CyprusGasNews May 2014 May. 2014 | Page 4

Address by the Minister of Energy, Mr Y. Lakkotrypis, at the Global Offshore Technology Conference and Exhibition, in Limassol. Optimistic for more natural gas discoveries. I feel truly honoured to be joining you today and I wish to thank the organisers for giving me the opportunity to address today’s Global Offshore Technology Conference and Exhibition, an event which focuses on the latest market and technology trends related to the exploration, drilling, production, processing and marketing of hydrocarbons in our region. I am confident that the views and suggestions of the distinguished speakers as regards both the energy developments in general, as well as the energy strategy in Cyprus and the broader Eastern Mediterranean region, will prove to be useful tools for setting our next steps. There are some basic elements that come to mind when we think about Cyprus: an island state in the Eastern Mediterranean, at the crossroads of Europe, Asia and Africa, a member state of the European Union at its south-eastern corner, a country affected by its historically turbulent neighbourhood, an island recently blessed, together with its neighbours, with the discovery of hydrocarbons, and, sadly, the last divided EU member state. The very promising potential of hydrocarbon resources in the Eastern Mediterranean was assessed by the US Geological Survey in 2010. For the Levantine Basin, a mean of about 1.7 billion barrels of recoverable oil and a mean of 122 Tcf of recoverable natural gas were estimated, whereas for the Nile Delta Basin the corresponding estimates rose to a mean of about 1.8 billion barrels of recoverable oil and a mean of 223 Tcf of recoverable natural gas. 4 |CyprusGasNews Besides Cyprus, which I will discuss in a minute, as of today nearly 40 Tcf of natural gas have been discovered in offshore Israel, and, according to Lebanese officials, preliminary surveys in Lebanon indicate reserves of about 30 Tcf of natural gas. Moreover, there are encouraging indications for oil discoveries in the offshore area of Cyprus. It is therefore evident that the Eastern Mediterranean is quickly becoming a new and very promising frontier region for oil and gas production. Following the first licensing round in 2007, Cyprus signed an Exploration and Production Sharing Contract with Noble Energy International Ltd, granting them an exploration license for Block 12. Israel’s Delek and Avner also joined this license in February 2013. In February 2012 a second licensing round was launched. As a result, Cyprus entered into another five Exploration and Production Sharing Contracts, granting three exploration licenses to Eni and KOGAS for Blocks 2, 3 and 9, in January 2013 and two exploration licenses to Total E&P Cyprus for Blocks 10 and 11, in February 2013. December 2011 was a milestone month. The result of the first exploration well in Block 12 showed a significant natural gas discovery of 5 to 8 Tcf, with a mean gross estimate of 7 Tcf. The subsequent appraisal process in October 2013, confirmed the presence of an estimated gross resources of the field in the range of 3.6 to 6 Tcf of natural gas, with a mean of approximately 5 Tcf. The Aphrodite structure in Block 12 represents the third largest field discovered to date in the deepwater Levantine Basin. The exploration activity will continue in 2014, with one more exploration well for gas in Block 12 and possibly another appraisal well in the Aphrodite field. At the same time, exploration activities are also well underway in the other five licensed Blocks and the first exploration drilling is expected in the third quarter of 2014. We are, in fact, cautiously optimistic for further discoveries, since the preliminary evalua