A LITTLE less than two months after the exploratory drilling began at Plot 12, Noble Energy released information about the operation and the prospects of finding natural gas. Probability of geological success was estimated at 60 per cent, which would seem rather small, but which energy experts described as a positive indication.
The estimates of the deposits was between three to nine trillion cubic feet (tcf), lower than the government’s self-styled expert on natural gas, Solon Kassinis had been predicting, but it is very likely that Noble was exercising caution. This was information that came with qualifications which is what we would expect from a company with long expertise in exploratory drilling.
It put into perspective the euphoria generated by the forecasts made by Kassinis which were determined by his gut feeling and were unquestioningly adopted by the media and the political parties. This unjustified euphoria needed to be checked because it was veering out of control, even though it provided some much-needed relief in these bleak economic times.
Any optimistic news, however, that would encourage the government not to take more measures would, in the medium-term be harmful to the economy. The cautious presentation to investors by Noble could also explain why little was made by the media of the revelation that there was ‘deep oil potential of 3.7 billion barrels of oil equivalent across the company’s acreage’.
There was a part of the presentation that should have caused some concern in Cyprus. A vice-president of the company said that several options for the exportation of natural gas were being explored. The establishment of a liquefaction plant in Cyprus or Israel were two of the options; another possibility was using Egypt’s liquefaction plants while the company was also considering setting up a floating liquefaction plant.
There was no doubt that Noble would look for the most profitable solution, but there is a suspicion the Cyprus government was not promoting the Cyprus option as much as it should be. Noble raised the possibility of a liquefaction plant in Israel, which was not meant to have been an option. Israel had been persistently promoting the idea of a joint venture that would be based in Cyprus. Are other options being explored because the Christofias government failed to give any indication of what it planned to do?
Perhaps, by mentioning other possibilities, Noble was putting pressure on the government to make a decision regarding Israel’s proposal for a liquefaction plant in Cyprus. Presidential indecision, combined with his government’s failure to forge a natural gas strategy could prove costly. Suffice it to say that we have been warned.
