THE state hydrocarbons company KRETYK does not reject any proposals but the interest shown by a Dubai-based bank for advance purchase of natural gas did not appear to be serious, a top official said yesterday.

In a letter to Commerce Minister Neoclis Sylikiotis dated January 23, the Royal Investment Bank said it was interested in the advance purchase of the findings in Cyprus’ offshore field known as Block 12, should the government decide to move in that direction.

“We are ready to commence negotiations as soon as you express your interest, for the determination of the quantities you are willing to sell,” the letter said. “Our bank is ready and willing to discuss your terms and conditions immediately, hence it is our intention to start negotiating as soon as possible.”

The letter was also sent to KRETYK, which responded that “advance selling of natural gas was not possible” but the company was prepared to discuss the possibility of investment with the bank.

“Unfortunately however, after two weeks they have not replied and despite trying to contact them they are not responding,” KRETYK chairman Charalambos Ellinas said. “It shows that they are not serious.”

Ellinas struck a note of caution over leaking such information, which made the company’s work harder and created impressions.

The letter was exploited by presidential candidate Giorgos Lillikas, who has proposed pre-selling natural gas as a way out of the painful bailout conditions imposed by international lenders.

“This proves how right our position was for the potential of utilising our natural gas. We are also certain that other companies exist that will be prepared to submit similar proposals,” Lillikas said.

He also questioned why the government had rejected the proposal so quickly.

“This hasty move raises many questions,” he added.

Cyprus first struck natural gas offshore in late 2011, when U.S. based Noble reported an estimated 7 trillion cubic feet (tcf) natural gas find, close to a major gas discovery by neighbouring Israel.

Ellinas said Noble has received proposals to pre-sell natural gas “maybe from 100 companies, out of which maybe one or two are serious.”

The KRETYK official said the companies were interested in signing long-term contracts and it did not mean that any money would be paid immediately.

“If someone said we’ll give you €5.0 billion for every tcf of course we would respond. But if they say give us the entire Aphrodite field (Block 12) for €2.0 billion, it is out of the question,” Ellinas said.

And Solon Kassinis, an executive director with KRETYK, said talk of advance gas sales was premature.

Appraisal drilling – which will determine how much gas there is in Block 12 – was not expected anytime before June, Kassinis said.

The drilling itself would take three months, and then another three to assess the data.

Last week, Cyprus signed a deal with French energy giant Total to search for oil and gas in two offshore blocks as part of a second licensing round initiated last year.

The deal, for blocks 10 and 11, followed agreement with a consortium of Italy’s Eni and South Korea’s KoreaGas Corp (Kogas) for blocks two, three and nine, concluded last month.

Published by: www.cyprus-mail.com