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Cyprus launches oil exploration bids February 15, 2007

Posted by grhomeboy in Cyprus Oil Crisis.

Cyprus’ government opened a bidding process Thursday to license offshore oil and gas exploration, despite strong objections from Turkey.

The venture has threatened to revive tensions in the region, where Greece and Turkey contest sea boundaries. The Turkish Foreign Ministry called on prospective bidders to “act with common sense.” “Insisting on the tender process would affect peace and stability on Cyprus and in the eastern Mediterranean,” a ministry statement said.

The first round of licensing involves 11 offshore areas totaling around 60,000 square kilometers (23,000 square miles) in the south, southeast and southwest of Cyprus, the government said.

“So far, many companies from many different countries have shown interest,” Trade and Industry Minister Antonis Michaelides said. They include major companies involved in oil exploration and drilling, he said, but did not give further details.

Norwegian company PGS Geophysical AS already has completed a two-dimensional seismic survey of the area, covering some 70,000 square kilometers (27,000 square miles) to the south, southwest and southeast of Cyprus.

Turkey has warned Cyprus not to search for oil and gas in the area, where it said it also has legal rights and interests. Ankara insists that Turkish Cypriots should have a say in the island’s oil and gas rights.

Turkey does not recognize the Greek Cypriot government on the divided island, and backs a breakaway Turkish Cypriot illegal so-called state in the occupied north area of the Cyprus Republic, where it maintains more than 50,000 troops. The illegal so-called state is recognized only by Turkey, while the Greek Cypriot government is internationally recognized. The Republic of Cyprus is a full member of the European Union.

“Since the Greek Cypriot administration does not represent the entire island, it has no authority to sign deals on behalf of the Turkish Cypriots,” the Turkish Foreign Ministry statement said.

It called on companies and countries who might be interested in the venture “to act with common sense, concerning the sensitivity of the Cyprus problem, and not to harm efforts to find a solution within the framework of the United Nations.”

The Mediterranean island has been divided since Turkey invaded the north in 1974, and occupies the northern part of the Cyprus Republic. A U.N. peace blueprint was rejected by Greek Cypriots and approved by Turkish-Cypriots during simultaneous referenda in 2004.

Cyprus signed a deal with Lebanon last month to mark out sea boundaries and facilitate future oil and gas exploration. It has a similar deal with Egypt. Turkey has warned both countries not to proceed with the deals. But Egyptian Petroleum Minister Amin Sameh Samir Fahmy, who attended Thursday’s ceremony, promised close cooperation with Cyprus.

“I assure you that the Egyptian Ministry of Petroleum is fully committed to work very close with the Cypriot side, offering all necessary support and experience, to help Cyprus achieve its oil and gas future plans and objectives,” Fahmy said.

French petroleum consultant Beicip-Franlab, which analyzed the seismic survey data, said it was encouraged by the results. “We are pretty sure that there are active petroleum systems presently in existence in the area,” Beicip-Franlab’s Lucien Montadert said. The bidding process ends July 16.

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