Roundup: Total likely to continue search for natural gas in Cyprus' offshore fields

French energy developer Total will most likely continue its search for hydrocarbons in Cyprus's offshore fields despite an initial decision to pull out, Cypriot Energy Minister Giorgos Lakkotrypis said on Tuesday.

Lakkotrypis said the decision came after the government consented to extending Total's search program by a year.

Total had been granted a concession to survey and drill for oil or gas in blocks 10 and 11, which lie about 85 km off the eastern Mediterranean island's southern shores.

But Total informed the Cypriot government that it was pulling out of the project as per its contract without carrying out any drilling because the company had not located any potential drilling targets.

The minister said a legal loophole was found which allowed the extension of Total's surveying program in block 11 until Feb. 16, 2016. After that it will be decided whether exploratory drilling is warranted.

"The draft agreement is now being formulated by the legal department and is expected to be finalized either this or next week," Lakkotrypis said.

He dismissed press reports that Total's initial decision to pull out of gas exploration had been made because of Turkey's challenge to Cyprus's right to drill in its exclusive economic zone, as outlined by the U.N. Convention on the Law of the Sea, calling them completely unfounded.

Lakkotrypis said Total had made its intentions known in September, 2014, long before Turkey raised its objections.

He added that Turkey's actions in sending warships and a seismic data ship to survey for natural gas would in no way affect Cypriot planning in developing natural gas, a development the country is partly counting on to help its economic recovery after receiving a 10-billion-euro bailout early in 2013.

Total's stay in Cyprus's exclusive economic zone will not have a significant effect on the island's short-term outlook, but is considered by analysts to be a medium-long-term booster.

It is also seen by Cyprus as a political asset in the face of Turkey's drive to end natural gas drilling until a solution to the problem is found.

Lakkotrypis said Cyprus was currently negotiating with Egypt and Jordan to sell them natural gas from a field discovered by U.S.-based Noble Energy.

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

Lakkotrypis added that results were expected at the end of March from a drilling currently under way by Italian-South Korean ENI-KOGAS consortium.

ENI-KOGAS is currently searching for natural gas in a field next to Noble Energy's concession, after a first unsuccessful drilling which ended in December.

Drilling in the eastern Mediterranean is costly and difficult because of the great depths involved. Endit