Cyprus signs two-year exploration extension with ENI-KOGAS

Cyprus and Italian-South Korean ENI-KOGAS consortium have signed a two-year extension of the initial exploration phase for natural gas drilling in three Cypriot offshore blocks, the energy ministry said in a statement on Tuesday.

ENI's initial exploration phase in blocks two, three and nine of the country's exclusive economic zone expires on Jan. 23, 2016. The consortium had requested and received the approval of the Council of Ministers on the two-year extension.

The ministry's statement said that under the new concession, within the next two years, the consortium will conclude studies aimed at better evaluating and recalibrating the geological model of the region in order to identify prospects necessary to complete its drilling obligations.

ENI had failed to discover gas in two drillings in limestone layers but, shortly after its last drilling, announced the discovery of a mammoth natural gas field in Egyptian waters called Zohr, which contains an estimated 30 trillion cubic feet of gas.

The Zohr gas, which was found in carbonate layers, is close to Cypriot block nine where ENI reportedly spotted similar layers.

A statement said ENI-KOGAS consortium had tasked a large team with studying the geological model of the three blocks and preparing a preliminary drilling schedule expected to commence in 2017.

"This development is especially important, as it reaffirms and advances Cyprus's energy prospects during a period in which the international oil and gas industry is experiencing challenging conditions," the ministry statement said.

Texas-based Noble Energy is currently preparing a plan for exploiting a gas field it discovered in another Cypriot block, containing at least 4.5 trillion cubic feet of gas. Endit