills in Cyprus’ Block 9, ENI had been reportedly considering abandoning its operations here.

The minister may have been referring to a new model employed by ENI, which tracks carbonate reservoirs rather than sand reservoirs.

It is this model which ENI used when in the summer it discovered the Zohr prospect in Egyptian waters – the largest gas find ever made in the Mediterranean.

Zohr lies just 6km from the boundaries of Cyprus’ Block 11, licensed to French oil major Total, and about 90km from the Aphrodite reservoir in Block 12.

Earlier this month, the government also approved the extension of energy giant Total’s exploration licence in Block 11 for two years.

Meanwhile AKEL MEP Neoclis Sylikiotis raised questions over the “ease” with which the government renewed the licence.

In a statement, Sylikiotis said that the government reserves the right to renew such contracts, but only provided that the concession holders fulfil their obligations.

In this case, he added, the licence is being renewed without the companies fulfilling the technical part of their contract – evidently alluding to the number of drills ENI-KOGAS were supposed to carry out.

“In addition, the government is promoting this renewal without briefing the political parties or parliament and without adequate documentation or transparency.”

This, the MEP noted, “once again confirms that the government’s actions are piecemeal and are not based on a comprehensive energy strategy.”

In an interview with daily Alithia, Lakkotrypis said Total has found indications of potential drilling targets.

In the same interview, the minister revealed that a mooted synergy for joint development of the Aphrodite and Zohr reservoirs was now all but ruled out.

The reason, he explained, is that ENI and the Egyptian government want to pipe the Zohr gas unprocessed, whereas the development plan for Aphrodite provides for transporting processed gas.

 



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