CYPRUS yesterday opened the first round for the licensing of exploration of offshore oil and gas deposits, signalling to Turkey that its threats over the issue were not going to halt the project.
An official ceremony in Nicosia to launch the first phase was attended by
Egypt’s Oil Minister Amin Fahmy, foreign ambassadors, hydrocarbon experts, and representatives from international companies.
Lebanese officials who were also due to attend were unable to travel due to problems at Beirut airport.
Cyprus has signed deals with both Egypt and Lebanon delineating the exclusive economic zones for exploration. Turkey has warned all three counties over the issue, but both Cyprus and Egypt made it clear yesterday that the agreements would be honoured.
“These agreements constitute an example of respect for the independence and the sovereignty of states, which is an element of modern political culture,” said Commerce Minster Antonis Michaelides.
“Cyprus expects from the remaining neighbouring countries to show such modern political behaviour and formulate similar agreements.”
The Minister said the agreements were in line with the UN Convention on the Law of the Sea.
“Thus, the government of Cyprus considers that the time has come for Cyprus to embark on hydrocarbon exploration in its exclusive economic zone, an activity in which neighbouring countries have been engaged for some decades,” Michaelides added.
He said a large number of foreign companies, some of the biggest names in exploration, had shown an interest.
Fahmy described yesterday’s event as “a historic milestone towards achieving future energy stability for current and future generations in Cyprus”.
He said Egypt was fully committed to work very closely with Cyprus and offer all the necessary support to help Cyprus exploit its oil and gas prospects.
“Egypt and Cyprus have enjoyed a historical and long-standing relationship… and we will continue to work together for the wealth of our nations,” said Fahmy.
Speaking after the ceremony, Michaelides said the presence of senior Egyptian officials was a sign that Egypt respected international law and conventions.
Foreign Minister George Lillikas also said the presence of the Egyptian Minister and his team in Cyprus was a clear answer to Turkish threats.
”The government of the Republic of Cyprus has acted in accordance with the UN Convention on the Law of the Sea and based on its sovereign rights,” Lillikas said.
Reaction from Turkey yesterday was muted, in contrast to the furious sabre rattling that followed Cyprus’ deal with Lebanon last month.
Reports from Ankara said the Foreign Ministry had accused the Greek Cypriots of trying to sabotage its bid to join the EU by “stirring up conflicts” and selling the “oil rights of the Turkish Cypriots”.
According to the reports, the Turkish Foreign Ministry called on prospective bidders to “act with common sense”.
“Insisting on the tender process would affect peace and stability on Cyprus and in the eastern Mediterranean,” a ministry statement said.
BOX
Experts commissioned by the Cypriot government said there
was a high probability of finding untapped natural gas reserves
on the Mediterranean seabed at depths ranging from 400 metres to
3,000 metres.
“We are pretty sure there are active petroleum systems in
existence in the area,” Lucien Montadert of Beicip-Franlab, a
French firm that analysed data drawn from the area by Norway’s
Petroleum Geo-Services, said at a presentation in Nicosia.
The round is a competition to acquire existing seismic data
from 11 exploration blocks lying south and south west of Cyprus
towards Egypt. The procedure ends on July 16 and companies will
then be able to bid for exploration rights.
Cyprus will be offering three types of licences. A one-year
prospecting licence, an exploration licence granted for three
years with the possibility of two renewals of two years each
time, and an exploitation licence, granted for an initial period
of 25 years. It can be renewed once, for up to 10 years.
“The main conclusion of our study is that gas and
condensates are to be expected, and oil cannot be excluded from
… oil prone source rocks,” Montadert said.
The procedure that started yesterday Thursday involves making
available seismic data covering about 70,000 square metres
(753,500 sq ft) over the Eratosthenes structure, a sea mount
south of Cyprus, the Levant Basin and the prolific Nile Delta.
The data on offer is two-dimensional, giving less
information than more sophisticated material.
Cyprus will offer sucessful applicants exclusive exploration
rights over the exploration blocks. If a commercial discovery is
made, production would be shared between the licensee and Cyprus
under a production sharing contract.
Cyprus signed accords with Egypt in 2005 and Lebanon this
year, delineating the sea boundaries between them and the limits
of its continental shelf. At present, two exploration blocks on
the side of Lebanon are not included in the licensing round.
