International Players Scramble to East Mediterranean Gas
Various reports indicate that major international energy companies have accelerated their moves to enter the research process in the Eastern Mediterranean natural gas fields, by attempting to join with established companies already operating in the region such as Noble Energy.
Gazprom, Gaz de France, and Gas Natural are amongst the contenders reportedly in talks with the Israeli company Delek Group and Noble Energy regarding potential joint investments for the “Leviathan” and the "Aphrodite" prospects offshore Cyprus.
According to Cypriot media sources, Noble Energy is seeking to establish partnerships with international players that have access to significant consumer bases, thus being able to raise significant amounts of capital in order to proceed in the exploration process in the coming period.
Noble holds 70% of exploration rights for Aphrodite, estimated as 3.9 trillion cubic feet and 40% of the Leviathan with 6.8 trillion cubic feet. In parallel exploration drills are set underway for potential oil reserves.
Regarding the impeding second round of Cyprus offshore exploration licenses, Israeli energy specialists have commented that "It is quite possible that major international energy companies that are really interested in investing will back off due to Turkish disagreement".
The new round was announced by the Cypriot government on 13 February, with 12 offshore blocks available off the southern coast.
The Israeli business news service, Globes reports that Russian, French and Chinese energy groups have decided, but not yet announced, not to participate in the 2nd round due to Ankara’s lobbying efforts and due to the lowering of expectations regarding estimated natural gas reserves.
Gazprom reportedly is involved in the export of 26 billion cbm per annum to Turkey and has other energy interests at risk, is taking seriously Turkey's adamant opposition to Cyprus' offshore activities in the Eastern Mediterranean. On the other hand Cypriot energy sources contradict this information by stating that exactly for that reason Russians are interested in venturing in the region, so as to gain further leverage in their negotiations with Turkey.
Israeli companies Ofer Nimrodi, and Israel Land Development Energy Company are thought to be pusuing the 2nd round exploration licenses as they already hold interests in Myra & Sharah Mediterrean blocks. Further, they have already established communication lines with the Cypriot government and expressed their will to invest offshore the Island.
Other companies interested, but have not decided for their involvement yet, are Dor Alon Energy, which holds 4% of the Tamar field, Isramco, Moddin Energy and ATP Oil & Gas.
In the meantime, Lebanon initiated a new round of seismic researches with the exploration vessel Pacific Explorer of the Norwegian PGS in the Lebanese Exclusive Economic Zone (EEZ), around 70 Miles South East of the Cypriot Cavo Greco Cape, close to the disputed EEZ zone with Israel.
All in all, the information streaming from Cyprus and Israel, indicates that although there seems to be considerable interest into exploring and exploiting natural gas fields in the region, the combination of international political problems and the intense competition of just too many well-established local and international players, may hinder developments. It may take some time before clarity on various joint ventures is achieved.