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Cyprus Mail
Business Energy

Energy companies assure are committed to Cyprus drilling

Energy companies licensed to prospect for gas off Cyprus have assured the government they are committed to their contracts despite inevitable delays due to the coronavirus situation, MPs heard on Tuesday.

In a teleconference session with lawmakers, Energy Minister Giorgos Lakkotrypis said drilling programmes by Total and ENI, and by ExxonMobil, are being put on hold but only temporarily.

For Total and ENI – which had planned to carry out three drills in the 2020-2021 timeframe – the minister said their contracts would have to be extended.

The consortium had been scheduled to first drill a new (exploratory) well at a site dubbed Kronos in block 6 of Cyprus’ exclusive economic zone, around April this year.

It’s understood that schedule has been pushed back by roughly one year. A day earlier, the Cyprus Mail learned that Total and ENI have retained the capital expenditures allocated to these operations.

Regarding the American giant ExxonMobil, it had planned two appraisal drills for around September this year; these have now been postponed to September 2021.

ExxonMobil had been due to drill appraisal (or follow-up) wells at the Glafcos site in block 10.

The Glafcos reservoir, bearing an estimated 5 to 8 trillion cubic feet of gas, is the largest gas discovery to date off Cyprus. The appraisal drilling would help the company with its commercialisation decision.

Following the briefing by the minister, MP Andreas Kyprianou, chair of the House energy and commerce committee, told the Cyprus News Agency that electricity bills are soon expected to drop sharply.

Amid depressed oil prices globally, the electricity utility has secured futures contracts at low prices. The next bi-monthly electricity invoices, in June, should therefore see a decline of at least 10 per cent.

Last month the Electricity Authority of Cyprus (EAC) announced it had pre-purchased 60,000 metric tonnes of fuel oil.

Kyprianou said also the commerce ministry is considering a proposal that would allow businesses operating in industrial zones to withhold rent payments for a limited amount of time, as relief due to the economic situation brought about by the Covid-19 restrictive measures.

The commerce ministry is favourably disposed to the idea, but will need to get the nod from the finance ministry before it can proceed.

During their conversation with Lakkotrypis, MPs were additionally informed that the government has filed to register a trademark for halloumi cheese in China.

“The application was filed in March, and is expected to take about nine months. So by year’s end the Chinese market could open up for this Cypriot product,” noted Kyprianou.

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