ECONOMY

Total to pull out of Cyprus hydrocarbon search

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

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.

Ankara says it is defending the rights of Turkish Cypriots who declared a breakaway state in the north of the island in 1983, recognized only by Ankara.

But Cyprus is unhappy that Turkey is determined to search for oil and gas in the same area of the island’s exclusive economic zone where it has already licensed exploratory drilling.

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 Israeli and even Lebanese ones, but it needs to find more gas reserves to make a proposed land terminal financially viable.

[AFP]