Cyprus said Wednesday it was making good progress with a second round of
licensing for exploratory drilling aimed at exploiting offshore oil and
gas deposits.
In October drilling permits, subject to negotiation, were
approved for blocks 2, 3, 9 and 11, and on Wednesday block 10 was also
added to the list.
"Negotiations with applicants for blocks 2 and 3 have made
significant progress while progress has been made in negotiations for
block 11,"said government spokesman Stefanos Stefanou.
However, talks with preferred bidders for block 9--a
French-Russian tie-up involving Total ENP Activities and Novatek
(NVTK.RS)--have ceased, he said.
He said the cabinet had decided direct negotiations should end
as they had been "unsatisfactory," and they would now move on to ENI
SpA (E) and Korea Gas Corp. (036460.SE).
The government is also negotiating a deal with the same Italian-South Korean partnership for blocks 2 and 3.
France's Total SA is still in the running to exploit
block 11 on its own and the government has also decided to negotiate
directly with it for the adjacent block 10.
A launch for tenders for a second licensing round that ended
in May covered 12 blocks. A decision on the remaining blocks will be
made gradually.
US firm Noble Energy Inc was awarded Block 12 and
announced last year that it discovered gas reserves of up to 8 trillion
cubic feet (226.5 billion cubic metres), which has an estimated value of
100 billion euros ($129 billion).
This would satisfy the island's domestic gas needs for decades.
Media reports predict there could be greater riches, not only of gas but also of oil, in adjacent blocks.
Cyprus hopes its energy bonanza can eventually help pull it out of recession as it seeks a European Union bailout.
Turkey
has protested strongly against the Cyprus government's offshore energy
search, branding it illegal and retaliating by beginning its own
exploratory drilling off the breakaway north.
Ankara has warned that companies involved in the Cyprus process could be shut out of Turkey's energy investment.