Recent Energy Developments in the Eastern Mediterranean – Gary Lakes, Director, ERPIC Energy Program, 10 April, 2017
Recent Energy Developments in the Eastern Mediterranean
Gary Lakes – Director, ERPIC Energy Program
10 April 2017
Cyprus moved into a new offshore exploration earlier this week with the signing of production-sharing contracts for three blocks in its exclusive economic zone (EEZ). A license for Block 10 was signed with EXXON MOBIL and QATAR PETROLEUM (QP) on Wednesday and licenses for Block 6 and 8 were signed with France’s TOTAL and Italy’s ENI on Thursday.
Representatives from all four companies stated during signing ceremonies at the presidential palace in Nicosia that drilling in their respective blocks would begin in 2018. It was autumn 2014 when the last wells were drilled in the Cyprus’ offshore. Two dry holes drilled by ENI at Block 9, which along with Blocks 2 and 3 the Italian firm won as a result of the island’s second licensing round in 2012. Only two other wells have been drilled offshore Cyprus – Noble Energy’s Aphrodite discovery well in 2011 and a 2013 appraisal well that put the Aphrodite field at 4.5 trillion cubic feet (TCF).
Cypriot Energy Minister Giorgos Lakkotrypis said during the ceremony with EXXON and QP that during the seven-year course of the licensing period as many as 12 wells would be drilled in the three blocks.
With regard to existing licenses, TOTAL will in mid-July drill its first well in Block 11 which it won in a second licensing round. The Onisiforos well will target the same geology in which Egypt’s huge 30 TCF Zohr natural gas discovery was made by ENI in August 2015. Zohr lies only six kilometers from the Cyprus-Egyptian maritime border and seismic data shows the Carbonite buildup in Egypt extends well into Cypriot waters. Block 11 lies adjacent to Egypt’s Shorouk block where Zohr is located.
The Zohr discovery prompted Cyprus’ largest third tender in 2016 attracting the attention of EXXON MOBIL and QP who’s marked success the LNG sector in Qatar has reignited in Cyprus talks of an LNG facility on the island if resources of which prove large enough. Block 10 is ExxonMobil’s first license in the East Mediterranean, but this week’s exploration and production-sharing contracts now give ENI Blocks 2, 3, 8 and 9, plus fifty percent of Blocks 6 and 11 in which it is partner with TOTAL.
ENI suspended a four-well drilling program offshore Cyprus in late 2014 after the dry holes in Block 9, and then went off to recalibrated seismic model and subsequently discovered the Zohr field. ENI stated previously that it intends to return to Cyprus to complete a suspended program during the second half of this year.
EXXON MOBIL senior vice president Andrew Swiger said his company was committed to conducting 3D seismic in Block 10 and it will drill two wells during the first licensing period.
Russo Carlo Vito, executive vice president for Central and South Europe for ENI said a well would be drilled in Block 8 during 2018, and Eleanor Rowley, TOTAL’s vice president for exploration in the Middle East and North Africa, said drilling would take place in Block 6 also next year. A large amount of the seismic data has already been gathered in the blocks, she said.
Six wells will likely be drilled in the Cyprus offshore before the end of 2018, which by that time will give the island a reasonable picture of its hydrocarbon resources.