CYPRUS could begin tapping into its potentially vast offshore deposits of hydrocarbons as early as this year, a senior official said yesterday.
Solon Kassinis, who heads the energy department of the Commerce Ministry, said there were strong indications of sizeable natural gas deposits south-east of the island.
One of the blocks, licensed to Texas-based Noble Energy, could contain gas deposits in the region of 10 trillion cubic feet, he said. This assessment, Kassinis stressed, was based on seismic surveys.
Noble was given exploration rights for one of 11 Cypriot plots up for grabs in 2008, about 65 km away from Israel’s Tamar prospect, the world’s biggest gas find in 2009.
Under exploration rights given to Noble, the company must start drilling work on the Cypriot plot between October 2011 and October 2013.
The most promising block (Block 12) lies in what is known as the Leviathan site, closest to Israel.
The island’s electricity grid is currently powered by heavy fuel oil.
Cyprus recently signed a deal with Israel to mark out their territorial waters and has an agreement with Egypt. An agreement setting out sea boundaries, known as an economic exploitation zone, is pending ratification by Lebanon’s parliament.
“The facts have changed dramatically…and Cyprus could begin exploiting its natural gas reserves in the area in three to five years, much sooner than anticipated or planned,” Kassinis told reporters.
He made the comments after having met earlier with the Commerce Minister, to whom Kassinis handed a report outlining Cyprus’ prospects for exploiting its own reserves.
The report is said to urge the government to give precedence to exploiting the country’s own natural resources over a possible long-term deal to import supplies of Liquefied Natural Gas. The latter option would also involve building a re-gasification facility on the island to process the fuel costing an estimated €800 million.
Kassinis said he outlined possible collaborations with neighbouring Israel for the construction of a pipeline meandering through the eastern Mediterranean, via Cyprus and onto Greece and transporting the fuel to European markets.
Israeli Foreign Minister Avigdor Lieberman will be in Athens tomorrow, with news reports speculating that a pipeline project could be part of his talks with the Greek leadership.
President Christofias is due to pay an official visit to Israel in early March.
Kassinis’ report should give the government something else to think about. Last week the Commerce Minister said Shell had made Cyprus the best competitive offer for a 20-year supply line costing around €4.5 billion, after the government concluded discussions with interested suppliers of LNG.
The disclosure set off a fierce debate, with the majority of parties and independent experts saying Cyprus should not be bound to a huge contract when other, more affordable options, might be available.
Ruling AKEL hit back at the criticism with – so far – unsubstantiated claims that some opposition politicians were motivated by vested interests of their own.
“A consistent effort is being made by certain political quarters to convey the message that President Christofias is incompetent,” AKEL leader Andros Kyprianou said yesterday.
And evidently referring to rumours of kickbacks for those who are in favour of the LNG purchase deal, Kyprianou said both his and his spouse’s “accounts” are available for anyone to see.
The comment left DISY chief Nicos Anastassiades wondering “who spoke of kickbacks in the first place”.
On Shell’s offer, Anastassiades said the issue was not whether this was the best price the government got in the round of discussions with interested suppliers.
“The three best offers are still double the current market prices. When I hear that they [the government] want to pay €3 billion more just to save face [with the suppliers]…but who put us in this position in the first place?”
