Cyprus Mail
Business Energy

Deal close on Limassol to clear path for Total

THE consortium granted the marine services concession at the port of Limassol is very close to an agreement with oil and gas services company EDT Offshore, the Cyprus Mail has learned.

The deal, which sources said was imminent, would clear the path for oil major Total to drill their first exploratory well in Block 11 of Cyprus’ Exclusive Economic Zone.

“An arrangement between EDT and G.A.P. Vassilopoulos and P&O Maritime is expected sometime over the next few days,” sources apprised of the matter said.

It would allow EDT to provide Total with onshore logistical support out of the port of Limassol for a period of two years, effective immediately until the end of 2018.

The sources declined to elaborate pending the deal being finalised.

In early October, Total and EDT offshore signed a contract where the latter would provide the former onshore logistics services out of the port of Limassol supporting Total’s drilling programme.

Total at the time announced they were poised to drill their first exploratory well in Block 11 in April 2017.

The marine services concession at the port of Limassol – after it was privatised – was granted to a partnership comprising the G.A.P. Vassilopoulos Group and P&O Maritime, for the next 15 years.

Likewise the G.A.P. Vassilopoulos Group in partnership with DP World will be handling the multi-purpose terminal of the port for the next 25 years.

But the concession, granted by the Cyprus Ports Authority, included a monopoly clause for those areas of the port given over to the consortium.

Citing the concession agreement, the concession holders said that any oilfield services at the port must therefore either be handled by them, or at least go through them.

They argued that therefore any arrangements between Total and EDT were void as they violated their own agreement with the government to operate the port.

In what appears to be a monumental foul-up, the monopoly clause in favour of the port’s new operators came to the transport ministry’s attention only after Total and EDT had put ink to paper in their deal.

It has also been reported that the monopoly clause was inserted during the final-stage negotiations between the government and the G.A.P. Vassilopoulos Group- DP World consortium; it seems the clause was not part of the original tender documents to privatise some of the port’s services.

It’s understood that the deal now between EDT and the G.A.P. Vassilopoulos and P&O Maritime partners is but a stopgap, as far as Total’s programme is concerned. While the arrangement does allow the energy company to use the Limassol port facilities until the end of 2018, beyond that there is a question mark.

That will be especially true should Total, which has also bid in the third offshore licensing round, were to be awarded another exploration concession.

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