One step closer to the exploitation of estimated 60 trillion cubic feet of natural gas under the seabed of Cyprus

Four additional permits out of the second licensing round have been granted for exploration rights in the Exclusive Economic (EE) Zone of Cyprus. Quoting Solon Kassinis, Cyprus Energy Service Director, exploitation of estimated 60 trillion cubic feet of natural gas within the island’s EE Zone will, on the long run, turn the current situation around with an immense financial impact to the economy of anywhere between $300 and $600 billion.

The stepping stone set in 2008 by the successful discovery of US Noble Energy on the block 12 of the Aphrodite offshore natural gas field, will now be followed by the consortium made of Italy’s Eni SpA (ENI) and South Korea’s Kore Gas Corp. on blocks 2 and 3; consortium of France’s Total SA, Russia’s Novatek OAO (NVTK) and GPB Global Resources (subsidiary of Gazprombank) for block 9; and France’s Total on block 11. The agreements on the exploration contracts are under negotiations between the consortiums and Cyprus Government.

With a bonus payment upon signature of the exploration agreements, based on production sharing contracts (PSC), Cyprus Government is looking at probable $200 million in revenues, on the top of which 70% to be received after recoverable expenses from the PSC’s.

Target: Export pipelines and liquefied natural gas (LNG) trains operational by 2019.

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