Noble ‘Could’ Search for Oil Offshore Cyprus

Cyprus Home — 11 October 2012

U.S. firm Noble Energy has said it will carry out follow-up appraisal drilling for natural gas at the Block 12 prospect during the first quarter of 2013.

Speaking yesterday at the Economist’s “Cyprus-EU Presidency Summit” conference in Nicosia, Noble Energy’s Operations Director in Cyprus John Tomic also did not rule out a search for oil in deepwater strata in Cypriot waters.

Tomic said the deepwater Atwood Advantage rig, which Noble has leased for 36 months, would drill for oil in Israel’s Leviathan 1 field, after which it “could” be brought over to the Cypriot fields.

“There is no evidence to suggest there is no oil there [in Cypriot waters],” he offered.

The rig’s first mission will be at Leviathan, beginning in the fourth quarter of 2013. The drillship Atwood Advantage is currently under construction by Daewoo Shipbuilding & Marine Engineering Co., Ltd. in South Korea. Delivery is anticipated in the fourth quarter of 2013.

Tomic’s comments confirmed earlier reports that Noble would early next year be pressing ahead with appraisal drilling at the ‘Aphrodite’ well. Last August the U.S. company published two bids for contracts in the government gazette. One of the tenders called for “bit and hole opener services” – industry jargon for the equipment used to drill undersea wells. The second tender invited bids for “subsea test tree services in support of drilling operations in Block 12…for one firm deepwater well.”

Although Tomic cited 1Q 2013 for the appraisal drilling in Cyprus’ Block 12, Under-Secretary to the President Titos Christofides – addressing the same conference – was somewhat more specific, saying drilling would likely commence in February.

Meanwhile Commerce Minister Neoclis Sylikiotis revealed that by month’s end the government would pick the companies bidding in the second offshore licensing round. Negotiations with the selected bidders would then commence.

He said the bids have been assessed by an advisory panel, and its recommendations would be forwarded to him in a matter of days.

The government expects to make several millions from signature bonuses. A payment is made up front to the host country for the right to develop a block commercially before work begins. Paying a signature bonus for a license does not necessarily imply future revenues for the company from oil production in the same license.

Sylikiotis went on to say that procedures have been set in motion for the establishment of a National Hydrocarbons Fund, the proceeds of which will partly go into investing in gas infrastructures, a percentage will go toward the state budget and a portion saved in an investment fund “for the benefit of future generations.”

The minister said Cyprus will be hosting on December 13 a conference on offshore drilling safety and cooperation of the EU with the countries in the eastern Mediterranean region. He said all regional countries have been invited, including Turkey.