Lakkotrypis on drilling

Eight offshore drills for hydrocarbons over next 24 months

Cyprus plans to carry out eight offshore drills for hydrocarbons over the next 24 months, the government revealed on Tuesday.

“Activities within the Exclusive Economic Zone are ongoing. For the next 24 months we are planning eight drills, six exploratory and two appraisal drills,” energy minister Giorgos Lakkotrypis said presenting an overview of his ministry’s work over the past year.

He did not disclose where the drills would be taking place, but said the targets have been identified.

The intention is for the drilling programme to commence by the end of this year or early 2020.

On block 7, which is currently unlicensed, Lakkotrypis said that talks are advancing to grant the concession to a joint venture of France’s Total and Italy’s ENI.

At the same time, the government is engaging with these two companies so that they form joint ventures in all the blocks in which they now hold concessions separately.

“We have reached a preliminary agreement… the legal details remain for them to cooperate in all the blocks in which they are not together,” the minister told reporters.

On the Aphrodite reservoir in block 12, discovered in 2011, he said the government is close to a deal with the concession holders – Noble Energy, Shell and Delek.

The companies have submitted a development and production plan which is to be discussed at a workshop this week.

Meanwhile negotiations on revising the Production Sharing Contract – as requested by the three companies – are at an advanced stage. More talks are scheduled for later this week.

“There remain certain legal points relating to the agreement between us, and on the optimal way of exploitation which concerns running a subsea pipeline to the LNG terminal in Idku [Egypt], liquefaction there and then transporting the LNG to world markets,” Lakkotrypis said.

The option of a land-based LNG facility in Cyprus was still on the table, Lakkotrypis added. To that end, land has been secured in the area of Vasilikos for the prospective construction of a five-train LNG plant.

However the facility would require massive amounts of natural gas to make it financially worthwhile.

During the previous week, government officials met successively with all the energy companies active in the EEZ to discuss common planning for such an undertaking.

This dialogue for an LNG facility was at its initial stages.

Regarding the envisioned EastMed pipeline – an EU Project of Common Interest with €34.5m in co-financing pledged by the European Commission – Lakkotrypis said that a tender is underway for a detailed technical study.

The study’s purpose would be to gauge how competitive the mooted pipeline can be.

On Italy’s stance on the EastMed – following recent reports that Rome was getting cold feet – the minister said Nicosia has yet to receive an official briefing from the Italians.

The government expects the Italians to clarify their position after the European Parliament elections.

Regarding the use of FLNG (floating liquefied natural gas), Lakkotrypis said the technology is yet to be proven. But he did not rule out any method for developing Cyprus’ natural gas resources.

As for the newfangled East Mediterranean Gas Forum, the “vision” is for it to evolve into an international energy organisation that will discuss infrastructures and project timetables.

The minister noted that in view of the increased demand for natural gas and thus heightened competition, Cyprus and the eastern Mediterranean must become competitive in the global market.

Asked about the Turkish provocations in Cyprus’ EEZ, he said Nicosia is deploying both diplomatic and legal measures, whether these pertain to Turkey itself or the companies assisting.

“We are using all the tools at our disposal.”

On ‘Green Growth’, the minister said that the share of renewable energy sources (RES) in gross total energy consumption in Cyprus currently stands at 9.72 per cent; the goal is for this to reach 13 per cent by the year 2020.

The share of RES in energy consumption in road transport alone was at 2.6 per cent in 2018, with a target of 10 per cent for 2020. This target would be achieved by a steady increase in the use of biofuels.

Source: Cyprus Mail

Lakkotrypis Minister Exxon

MPs welcome news of gas find

Lawmakers on Tuesday sounded optimistic about ExxonMobil’s recent discovery of natural gas offshore Cyprus, some opining that the find could put the island back on the energy map.

MPs were given a behind-closed-doors briefing by Energy Minister Giorgos Lakkotrypis and head of ExxonMobil Cyprus Varnavas Theodosiou.

Speaking to reporters later, MP and chair of the House energy committee Andreas Kyprianou said the briefing confirmed “the very important results, especially optimistic for the Republic of Cyprus both in terms of energy and geopolitics.”

Last week Exxon announced a gas find of 5-8 trillion cubic feet (tcf) in an offshore field inside Block 10 of the island’s exclusive economic zone (EEZ). The discovery re-ignited talk of construction of a liquefied natural gas facility on the island, although more quantities of gas would be needed.

According to the information given to MPs, the US oil and gas giant is considering further drilling in the EEZ, within Block 10 and possibly in other licensed acreages.

“The signs are encouraging,” said Diko MP Angelos Votsis.

“Most importantly, ExxonMobil are here to stay, and their interest in the Cypriot EEZ remains strong.”

The recent discovery boosts prospects of having an LNG plant in Cyprus, although this would take years and depended on additional gas discoveries, Votsis added.

For it to be viable, an LNG plant would require a capacity of 10 to 15 tcf. The 5 to 8 tcf discovered in Block 10 falls well short of that, but Exxon have intimated they will continue their search for gas.

For his part, Akel’s Costas Costa welcomed the discovery but said that at the same time it puts the onus on the government to develop a coherent and consistent energy policy.

The Akel deputy also asked the energy minister for an update on the talks between Cyprus and Israel regarding the commercial development of the Aphrodite gas reservoir in Block 12.

A small part of the reservoir is said to lie within Israel’s EEZ. The companies involved on either side have thus far not reached agreement on how to divvy up the resources.

According to Costa, Lakkotrypis said only that negotiations with Israel are ongoing.

The energy minister was also asked about the state of play in the talks between the government and the companies holding the concession on the Aphrodite field (Noble, Delek and Shell).

The companies are reportedly seeking to amend the production-sharing contract they signed with the government.

Lakkotrypis told MPs that discussions on this are continuing and that an outcome should be expected “soon.”

Source: Cyprus Mail