Cyprus mulls natgas licensing round as demands remains robust
By Michele Kambas
NICOSIA, Nov 13 (Reuters) -Cyprus is considering a new licensing round for offshore natural gas exploration as demand remains strong despite global attempts to move away from fossil fuels, its energy minister said.
Tucked in the north-eastern corner of the Mediterranean, Cyprus has reported several discoveries since 2011 containing an estimated 15-16 trillion cubic feet (tcf) of untapped natural gas - the equivalent of nearly half the yearly output of the United States, the world's largest producer.
That has spurred interest from international companies amid uncertainty about supplies from Russia since its full-scale invasion of Ukraine in 2022, and about the future of new liquefied natural gas projects.
"We are in the process of evaluating potential interest," Energy Minister George Papanastasiou told Reuters when asked about the potential for a new licensing round. "Upon seeing some interest we may decide to go for another licensing round, yes."
The east Mediterranean has yielded major gas discoveries in the past decade, mostly off Israel and Egypt. Cyprus has 13 offshore blocks, 10 of which are under licence to energy majors including Eni ENI.MI, Exxon Mobil XON.N Chevron CVX.N and TotalEnergies TTEF.PA.
Blocks on offer could be either those not under licence, or blocks where operators may wish to relinquish their licence, Papanastasiou said, without going into detail.
"If we see any evidence that some of these blocks may be released, we may decide to go for another licensing round," he said.
Papanastasiou, who worked with energy majors for 40 years before his appointment as energy minister in 2022, was recently in Abu Dhabi, where he had contacts with senior officials of United Arab Emirates' giant Abu Dhabi National Oil Co. (ADNOC).
The potential for the region was continuing to generate interest, he said.
"We need to develop this wealth ... and this is what we intend to do," he said.
Cyprus has a target of generating 33% of its energy from renewable sources by 2030, up from 19% today. But despite almost year-round sunshine, a lack of power storage and an ageing grid have limited renewable output, especially for solar.
In the coming weeks, authorities will launch tenders for solar battery storage facilities that will help meet those targets, the minister said.
"We believe it is achievable" to meet the targets, he said.
Still, he acknowledged that natural gas was attractive - it is less polluting and cheaper than the heavy fuel oil now firing the grid.
"Natural gas still has a few decades of survival, of life in this (energy) mix."
Papanastasiou said he anticipated a gas field discovered in 2022 by Italy's Eni and France's TotalEnergies would be the first to enter production, around 2027, while another operated by U.S major Chevron would be closer to 2029 or 2030.
Reporting by Michele Kambas; Editing by Edward McAllister and Mark Potter
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
