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South puts on brave face over Israeli gas deal with BG Group

2 July 2014

Greek Cypriot Energy Minister Giorgos Lakkotrypis said on Tuesday that South Cyprus’ strategic plans remain unaffected by the news that Israeli energy companies would be selling natural gas to Egypt, ‘Cyprus Mail’ reports.

Responding to reports on Monday that Israel’s drilling partners in the giant Leviathan gas field signed a preliminary agreement with British hydrocarbon company BG Group to supply gas to BG’s LNG plant in Idku, Egypt, Lakkotrypis, speaking at the House Commerce Committee on Tuesday, said it was “pivotal” that additional quantities of natural gas were discovered in Cyprus` Exclusive Economic Zone (EEZ).

Furthermore the gas unit of Turkish fuel retailer Turcas is holding non-binding talks with another company to jointly procure natural gas from Leviathan field, while Leviathan’s partners have also started looking into selling gas through a pipeline to Cyprus, the newspaper reports.

Texas-based Noble Energy is Leviathan field’s operator with a 39.66% stake. Avner Oil and Delek Drilling, subsidiaries of Delek Group, hold a combined 45.34%, and Ratio Oil has the remaining 15%.

Noble owns 70% of the rights of the Cyprus Aphrodite field, and Delek Group’s Avner and Delek Drilling Limited Partnership own 15% each.

He said due to the fact that the results of appraisal drilling last year and did not respond to the primary estimations; “we need to look for more natural gas,” he said.  Current gas volumes in Aphrodite make the proposed construction of an LNG plant on the island financially unviable unless more gas reserves are found or Israel pools some of its gas resources with the South.

On new drilling operations due this year, Lakkotrypis said: “We expect that the Italian company ENI and the Korean firm KOGAS will begin at the end of the summer, a few months earlier than scheduled, and we are now holding discussions with Noble to see when their next exploratory drilling will take place, probably at the beginning of 2015,” he said.

As regards Total France, he said that since they would be test drilling in a new area where there were no discoveries so far, they were carrying out an intensive data analysis and their exploratory drilling would take place towards the end of 2015, at western blocs 10 and 11. The results would be known two to three months after that.

Meanwhile,  speaking during his meeting with the President of the Turkish Cypriot Chamber of Commerce Fikri Toros, Turkish Minister and Chief Negotiator of EU Affairs Mevlüt Çavuşoğlu said that if gas reserves around Cyprus are enough for export, the best route for it to be transferred to the EU is via Turkey. He noted that they are communicating with the Turkish Cypriot Ministry of Foreign Affairs within the EU process. Çavuşoğlu said that they are jointly working on chapter 16 with the Foreign Ministry as well as the joint protocols with the TRNC, ‘Kibris Postasi’ reported.

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