The Government of Cyprus and the joint venture ExxonMobil and Qatar Energy on Friday signed the Contract for Exploration and Proportional Allocation of Production and the Hydrocarbon Exploration License for block 5 in the Cyprus Exclusive Economic Zone (EEZ).
The contract was signed by Energy Minister Natasa Pilides, ExxonMobil Cyprus CEO Barnabas Theodosiou and Director of Qatar Energy’s International Upstream and Exploration Ali Al-Mana.
This is the tenth piece of the Cypriot EEZ licensed out of a total of 13. The consortium already holds the license for the adjacent block 10 (also known as the Glafkos field), where, in 2019, it discovered an estimated 5 and 9 trillion cubic feet of natural gas.
Speaking at the signing ceremony at the Presidential Palace, in the presence of the US and Qatari Ambassadors and other officials, Ms. Pilides said both the Government and the consortium recognized the geological prospects and potential production synergies and concluded the terms of the contract, which was signed today after five months of negotiations.
we proceed on the basis of international law and the law of the sea. This has always been the principle on the basis of which we proceed with the issues of our EEZ and we will continue to do so
"As such, and despite the increasingly difficult working environment for the global oil and gas industry, we are taking a decisive step today towards strengthening our mutually beneficial cooperation in the Cypriot EEZ," said the Minister of Energy.
She noted that the consortium planned to begin work in 2022 based on the collection of seismic data from this site.
For his part, Mr. Theodosiou stated that this development in combination with the research activities of the consortium in the neighboring block 10 "allows us to further expand our presence in Cyprus in what we believe is a promising area for offshore research activities".
He expressed the appreciation of the consortium for the very constructive approach with which the Cypriot Government had consistently demonstrated, along with a strong synergy, cooperation and commitment to the activities and plans of the company.
"We highly appreciate the strong cooperative relationship with the Ministry of Energy, Trade and Industry and anticipate the continuation of cooperation with the Cypriot Government "to help realize the country's prospects in the field of hydrocarbons", he concluded.
Answering a question from a journalist, on the sidelines of the ceremony, whether the Government or the companies are concerned about Turkey's claim that part 5 belongs to the Turkish EEZ, Ms. Pilides said that the companies have made a very significant investment both in terms of the obligations arising from the contract as well as the time we have spent to get to this point.
"I do not think that if this was a concern we would have this result. Certainly, we proceed on the basis of international law and the law of the sea. This has always been the principle on the basis of which we proceed with the issues of our EEZ and we will continue to do so," she said.
In response to a question, Ms. Pilides elaborated that it was too early to quantify the prospects of block 5.
As she explained, although the geological data show that it is connected to the neighboring block 10 and that by itself this block has "quite promising messages", however, there are no detailed seismic studies for this block.
"Therefore the first concern of the consortium and the first works will have to do with the collection of seismic data, which we believe will be able to provide much more information", she added, noting that she hopes that the seismic research will start in the first half of 2022.
In relation to the confirmation of drilling in block 10, Ms. Pilides said that it is expected to start before the end of the year.
"We are doing well with the preparation and we believe we are able to confirm that they will proceed with the start of drilling before year's end. Therefore, everything is going well and we are in the last stages of preparation ", she concluded.
Prior to the signing ceremony, the delegation had been received by the President of the Republic.