Cyprus Mail
Cyprus

Block 12 deal sealed with BG (Update 2)

By Andria Kades

BG Cyprus, subsidiary of British multinational oil and gas company BG Group on Wednesday joined the consortium which has the concession on Block 12 of Cyprus’ exclusive economic zone (EEZ) with a 35 per cent stake, the energy ministry announced.

The agreement was signed between US-based Noble Energy, Israeli firms Delek Drilling and Avner Oil Exploration, BG and Cypriot Energy Minister Giorgos Lakkotrypis.

Noble Energy will maintain operatorship of Block 12 with a 35 per cent stake arising from the Hydrocarbon Exploration Licence, while Delek Drilling and Avner Oil Exploration each hold 15 per cent working interest.

Hailing the “important development” which comes during “difficult times”, Lakkotrypis said this was a positive development towards exploiting the Aphrodite field.

“The consortium has been strengthened technically and financially and in fact all interests in the chain of natural gas production are aligning, as the newcomer to the consortium BG is the partner and operator in the liquefied natural gas terminal at Idku, Egypt.”

Welcoming BG to the consortium, Noble’s Cyprus business unit manager Barry Shelden said the British multinational was bringing a wealth of experience to the table in the technical, financial and marketing spheres, expressing his view this would be a real benefit to all the stakeholders in Block 12.

“We believe this is a very important step which will allow us to move forward with continuous work so we can develop the Aphrodite field with the energy ministry,” he added.

Thanking all the other companies and the attorney-general’s office for pushing the deal, Shelden said the consolidation of all four partner groups made a strong consortium.

Meanwhile on Wednesday, Royal Dutch Shell shareholders approved a $50 billion (€46bn) takeover of BG Group with the latter’s shareholders are expected to vote on it on Thursday.

If it goes forward, this will be one of the biggest deals in the energy sector in the past decade and will allow the two oil and gas companies to merge on February 15.

“BG Cyprus is a subsidiary of BG Group, from there onwards the whole group will be taken over so we will have to first see BG’s approval and the conditions of the merger,” Lakkotrypis told reporters.

Asked how this may affect the consortium and regional cooperation, Jim Seaton, BG Group’s global business development vice president said he could not speculate on Shell’s intentions for Cyprus and the wider area.

“We are very satisfied we came to Block 12 and are very focused on developing Aphrodite.”

BG Group in November had acquired a 35 per cent stake in Cyprus’ offshore Block 12, following an agreement with concession holder and operator Noble Energy, worth a reported $165m (€150m).

It had been subject to government approval, which Noble had formally requested.

The Cabinet approved the assignment of rights to BG Cyprus Limited on January 18 this year. Within the next few days, discussions are set to begin again on development and production plans “with the hope this will lead us to an agreed plan to start exploiting the Aphrodite field,” Lakkotrypis said.

Industry sources told the Cyprus News Agency the biggest challenge on exporting natural gas from Cyprus to Egypt was the fall in international oil prices, which as a consequence push natural gas prices down and are not expected to recover any time soon within the next few years.

Additionally, gas piped to BG’s liquefied natural gas terminal in Egypt is not necessarily linked to that from Israel’s Leviathan despite the fact the consortium operating Israel’s block has the involvement of Noble, Delek and Avner , the same sources said.

Related posts

Solutions needed for overcrowded prison

Peter Michael

Two suspects released after Engomi shooting

Staff Reporter

Opposition in uproar over limited scope of government committee on naturalisations (Updated)

Elias Hazou

New thalassemia drug slashes number of necessary blood transfusions

Gina Agapiou

House threatens bank over increased charges

Elias Hazou

Fines of up to €4,000 as ministry appoints fly-tipping ‘police’

George Psyllides

16 comments

Comments are closed.