By Costas Constantinou
Energy is really the new born industry in Cyprus, welcoming worldwide attention and serious global investment following the discovery of sizeable natural gas reserves in its exclusive economic zone (EEZ) and the Eastern Mediterranean region. One of the biggest opportunities for foreign investment in Cyprus will be in the oil and gas sector.
Cyprus energy developments have certainly placed the country centre stage with the unfolding discoveries in the Eastern Mediterranean generally, offering a stable and secure base in an increasingly turbulent region. Cyprus is also a convenient location to set up operations for various auxiliary services to the oil and gas industry.
The government hopes to complete the necessary infrastructure for an energy centre at Vassiliko, near Limassol and begin exporting gas in the 2020s.
In 2011 US firm Noble Energy, which is developing Israel’s giant Tamar and Leviathan gas fields in the Eastern Mediterranean see announced a sizeable discovery of natural gas in Cyprus’ offshore EEZ block 12 – known as Aphrodite. Two years later Noble carried out appraisal drilling and confirmed natural gas reserves of 4.54 trillion cubic feet which represents Cyprus domestic demand for hundred years.
The Exclusive Economic Zone delimitation agreements cover all the coastal states with which Cyprus shares sea boundaries in accordance with the UN Convention on the Law of the Sea. These agreements Cyprus concluded with Egypt, Israel and Lebanon have established not only the sea boundaries between Cyprus and the three neighbouring stales but also the boundaries between EU and the Middle East. These agreements also provide legal security to oil and gas companies to freely pursue exploration and exploration of hydrocarbon in the region.
Interested stakeholders come closer together through seeking opportunities not only for the joint development of potentially common hydrocarbons, but also for shared cooperation on other issues of mutual interest such an economy and trade.
Until now there have been 33 applications for exploratory licences. At this moment the following bidder have been selected for negotiation over terms and conditions. Eni Total consortium, block 6 Eni; Kogas, block 8; ExxonMobil and Qatar Petroleum consortium, block 10 and Noble Energy, block 12.