ECONOMY

Oil off Cypriot coast?

NICOSIA (Reuters) – Initial data from seismic surveys has yielded encouraging information on oil in the Mediterranean seabed south of Cyprus, its energy minister said yesterday. «We do not want to raise premature and great expectations among the public. What we can say is that the first messages we have are positive and encouraging,» Trade, Industry and Tourism Minister George Lillikas told reporters. There is no oil or gas exploration in the immediate vicinity of Cyprus, reliant on imported fossil fuels which meet some 92 percent of its energy needs. The eastern Mediterranean island contracted Norway’s Petroleum Geo-Services (PGS) which completed two-dimensional seismic surveys south of Cyprus in early May. The data is now being processed, Lillikas said. The surveys will be followed up with more in-depth three-dimensional surveys, which will be restricted to areas where the two-dimensional surveys have pinpointed the potential of hydrocarbons, he said. In early May, Cyprus signed a deal with its neighbor Egypt governing future exploration along the median line in the sea area separating the two countries. The agreement will be applied in the event of reserves found close to the dividing line. One former energy minister, Nikos Rolandis, has said unproven indications of reserves in Cypriot seas have been estimated in the region of six to eight billion barrels of crude. PGS announced its deal with the Cypriot government, signed in December 2005, only after it had concluded its initial research in May. Authorities have cited national security to protect their research from disclosure. Asked if the early data suggested oil or natural gas, Lillikas said: «Oil and natural gas. Both.» Research areas The research covered a 60,000 square km area over the Eratosthenes seamount, Levant Basin and the prolific Nile Delta in the eastern Mediterranean. The Eratosthenes seamount is a submerged mountain lying southwest of Cyprus, extending from the seafloor to within 800 meters of the water’s surface. There has been no previous exploration in the area. For research purposes the area has been divided into two blocks, and the analysis will be complete on the first block in July 2006, he said. Lillikas said Cyprus had also recruited French consultants, Beicip Franlap, to analyze the PGS data and prepare its own report. The Norwegian company will be permitted to sell its data to interested companies, with a share of the revenues being diverted to the Cypriot government. Lillikas said permission for exploration and drilling in research blocks would be permitted after the assessment of tenders. Contracts would be issued under production-sharing agreements in which the state would reap the largest proportion of revenues, he said.