On Wednesday 16 February 2011 over 50 people attended a lecture in Nicosia on the offshore exploration of hydrocarbon, by Solon Kasinis, Director of the Energy Service of the Ministry of Commerce and Industry. Below is a summary of his lecture.
The Cyprus Energy Service has recently undertaken 2D and 3D geophysical surveys in the Exclusive Economic Zone creating 19,000 line-km of 2D seismic data. This made it possible to define 14 plays and many leads on the basis of closed surfaces only. Based on this data, offshore Cyprus shows great potential for hydrocarbon exploration.
The legal framework in Cyprus that determines the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons is favourable and is covered by the Hydrocarbons (Prospection, Exploration and Exploitation) Law and Regulations of 2007 and 2009. The Hydrocarbon Prospecting Licence is granted for up to one year and includes geophysical survey but no drilling. The Hydrocarbon Exploration Licence is granted initially for up to three years, with the ability for two renewals of two years each (maximum seven years). It includes gravity and magnetic surveys, 2D/3D seismic surveys, as well as exploration drilling.
A number of agreements have been signed between the Republic of Cyprus and its neighbouring countries including the Arab Republic of Egypt in 2003, Republic of Lebanon in 2007 and the State of Israel in 2010.
About 51,000 km2 of the EEZ of south of Cyprus has been divided into 13 Exploration Blocks. The 1st Licensing Round for exploration and exploitation licences was announced in February 2007 for 11 of these blocks (excluding 3 and 13). After extensive negotiations, one Exploration License was granted to Noble Energy International Ltd for Block No 12. The first exploratory well is anticipated within the fourth quarter of 2011.
A Strategic Environmental Study evaluating the environmental impacts of hydrocarbon exploration and exploitation activities took place in 2008 and licensees are bound to comply with the recommendations.
The 2nd Licensing Round will include Explorations Blocks 1-11 and 13 within the EEZ of Cyprus. The recent hydrocarbon offshore discoveries in the Eastern Mediterranean have highlighted the enormous petroleum potential of this region. In Cyprus the exploration and production of oil and gas enjoys a favourable legal and fiscal regime.
Cyprus is a promising new area for hydrocarbon exploration evidenced by recently gas discoveries near Egypt and Israel. The development of the gas fields in the eastern Mediterranean could change the nature of the region to an energy supplier, making a substantial contribution to Europe's energy security. Cyprus as a full member of the European Union is the physical path to the EU market. The development of the gas resources in the region will contribute to the development of the region and increase the geopolitical stability. Energy is a key sector for sustainable and balanced economic development based on comprehensive cooperation and solidarity, essential for regional stability and peace.
Read the full document at http://www.ice.org.uk/nearyou/Europe/Cyprus/Offshore-Cyprus-Hydrocarbon-Exploration-Activities