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French Total mulls over pulling out of Cyprus offshore natural gas exploration

Xinhua, January 22, 2015 Adjust font size:

French Total energy giant is considering pulling out of natural gas and oil exploration in Cyprus's exclusive economic zone, Energy Minister Giorgos Lakkotrypis said on Wednesday.

The minister told the state radio that a final decision will be made next week but he added that indications are that Total will definitely discontinue its exploration program due to unfavorable geological factors.

Total had been licensed by Cyprus to drill in two blocks at the most southerly area of its exclusive economic zone some 85 kilometers off the island's shores.

"Total has concluded that the geological structure below the sea bottom does not offer prospects for finding either natural gas or oil," the Minister said.

He explained that Total's decision to pull out of hydrocarbons exploration in the region is in no way connected to a standoff between Turkey and Cyprus over hydrocarbons exploration.

Turkey has sent warships and a seismographic ship to collect data in the sea area claimed by Cyprus under the United Nations Convention on the Law of the Sea.

Lakkotrypis said Total had notified Cyprus in September, even before Turkey announced its plans to conduct seismographic exploration south of Cyprus, that it could not find areas which offered prospects for the discovery of hydrocarbons.

"It was known that this is geologically a very difficult area and Total's surveying has confirmed it," he added.

Lakkotrypis said Total's decision was made purely on economic considerations.

"The company will have to pay compensation for discontinuing its contract but it will avoid risking a very expensive drilling," he added.

Texas based Noble Energy, in association with an Israeli state energy company, has discovered a gas field next to Total's concession containing an estimated 5 trillion cubic feet of natural gas.

Italian ENI, in association with South Korea's KOGAS, is currently exploring for natural gas in a field next to Noble Energy's concession, after a first unsuccessful drilling which ended in December. Endit