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Egypt’s gas bonanza sourced in Cyprus’ EEZ

By Elias Hazou
The natural gas in Egypt’s Zohr reservoir originated in geological formations within Cyprus’ Exclusive Economic Zone (EEZ), Energy Minister Giorgos Lakkotrypis said on Wednesday.

He was speaking to reporters on the sidelines of the 7th Mediterranean Oil and Gas Forum in Nicosia, where he had outlined to participants government plans with regard to the launching of a third oil and gas exploration round.

Based on new geological data compiled by the government’s foreign consultants, Lakkotrypis revealed, there is now evidence that the Eratosthenes Seamount, inside the Cypriot EEZ, is the source of the gas that currently lies in Egypt’s massive Zohr play, discovered last summer and estimated to hold some 30 trillion cubic feet of gas in place.

The new data is based on a geological sequencing model that tracks carbonate layers in the bedrock. Carbonate layers had largely been overlooked in the Eastern Mediterranean until Italian energy major ENI applied the model and struck a bonanza at Zohr.

Essentially, gas trapped under ancient corals in Eratosthenes is thought to have migrated to the location of Zohr over the course of millions of years.
And new geological surveys and data strongly suggest there are a number of targets around Eratosthenes with a similar morphology to Zohr’s, Lakkotrypis said.

It is these targets, which due to their similarity with Zohr, that piqued the interest of oil and gas companies, prompting the government to announce plans for a new licensing round.

“I wouldn’t want it to be taken that we have actually discovered gas or that hydrocarbons exist there,” the minister cautioned however.

“Let me stress that we have identified a number of targets in the area mainly around Eratosthenes which are similar to the structure of Zohr and are therefore of particular geological interest.”

Asked whether it is these acreages which companies would zero in on during the new licensing round, the minister said only that it was up to the companies.

“As you know, the ENI-Kogas consortium is re-evaluating the geological data for blocks 2, 3 and 9, and of course the developments with Zohr impart a new dimension onto these blocks’ potential.”

The minister declined to be drawn on when the government will be rolling out the new exploration round, noting only that as a matter of routine the announcement would first have to be made in the official journal of the European Union.

From there on, interested bidders would be given the necessary time to submit their bids on offshore blocks.

The Eratosthenes Seamount is a geological formation in the Eastern Mediterranean about 100 km south of western Cyprus, about 120 km long and 80 km wide. It is one of the largest features on the Eastern Mediterranean seafloor.

Cyprus’ EEZ occupies an area of 51,000 sq. km off the south-eastern coast of the island, covering the Eratosthenes seamount, the Levant Basin, and the Nile Delta. It has been divided into 13 exploration blocks.

The Eratosthenes formation covers parts of Blocks 8, 9, 10 and 11.

Egypt’s Zohr prospect 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.

Constantinos Hadjistassou, assistant professor of Engineering Science at the University of Nicosia, told the Mail that news of Zohr ‘originating’ in Eratosthenes boosts the chances of discovering hydrocarbons in the area.

On the flipside, he added, Zohr is located at a considerable distance from Eratosthenes, and it should be taken into account that natural gas – whereas mobile – can only migrate so far.

“We have to take this announcement with a pinch of salt but, if verified, it certainly bodes well for the potential of more gas in our EEZ,” Hadjistassou offered.

A possible geophysical link between Cyprus’ Eratosthenes and the Zohr reservoir had largely been dismissed by experts and the media after Italian company ENI late last month made it clear that the gas was all on the Egyptian side.

ENI’s appraisal plan for Zohr envisages the drilling of three further wells to fully delineate the field.

Meanwhile the Cyprus Hydrocarbons Company – the state hydrocarbons agency – has called for tenders for hiring a team of energy industry consultants, who are to provide assistance in decisions pertaining to the monetising of existing, as well as of future, gas reservoirs in the Cypriot EEZ.

The consultancy contract will be for three years, with an option for two renewals, each of a duration of one year.

The government has set a cap for the contract at €6.5 million.

This is a budget provision and does not necessarily entail that the full €6.5 million expenditure will be made. But given it is a significant amount, it telegraphs that there may be some forward motion on the development of the ‘Aphrodite’ prospect.

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