The indications of the presence of significant quantities of hydrocarbons in the exclusive economic zone (EEZ) of Cyprus and the decision to proceed with their exploration may prove to be a tremendous opportunity for the island.
The Ministry of Energy, Commerce, Industry and Tourism announced on 19th January 2016 that the Republic of Cyprus and Eni/Kogas consortium have signed a two-year extension of the initial exploration phase in Blocks 2, 3 and 9, which expires on the 23rd of January 2016.
Within the next two years the consortium will conclude studies aiming at better evaluating and recalibrating the geological model of the region, in order to identify prospects necessary to complete its drilling obligations.
In addition, the energy ministry announced on 20th January 2016 that BG Cyprus, subsidiary of British multinational oil and gas company BG Group on 20th January 2016 joined the consortium which has the concession on Block 12 of Cyprus’ exclusive economic zone (EEZ) with a 35 per cent stake.
The agreement was signed between US-based Noble Energy, Israeli firms Delek Drilling and Avner Oil Exploration, BG and Cypriot Energy Minister Giorgos Lakkotrypis.
Noble Energy will maintain operatorship of Block 12 with a 35 per cent stake arising from the Hydrocarbon Exploration Licence, while Delek Drilling and Avner Oil Exploration each hold 15 per cent working interest.
The above developments are especially important, as they reaffirm and advance Cyprus’ energy prospects during a period in which the international oil and gas industry is experiencing challenging conditions. Moreover, they constitute an alignment of upstream and midstream interests, as BG International, a company with substantial technical, financial and marketing capacity is part of the BG Group that holds equity in the LNG export facility at Idku, in Egypt.
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