Cyprus
licenced
Italy
's ENI and
South Korea
's Kogas for offshore gas
exploration yesterday (24 January), in a boon to an economy in line for an
international bailout because of its exposure to debt-crippled
Greece
.
Cyprus
, which discovered natural gas at
sea in December 2011, issued licences covering three offshore areas lying south
and southeast of the island to a consortium made up of both firms.
"The
discovery of hydrocarbons [around]
Cyprus
, in conjunction with those found in
the wider Mediterranean region, create new realities and prospects for the
country," Cypriot energy minister Neoclis Sylikiotis said.
Cyprus
sits in the
Levant
Basin
, an area of the eastern
Mediterranean thought to be rich in largely untapped reserves.
US Noble
Energy reported discovering between 141 billion to 226 billion cubic metres
in Cyprus's first attempt to find natural resources offshore in December
2011. Neighbouring Israel has made major natural gas discoveries there in the
past few years.
Turkey has
in the past voiced objections to the island exploring for oil or gas. Cyprus
was split in a 1974 Turkish invasion after a brief Greek-inspired coup and the
exploration is being carried out by the internationally recognised Greek
Cypriot government (see background).
Now in line
for an international bailout, Cyprus hopes the prospect of sitting on sizable
hydrocarbons reserves will give its stuttering economy a boost.
The island
sought aid from the EU and the IMF in June 2012 to recapitalise a banking
system badly exposed to Greece.It expects to conclude in March a bailout
deal anticipated to be as high as €17.5 billion, equivalent to its national
output.
>> Read:Cypriot minister defends
island against money-laundering charges
In signing
production sharing contracts with the consortium of the two companies, the
state will earn €150 million, badly needed as Cyprus has been limping along on
short-term high-yield borrowing for the past few months.
Speaking to
Reuters before the signing ceremony on Thursday, Sylikiotis said separate talks
with France's Total, bidding for another two blocks, were progressing well.
"There
are very strong indications of gas, and possibly oil, in the area,"
Sylikiotis said, referring to the offshore maritime area known as the exclusive
economic zone.
He said
there would be synergies from the licencing to ENI and Kogas, since two of the
blocks run in the path of a pipeline planned to transport gas from the Noble
concession to a terminal which will convert gas into its liquefied form
onshore.
Cyprus sees the discovered natural gas reserves
in its economic zone as an incentive forunblocking the island’s stalled
reunification talks.
Lest July,
Sylikiotis told EurActiv that income sharing with the Turkish-populated
Northern part of the island could be solved by creating a national
hydrocarbon’s fund.