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Cyprus

Energy giants give assurances of commitment to Cyprus operations (Updated)

 

Senior executives of two energy companies with hydrocarbons concessions in the island’s Exclusive Economic Zone (EEZ) gave assurances on Tuesday of their commitment to their Cypriot operations.

President Nicos Anastasiades held successive meetings in Nicosia with delegations of Israeli energy conglomerate Delek and then Italian giants ENI. Also present at the talks was Energy Minister Giorgos Lakkotrypis.

Delek are partners in the consortium which holds the concession on the Aphrodite prospect in offshore Block 12. The Israeli company have a 15 per cent working interest in the project, and are also partners – with Noble Energy – in Israel’s Leviathan gas field.

Later, Delek deputy CEO Yaniv Friedman told reporters that during the meeting with Anastasiades “we stressed Delek’s commitment to Cyprus and to the cooperation between Cyprus and Israel and for the development of Aphrodite and we would like to accelerate this and move this project forward as soon as possible.

“We are also moving forward with our plans for Leviathan and we hope there will be close cooperation between the two countries and the two projects,” Friedman added.

A day earlier, the energy minister said the government had received from the Aphrodite consortium a ‘revised’ development plan for the reservoir.

On this, government spokesman Nicos Christodoulides said the government would on Tuesday be relaying to the consortium its own observations on the updated development plan.

“We are expecting an outcome the soonest possible. There is a will on both sides to complete this process as soon as possible,” he noted.

The Aphrodite gas reservoir in Block 12 was declared commercial in 2015. With an estimated 4.5 trillion cubic feet of gas, it is to date Cyprus’ only proven gas reserve.

Anastasiades subsequently met with a delegation of ENI, which holds concessions on offshore Blocks 2, 3 and 9.

ENI chief executive Claudio Descalzi later spoke of “a very good meeting.”

“We came here to express our commitment to the country. We discussed about our existing three blocks, on the programmes, on the future and we discussed also about the future of the third [licensing] round where we have to express our interest in a couple of weeks, so that is very soon,” said Descalzi .

“We also expressed our commitment, engagement and willingness to continue to stay here to invest and possibly to immediately work on the new blocks.”

His comments were construed as signalling ENI’s possible participation in the third licensing round.

According to Descalzi , also discussed was the “Eastern Mediterranean gas hub that is becoming more and more important, with Cyprus with Egypt and Israel.

“As you know ENI is the first operator in the Mediterranean Sea, not only Egypt but also Libya, Nigeria and Tunisia. So we want to use our expertise, our experience and our position to be very active also in Cyprus,” he said.

Descalzi has been talking up a Mediterranean gas hub ever since ENI discovered last year a massive gas reservoir in Egyptian waters, dubbed ‘Zohr’.

Asked about ENI’s plans regarding its Cyprus operations, the ENI CEO said that “for sure we are going to drill in 2017,” but he did not elaborate.

Government spokesman Nicos Christodoulides later said the president was “fully satisfied” with the two meetings.

He added: “There is generally a heightened interest from companies [in the third licensing round], which we welcome, it is a vote of confidence in the Cyprus EEZ and in the region, but we must wait and see how this interest transforms into action,” he said.

The spokesman also revealed that on Wednesday Anastasiades is scheduled to see a delegation of Total, following a request by the company.

Total holds an exploration concession on Block 11.

Meantime the energy minister is this week set to travel to London, and then onto Houston, Texas to promote the third licensing round, for which the deadline for official expressions of interest is fast approaching, on July 22.

As per standard practice, the government is not expected to reveal the participating companies until well after the official expressions of interest are submitted and once concessions (if any) have been granted.

During the second licensing round launched in 2012, a total of 15 companies and consortia had expressed an interest. In total, 12 offshore blocks were put up for auction.

In the current round, the acreage opened up for bidding are Blocks 6, 8 and 10.

Asked about a mooted Israel-Turkey gas pipeline, following the rapprochement deal between Ankara and Tel Aviv, the government spokesman reiterated that Nicosia will not consent to such a project unless the Cyprus problem is first solved.

The proposed pipeline would pass through Cypriot waters.

“We have received no such entreaties [for the pipeline] from Israel. To the contrary, whenever the President of the Republic speaks with the Israeli Prime Minister – and it is often – he always makes clear the Republic’s position that such a project cannot happen…”

The spokesman was not posed a follow-up question as to why the president might feel the need to keep reiterating this position to the Israeli leader.

An energy analyst previously told the Cyprus Mail that whereas Nicosia can object to an Israel-Turkey pipeline, it cannot halt the project.

That is because Cyprus and Turkey are both members of the Energy Charter Treaty. Under the treaty, EEZs are not considered sovereign territory, thus the owner of an EEZ cannot stop a project from going ahead.

 

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