Four or five drills are expected over the next 12 months, Energy Minister Yiorgos Lakkotrypis told MPs on the House Finance committee on Monday.
Grilled on his ministry’s 2018 budget, Lakkotrypis said by the end of next year there will be a clear picture of Cyprus’ subsea natural resources, thus facilitating decision-making.
According to the minister, the government is currently waiting to be informed by Italian energy giant ENI on its planned drilling dates.
“They have already asked for a permit to conduct environmental studies and so on in blocks 6, 8 and 3,” he said.
“At the same time, we have Exxon-Mobil’s stated intention of conducting two drills in the second half of 2018.”
Therefore, the minister added, “I expect four or five drills over the next 12 months, which will be crucial to developments thereafter”.
“That is because by the end of 2018 we will know what Cyprus’ resources in hydrocarbons are so that we can make our decisions with regard to the third pillar of our strategy, which is monetising natural gas,” he said.
Asked about the Turkish seismic vessel Barbaros, which has variously ventured into Cyprus’ exclusive economic zone (EEZ), Lakkotrypis said its movements are “closely monitored by the Republic of Cyprus, so we have a way of knowing where it moved at which time”.
“Of course, we have no way of knowing whether it laid cable or conducted technical research, or whether it was just going around,” he said.
Lakkotrypis did not rule out the possibility that Turkey might acquire a drill and press ahead on drilling in the north of Cyprus, but said there would be more to it than that.
“During this period the oil and natural gas industry is not at its best, it is under pressure,” he said.
“Several companies that own drills or other equipment are trying to sell them. But our intel says that Turkey doesn’t have the know-how to operate a drill. Even if it were to buy one, it would have to seek and commission the services of third parties.”
In any case, he added, the government “has plans in place” for any contingency.
Lakkotrypis urged “everyone, particularly those participating in the campaign to back up their views and promises”.
“There are no easy solutions, nor any headline fixes,” he said.
“I heard yesterday that the state, the public, loses €1 billion annually from not importing natural gas in Cyprus,” he added, referring to a claim made by presidential candidate Nicolas Papadopoulos.
“I must tell you that all our efforts to import natural gas would have raised the cost to the consumer, not reduced it,” he said.
On negotiations for the sale of Cypriot gas between the companies operating Block 12 of Cyprus’ EEZ and the company operating Egypt’s two liquefaction terminals, Lakkotrypis said that in the last two years 18 rounds of talks have been held – “nine for each terminal”.
“The talks are made difficult by international oil prices,” he said.
“So it would be good for those promising the immediate sale of natural gas to explain how they will do what energy giants with armies of experts can’t get done for the last two years.”
He added that more talks will follow in the coming weeks in order to reach what everyone involved can consider a fair market price.