Though Turkey has threatened to block extraction of natural gas offshore Cyprus, the Greek Cypriot government has vowed to move forward with exploration and drilling.
Cypriot Foreign Minister Ioannis Kasoulides said that while the two countries were nowhere near an agreement, he was hopeful that progress would be made, and in the meantime, drilling would continue.
“Groups like Noble Energy, ENI and Total would not be investing billions in exploration here if they really thought Turkey was going to stop them," the foreign minister said.
Turkey is opposed to Cyprus exporting oil and gas – saying the energy wealth also belongs to Turkish Cypriots — and been accused of “gunship diplomacy” by the Greek Cypriots. Turkey lays claim to the hydrocarbon blocks to the south of Cyprus and extending to the border of Egyptian waters.
The ongoing issue was resurfaced in international media earlier this month when a Norwegian ship exploring in Cypriot waters was intercepted by a Turkish warship and forced to retreat.
Cypriot officials believe that there may be as much as 60 trillion cubic feet (Tcf) of natural gas in Cypriot waters.
US-based Noble Energy has already discovered 5 trillion cubic feet of natural gas in a single bloc of the offshore Aphrodite field to the south of Cyprus. Based on a preliminary 4.5 tcf assessment of reserves by Noble, the government expects a profit of $12-18 billion over a 14-year period.
Italy's ENI plans to drill in neighboring blocs this year, and France's Total next year.
Still waiting for commercial viability, the government of Cyprus—a member of the European Union—is hoping it will be exporting gas, and possibly even oil, by 2022.
The government is also placing much hope in plans for a $10-billion liquefied national gas (LNG) plant to ship LNG to the lucrative Asian market.
Last year, the island nation’s banking system collapsed, and the government is nearly bankrupt, bailed out only by a $13-billion rescue loan from the EU and the International Monetary Fund (IMF).
By James Burgess of Oilprice.com