Cyprus, Greece eye East Med gas discoveries for EU export

ENERGEAN OIL & GAS

Energean’s Prinos “Alpha” Platform in northern Greece. James Eftstathiou, Exploration Director of Greece’s Energean Oil & Gas, spoke to NE in Athens about the latest discoveries in the East Mediterranean.

Tiebacks to the LNG facilities in Egypt, LNG in Cyprus, the East Med pipeline are among the options being considered


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ATHENS – More offshore hydrocarbon discoveries from the East Mediterranean region similar to Egypt’s giant Zohr field could boost gas exports to Europe.

“At the end of the day, it’s how much volumes are discovered in the region, James Eftstathiou, Exploration Director of Greece’s Energean Oil & Gas, told New Europe in an interview on October 3 in Athens on the sidelines of the Balkans Petroleum Summit, organised by In–VR Oil & Gas. He was asked how viable are gas exports from Cyprus, Greece and Israel to Europe given the latest developments in the East Med.

“Clearly Israel has discoveries, which more than meet its domestic needs. Egypt, with the discovery of Zohr, will probably achieve that. But Egypt is such a huge country and a huge economy that I would imagine that within probably the next four to five years it may actually need more gas than it’s currently being supplied so they are going to rely on more discoveries being brought in. I think the big one is future drilling, if you can follow up Zohr with additional discoveries,” Eftstathiou said.

“My understanding is Cyprus recently finished an exploration well. But they are two high-profile wells being drilled on the same kind of geological plate, same reservoirs and seals as Zohr, so they are sort of Zohr lookalikes,” he said. “I believe two wells are going to be drilled in Cyprus in 2018 targeting those,” he said, adding the US major ExxonMobil would be drilling in Block 10. “For me, if you follow up Zohr with more discoveries, hopefully it can be followed up with many more and then it depends what the critical mass of gas is and then they can look at what would be the development solutions,” Eftstathiou said.

In 2017, Cyprus awarded exploration licenses to Italy’s ENI and France’s Total for Block 6, ENI for Block 8 and US major ExxonMobil/Qatar Petroleum for Block 10. ENI acquired a 50% holding in Block 11.

Turning to instability in the region and Turkey’s objections to plans by Total and ENI to drill offshore Cyprus, Eftstathiou stressed that foreign oil majors “are honoring their commitments from licences that were awarded. Overall, I think things – at least from what I can see – they’re progressing actually quite smoothly and that’s a very positive thing because it will just encourage more activities and it’s for the benefit of everyone in the end”.

Regarding export options, he said, “If you have a critical mass of discoveries, then you can start to think about the development solutions. Right now there are so many development solutions being looked at – you have the tiebacks to the LNG (liquefied natural gas) facilities in Egypt, you have got possible LNG in Cyprus, there has been discussions for an East Med pipeline,” he said, refereeing to plans to build a pipeline directly connecting East Mediterranean resources to Greece via Cyprus and Crete, possibly extending it to Italy. “At the end of the day it will be a balance of how much volumes are discovered and what is the most efficient way of developing it,” he said.

Energean Oil & Gas, a Greek energy company, bought the rights in 2016 to develop the Tanin and Karish fields offshore Israel. “We have two major projects and the Karish field will be the first development with first gas planned towards the end of 2020 and that gas is good for the local domestic market,” Eftstathiou said.

“We will be looking at phasing in a development plan. But for the time being the gas in Karish and Tanin is for the domestic market,” he said, adding, however, there are a high proportion of liquids in Karish that can be for export.

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