|HYDROCARBON EXPLORATION ACTIVITIES IN THE REPUBLIC OF CYPRUS|
|Exploration Hot Spots|
Hydrocarbon Exploration Activities in the Republic of Cyprus
Director, Energy Service – Ministry of Commerce, Industry and Tourism
Andrea Araouzou 13-15, 1421 Nicosia, Republic of Cyprus
Tel.: +357-22409303, Fax: +357-22304964, Email: firstname.lastname@example.org
Cyprus is the third largest island in the Mediterranean Sea and lies at the crossroads of Europe, Africa and Asia. Since 2004 Cyprus is a full member state of the European Union.
Offshore Cyprus is a deep-water frontier area and the water depths vary from the narrow shelf depths around Cyprus to 3,000 m in the Herodotus Basin.
Cyprus is a promising new area for exploration proved by recently gas discoveries in the vicinity of Egypt and Israel which testify that petroleum systems were active in the very thick Levantine and Herodotus basins. These gas discoveries were made by Shell in its NEMED Block in the deep offshore Egypt, close with the median line with the Republic of Cyprus and the Tamar gas discovery, offshore Israel, by Noble Energy International Ltd in the Levantine Basin, which has shown the presence of good deep-water sandstone reservoirs in the Miocene of the Levantine Basin.
Part of the Exclusive Economic Zone (EEZ) of Cyprus, that is located south of the island and covers an area of around 51,000 km2, has been divided into 13 Exploration Blocks. The Government of the Republic of Cyprus held its 1st Licensing Round in 2007 with 11 Exploration Blocks on offer, Blocks 3 and 13 were excluded, covering a total area of 46,000 km2 Offshore Cyprus. One Hydrocarbon Exploration License for Exploration Block 12 has been granted to Noble Energy International Ltd on the 24th of October 2008 for an initial term of three years. The areas open for bidding in the forthcoming 2nd Licensing Round will include Explorations Blocks 1-11 and 13 within the Exclusive Economic Zone of Cyprus.
Invitation for submission of applications for the 2nd Licensing Round will be published in the Official Journal of the European Union and in the Official Gazette of the Republic of Cyprus. Application are submitted to the Minister of Commerce, Industry and Tourism and handled by the Energy Service. Evaluation of the applications is carried out by a special Governmental Advisory Committee.
According to the legislation, the Hydrocarbon Prospecting License is granted for up to 1 year and includes geophysical survey but no drilling. The Hydrocarbon Exploration License is granted initially for up to 3 years, with the ability for two renewals of 2 years each (maximum 7 years). It includes gravity and magnetic surveys, 2D/3D seismic surveys, as well as exploration drilling. On each renewal, at least 25% of the initial licensed area is relinquished. In case of a discovery, the licensee has the right to be granted an exploitation license for that discovery. The Hydrocarbon Exploitation License is granted for an initial period of up to 25 years with the ability for one renewal of up to 10 years.
A number of agreements have been signed between the Republic of Cyprus and its neighbouring countries. The Delimitation of the Exclusive Economic Zone of Cyprus has been agreed and signed with the Arab Republic of Egypt in 2003, based on the median-line principle and in accordance with the provisions of the United Nations Convection on the Law of the Sea (UNCLOS ’82). Likewise, an agreement has been signed on a Ministerial level with Lebanon in 2007. The Republic of Cyprus and the Arab Republic of Egypt have also signed, in 2006, a Framework Agreement concerning the development of cross-median line hydrocarbon resources. Negotiations for the delimitation of the Exclusive Economic Zone of Cyprus with Israel and Syria are under way.
Seismic Surveys – Interpretation Reports
Concerning the data available for the Exploration Blocks, the Energy Service of the Ministry of Commerce, Industry and Tourism of the Republic of Cyprus, in collaboration with Petroleum Geo-Services (PGS), undertook in 2006 a multi-client 2D seismic survey (MC2D-CYP2006) amounting to approximately 6,770 line-km of new data on a 10 km by 20 km grid in area of around 51,000 km2 Offshore Cyprus. A multi-client 3D seismic survey of 659 km2 was also conducted by PGS in 2007 (MC3D-CYP2007), within Exploration Block 3, north of the Levantine Basin and closed to Lebanon offshore boundaries. Following that, a new multi-client 2D seismic survey (MC2D-CYP2008) totalling approximately 12,266 line-km on a 10 km by 10 km grid on the western side and a 5 km by 5 km on the eastern side has been acquired by PGS, using for the PGS’s new dual-sensor GeoStreamer® technology. Dual-sensor streamer benefits are seen in three key areas: (a) enhanced resolution of the seismic image, (b) better penetration revealing deeper targets and (c) improved operational efficiency. Several Direct Hydrocarbon Indicators (DHI) as flat spots, high amplitude zones and gas chimneys are identified in the seismic data.
The 19,036 line-km of 2D seismic data made possible the definition of fourteen plays and many leads on the basis of closed surfaces only. Some of them correspond to major structural features and display a closed surface of several hundred square kilometres. Thus, based on these data, Offshore Cyprus shows great potential for hydrocarbon exploration.
A new interpretation report has been prepared, by Beicip-Franlab, which assesses the hydrocarbon prospectivity offshore Cyprus by interpreting all the 2D seismic data and taking into account the 3D survey. Includes the regional geology, interpreted seismic sections, time and depth structure maps of key horizons, thickness maps of key intervals and plays and leads. This report must be purchased by companies who wish to participate in the oncoming 2nd Licensing Round. Also an interpretation report based on the 3D survey has been prepared, also by Beicip-Franlab, including the regional geological framework, interpreted seismic sections, TWT structural maps of 5 horizons, depth structural and interval maps, the definition of reservoirs, seals and traps and the inventory and volumetrics of leads. This report must be purchased by companies who wish to participate in the 2nd Licensing Round and apply for Block 3. Both Reports are available for purchasing from the Energy Service of the Ministry of Commerce, Industry and Tourism of the Republic of Cyprus, while available seismic data package Offshore Cyprus can be purchased by PGS.
Gas Market Outlet
Final remark is, that present and feature gas discoveries in the South East Mediterranean region (Israel, Egypt, Cyprus etc.) can make a substantial contribution to Europe's energy security. Also the development of a "South-North” Energy Corridor, from Europe to Asia, based on these gas discoveries, could:
(a) turn the East Mediterranean region into an area of sustainable and balanced economic development based on comprehensive cooperation and solidarity,
(b) strengthen cooperation and create the appropriate framework conditions for prosperity, dialogue, stability and peace in the region,
(c) enhance the regional political stability, economic development and reduce the poverty and social divisions, and
(d) improve the bilateral relationships (e.g. Israel - Palestine, Cyprus - Turkey), through the development of synergies, thus ensuring the continuous regional cooperation.