Cyprus Eyes More Exploration After Zohr Gas Find, Minister Says

  • Country studying timing for further oil, gas licensing rounds
  • Egypt's Zohr gas field is close to maritime border with Cyprus

The discovery of the Zohr natural-gas field off Egypt opens up the possibility of further exploration and new finds elsewhere in the eastern Mediterranean, including in Cyprus, Energy Minister Georgios Lakkotrypis said.

Eni SpA has said the “super giant” field it found in August is the largest discovery in the Mediterranean Sea. The deep-water deposit, close to the maritime border with Cyprus, may hold 30 trillion cubic feet of gas, equivalent to 5.5 billion barrels of oil, according to the Italian company.

Zohr marks the first time gas has been found in carbonate rocks in the eastern Mediterranean; discoveries off Cyprus and Israel have so far been made in porous sands. That presents the potential for more finds in a broader geological area, according to Lakkotrypis, who said “we’re feeling optimistic about future exploration prospects.”

While Eni’s exploration bet paid off, energy companies around the world are scaling back the search for hydrocarbons after oil and gas prices collapsed. France’s Total SA, which owns exploration rights in Cypriot waters, announced a fresh round of investment cutbacks in September while Korea Gas Corp., also holding rights in the area, was unprofitable the past two quarters. Yet Cyprus is attracting interest following Zohr’s discovery, according to Lakkotrypis.

Exploration Prospects

“We’re seeing as time progresses more oil companies being interested in understanding what Zohr means, despite depressed prices in international oil markets," he said in an interview in Nicosia. Companies that already have exploration rights, as well as those that acquired geological data in previous licensing rounds, have shown interest, he said.

It appears that Zohr’s geological structure extends into Cyprus’s exclusive economic zone and the country is looking at timings to open further licensing rounds in the area, according to the minister. "While we’re waiting to see whether the gas reservoir itself carries on into Cyprus waters, the biggest potential is from other possible carbonate plays,” he said.

Related tickers:
ENI IM (Eni Spa)
FP FP (Total SA)
036460 KS (Korea Gas Corp)
Noble Energy Inc (NBL US)

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