Exxon/QP Among Cyprus Bidders

ExxonMobil, partnered by Qatar Petroleum (QP), is the real surprise bid disclosed July 27 by Cyprus among applications for Blocks 6, 8 and 10 in its third offshore licensing round, launched last year. The round has attracted strong interest because of recent gas finds offshore Egypt, Israel and Cyprus.

Round 3 bids involving Italy's Eni and separately Israel’s Delek had been largely expected, and indeed publicised, since the deadline for applications closed on July 22, whereas Exxon and QP stayed under the radar. Cyprus is expected to award the blocks early in 2017.

Exxon as operator, alongside QP, has applied for Block 10. It faces two rival bids: one from Statoil by itself, the other from Eni as operator partnered by Total. Eni with Total have also presented the sole bid for Block 6.

Exxon (initially as Mobil) has worked alongside QP as its LNG developer of choice for over two decades in Qatar and in downstream international markets, and the duo are now reported to be interested in potentially a multi-billion-dollar farm in to Eni and Anadarko’s huge offshore gas discoveries that are likely be developed into multi-train LNG export projects during the 2020s.

The UK’s Cairn Energy (under the Capricorn brand) as operator – alongside Israel’s Delek and Avner Oil – are presenting one of two bids for Block 8, the other coming from Eni. Thus Eni is the only company to have applied for all 3 blocks offered in this licensing round.

The July 27 announcement by the Republic of Cyprus government can be seen here.

Cyprus has five production-sharing contracts in effect: Block 12 with Nobel, Delek and Shell (including the 4.5 trillion ft^³ Aphrodite gas find); Blocks 2, 3 and 9 with Eni/Kogas; and Block 11 with Total. Energy minister Yiorgos Lakkotrypis has said that Cypriot gas might be monetised using Egypt’s pipe and LNG infrastructure.

Lakkotrypis said two months ago that the round had attracted "especially significant interest from multinationals," despite lower oil and gas prices and the tail-off in global exploration spending.

Mark Smedley