Cyprus Paves Way for Multi-national Development of Gas Fields

Cyprus has narrowed down a long-list of concession bidders announcing talks with Italian, French, Russian and Korean interests for development of offshore natural gas fields.

Newsagencies reported that the island state would negotiate with Italy's ENI, South Korea's Kogas, France's Total and Russia's Novatek. The gas fields lie to the south and east of the eastern Mediterranean island.

They are situated near a field being developed by Noble Energy of the US.

Cypriot energy minister, Neoclis Sylikiotis, said development of the fields would assist the "sustained and sound" economic development of his country. "The reason we decided to move ahead with these four areas is to create economies of scale, bearing in mind the synergies from the geographic proximity to block 12," Reuters quoted Sylikiotis as saying.

Cyprus has been one of the victims of the world financial crisis. In June it sought an European Union/IMF bailout after it lost the ability to borrow on international capital markets because of fiscal slippage.

Tuesday's decision relates to a joint bid by ENI and Kogas for two offshore blocks, a joint bid by Total and Novatek for one block, and a fourth bid by Total, Cypriot authorities said. Cyprus reported a significant natural gas discovery of between 5 trillion and 8 trillion cubic feet (tcf) of gas in block 12 in late 2011.

Related Reading: Cyprus Moves on for LNG Option