Hopes are high for Cyprus' NOC despite financial crisis
CNHC, the world’s youngest NOC, wants to turn Cyprus into a world-class natural gas hub
In the grip of a financial crisis that will probably wipe off more than 5% of its GDP in 2013, Cyprus needs a boost. Riches buried under the Mediterranean Sea offshore the island’s south coast might just be the answer.
Cyprus, believes Charles Ellinas, chief executive of Cyprus National Hydrocarbons Company (CNHC), is sitting on natural gas reserves amounting to 40 trillion cubic feet (cf). It’s enough to support exports of 40 million tonnes a year of liquefied natural gas (LNG) – and rescue the island’s economy. “It’s a huge gift,” he says. “If we make Cyprus the LNG hub for the region the employment it would create would be beyond belief.” By 2025, he thinks, Cyprus’s economy, which until the crisis struck this year was heavily dependent on its financial services industry, would be “totally turned around”. There’s work to be done first, though. CNHC itself has only been operating since the beginning of the year, making it the world’s youngest national oil company. For now, it has to wait on the foreign companies drilling offshore Cyprus before the optimism becomes reality. Noble Energy, which is completing appraisal drilling of block 12, in the Aphrodite field in Cyprus’s Exclusive Economic Zone, is expected to confirm reserves of about 7 trillion cf as early as this month. Half of the zone’s 12 blocks have been licensed. Eni, Kogas and Total are gearing up to drill, too. Eni’s Block 9 may be even bigger than block 12, believe some analysts. In Israeli waters east of Aphrodite, some 35 trillion cf has been found and Ellinas is confident that the Cypriot acreage will be at least as prolific.
Unlike Israel, however, Cyprus has made no bones about its ambition to use these reserves to build a lucrative export market – including, if Nicosia has its way, extra Israeli gas piped ashore to the island. (Israel has decided to export up to 40% of its gas, but how it does this has not yet been decided.)
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