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Oil majors show interest in offshore plans of Cyprus February 21, 2007

Posted by grhomeboy in Cyprus Oil Crisis.

Russian, Chinese and US oil firms are among those showing interest in exploring the eastern Mediterranean where there are “very good indications” of oil and gas, the Cypriot Energy Minister said yesterday.

Cyprus launched an international licensing round for offshore exploration of oil and gas last week in spite of opposition from Turkey, its northern neighbor, which has warned the move could stoke tensions in the region. Cypriot Commerce, Industry and Tourism Minister Antonis Michaelides rejected Turkey’s opposition. Nicosia would not back down, he said.

“We are doing nothing more or less than exercising our sovereign rights,” Michaelides told Reuters in an interview.

Cyprus, now heavily reliant on fuel imports, which represent 16 percent of its annual import bill, plans to open 11 blocks lying south and southwest of the island for exploitation. It is the first time it has undertaken such an endeavor. Cyprus almost immediately faced the ire of Turkey, which supports a breakaway Turkish-Cypriot state in the island’s north.

In a process which runs until July 16, companies can purchase seismic and two-dimensional templates of the Mediterranean seabed, covering about 70,000 square kilometers. Oil majors have shown an interest, and some have purchased the dossier, but it remains to be seen if the interest will manifest itself in an exploration bid, Michaelides said.

“No one is in a position right now to talk about exact quantities of either oil or natural gas,  the two-dimensional and seismic data show there is a good, very good indication of satisfactory quantities of hydrocarbons in the Cypriot economic zone,” said Michaelides.

At a presentation in Nicosia last week, Norwegian and French consultants contracted by the Cypriot government said their data suggested the probability of finding untapped hydrocarbons trapped at depths of up to 3,000 meters, particularly natural gas, was high.

Cyprus will be offering three types of licenses: a one-year prospecting license, an exploration license valid for three years with the possibility of two renewals of two years each time, and an exploitation license, granted for an initial period of 25 years. It can be renewed once for up to 10 years.

It has already presented its plans at road shows in London and Houston, Texas. A presentation was also planned in Russia in March, Michaelides said. “From information I have, some of the big companies have already bought the dossier,” he said, adding that interest was shown from companies based in the United States, Russia, India, China, Germany, France and Norway.

“Whether this interest will turn into an active submission of an application for exploration remains to be seen.”

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