ECONOMY

Cyprus oil exploration plan draws lukewarm response

NICOSIA (AFP) – There was lukewarm response to Cyprus’s tender to search for oil and gas deposits, with only three applications for exploration licenses submitted before the deadline passed yesterday. The Commerce and Industry Ministry later announced that the applicants were a Texas-based energy firm and a British-Norwegian-UAE consortium, none of which has been named for confidentiality reasons. «In total, three applications were submitted for three different exploration blocks,» a ministry statement said. «An application to explore one block was from a company in the United States, while two applications were submitted by a consortium consisting of three companies – from Norway, Britain and the United Arab Emirates.» The government said it was satisfied with the interest shown but expected «livelier interest» in the second phase of licensing, when three-dimensional surveys would be completed. Commerce Ministry official Solon Kasinis told state radio earlier yesterday the government would be «satisfied with four to five applications» to explore 11 of the 13 blocks within Cyprus’s exclusive economic zone. Despite the keen interest reportedly shown in securing a license, none of the major multinationals put in a bid, and expected interest from China and Russia did not materialize. A decision on the successful bids will be made by the end of the year, and the second round will be launched in 2008. Cyprus has warned that Turkey’s continued threats over oil exploration could mean obstacles being placed in the path of Ankara’s EU accession bid. Last week, Cypriot Foreign Minister Erato Kozakou-Marcoullis said Turkey could not continue trying to derail Cyprus’s oil search by threats and demanding it stop the venture. Ankara has reiterated that it will secure its «legal rights and interests» in the region if Cyprus proceeds with oil and gas exploration off its southern shores. And the breakaway Turkish-Cypriot state in northern Cyprus, recognized only by Ankara, has also spoken out. The small statelet’s spokesman Hasan Ercakica said last week that «in case such developments continue, it is natural to expect the escalation of tension in the eastern Mediterranean.» February’s launch of the licensing round came just two days after Ankara announced its own plans for oil and gas exploration in the eastern Mediterranean – a move that triggered protests from the Cypriot government. Cyprus is offering licenses for an area of about 70,000 square kilometers (28,000 square miles). Estimated oil deposits are put at around 8 to 10 billion barrels. Indications show that possible hydrocarbon reserves are at depths ranging from 400 to 3,000 meters beneath the sea. Cyprus has also signed gas and oil exploration and exploitation deals with Cairo and Beirut, triggering strong objections from Ankara. Turkey has warned Egypt and Lebanon to delay the deals, saying they infringe on the rights of Turkish-occupied northern Cyprus. In reaction, Cyprus lodged protests with the United Nations and the European Union.