ENI/KOGAS Face Another Dry Hole in Cyprus' EEZ
The ENI/KOGAS consortium failed to find exploitable amounts of natural gas in Block 9 of Cyprus' EEZ.The disappointment is the second one of its kind since the Italian and North Korean partners began gas explorations in Cyprus' maritime zone.
Despite the setback, the minister of energy of Cyprus Yiorgos Lakkotrypis said Cyprus will pursue exploratory searches off the island and assured that the disappointing results were not indicative of the island's potential. Since Noble Energy's discovery of Aphrodite in 2011, a field estimated at 4.54 Tcf, the island has not encountered any additional amount of the hydrocarbon in its waters. The field has not been exploited to date. The project for an onshore LNG terminal on the Vassilikos coast has been replaced by a regional pipeline strategy given the modest quantities of natural gas. Cyprus is considering the sale of gas from the Aphrodite field to Egypt and potentially using Egypt's unused export terminals to reach export markets.
Cyprus is relying on gas revenues to lift an economy severely hit by the financial crisis. Neighbouring Israel has made significant discoveries off its coast. The Leviathan and Tamar fields, estimated at 21 and 10 Tcf, will ensure the country's natural gas independence for decades and its entry into the export market. Domestic debates and a dispute between the partners in Israel's largest offshore fields and Israel's competition regulator, have delayed the completion of regional deals between Israel and its immediate neighbours.
Cyprus remains hopeful that future search activities may prove successful. Meanwhile, interrupted peace talks to reunify the ethnically split island are set to resume. The break in offshore activities could allow for some progress towards achieving a sustainable settlement for the island. Gas explorations had triggered renewed tensions between the Cypriot government and Turkey that led to the disruption of the talks in October last year. Turkey's argument that gas finds will not benefit Turkish Cypriots was refuted by Cypriot officials who maintained any gas discoveries will benefit all of Cyprus, both communities included. The year ahead will be decisive for Cyprus as it will reveal the island's natural gas potential as more exploration activities unfold.