Oil and natural gas in Cyprus
There are considerable quantities, speculative and confirmed, of gas at East Mediterranean sea especially within the Exclusive Economic Zones (EEZ) of Israel, Egypt and such indicators have also turned the attention to Cyprus’ adjacent EEZ which is only 6km away from the recent biggest discovery of gas in the Mediterranean sea in Egypt’s EEZ, namely Zohr field, but also close to two giant field discoveries in Israel’s EEZ, namely Leviathan and Tamar, intensifying the interest in Cyprus’ EEZ despite the current low prices of oil and gas. It is self-evident that for a small island with a GDP of €16.36 bl. for the year 2015, any commercially exploitable gas fields found in its EEZ will have a tremendous impact on its economical growth.
The EEZ of Cyprus is divided in 13 uneven blocks and until now there have been two exploration licensing rounds and a third one is underway. In the first two rounds licensing was granted for Blocks 2, 3, 9, 10, 11 and 12 with some of the undertakers being one of the world’s largest energy companies, such as Noble Energy Inc. and Total. In the meantime Block 10 was returned to the Republic of Cyprus and therefore it forms part of the new third licensing round, along with Blocks 6 and 8, which in fact is currently taking place with the deadline for submission expiring at the end of July 2016 and the decision on the applications expected somewhere around early 2017. Afterwards an agreement shall be signed with these exploration agreements based on production sharing contracts (PSC) for which a bonus payment must be paid upon the signature.
To this point in Block 12, namely the Aphrodite field, an estimated resource of 4.5 trillion cubic feet (contingent and prospective) natural gas was discovered according to the appraisal drilling constituting the reservoir commercial and thus highly exploitable. Recently, as per the existing contract Block 12 has been returned to the Republic, following the expiry of the maximum legal term of 7 years of exploration, minus the discovery of Aphrodite which shall be retained by Noble.