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Total to Pull Out of Cyprus Oil, Gas Search

Total to Pull Out of Cyprus Oil, Gas SearchTotal to Pull Out of Cyprus Oil, Gas Search

French energy giant Total is expected to abandon its search for oil and gas off Cyprus, the island’s Energy Minister George Lakkotrypis said on Wednesday, AFP reported.

He said the government had been informed last September that Total has failed to locate any targets to test drill in the blocks it is licensed to exploit. “It has not found any geological structures or targets to continue its obligations,” Lakkotrypis told public radio.

“There will be a final decision next week as there are contractual obligations,” he added.

The minister said Total’s decision to cut its losses was based on “commercial viability” and not Turkish threats to prevent Cyprus developing its offshore energy reserves before a deal is reached to end the decades-long division of the island.

News of Total’s likely withdrawal comes after Italian-Korean energy consortium ENI-Kogas said its first test drill had come up dry and puts a new dent in Cyprus’s hopes of becoming a regional energy player.

Cyprus has ambitions to become a hub not only for its own gas exports but also for its neighbors, but it needs to find more gas reserves to make a proposed land terminal financially viable.

It wants to build a liquefied natural gas plant at Vassiliko on the island’s southern coast and has commissioned US firm Noble Energy, with its Israeli partners Delek and Avner, as well as Total, to carry out feasibility studies. But it now seems there are insufficient reserves to make that option feasible.

 

Financialtribune.com