Cyprus to receive new offshore natural-gas bids in July

By JONATHAN STEARNS on 5/26/2016

BRUSSELS (Bloomberg) -- The Cypriot government will receive bids on July 22, under the latest round of licensing for offshore oil and natural-gas exploration and expects any agreements with companies to be struck by early next year, Energy Minister Georgios Lakkotrypis said.

The timetable concerns the third licensing round in Cyprus’s exclusive economic zone and relates to Blocks 6, 8 and 10. The Cypriot energy ministry announced the round in March, driven by Eni SpA’s discovery of a big gas field known as Zohr in Egyptian territorial waters just 6 km from Cyprus’s maritime border.

“The reason we went ahead is exactly because we saw very strong interest from companies,” Lakkotrypis told reporters on Thursday in Brussels. “We anticipate that, should we go ahead with licensing, we will conclude that by the beginning of 2017.”

Seeking to become an energy hub in the eastern Mediterranean Sea, Cyprus is pursuing a campaign that began in 2007 with an initial offshore licensing round and expanded in 2012 with a second round. Five exploration and production sharing contracts are currently in place with companies including U.S.-based Noble Energy Inc., which has found the biggest offshore Cypriot gas field known as Aphrodite in Block 12.

Lakkotrypis said that Cyprus intends to open another licensing round for the parts of Block 12 outside the Aphrodite field that Noble and its partners, which include Israel-based Delek Group Ltd., have returned to the government as the contract stipulates.

Because Zohr marked the first time that gas had been found in carbonate rocks in the eastern Mediterranean rather than in porous sands, it offers the hope that searches with the different geological focus will produce more finds in Block 12 as well as discoveries in Blocks 6, 8 and 10.

“Block 12 will be made available for a next licensing round,” Lakkotrypis said. “We haven’t determined when.”

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