South discovers another prospective well is dry

South Cyprus has received the disappointing news that following a second drilling in the Amathusa prospect in bloc 9 of Cyprus’ EEZ, ENI-KOGAS has discovered that the well is dry.

ENI moved onto a second drilling in bloc 9 after the Onasagoras prospect yielded no usable amounts of hydrocarbons.

However, both President Anastasiades and the South’s Minister of Energy George Lakkotrypis have said that the search for offshore energy will continue.

Lakkotrypis said that ENI has submitted a request for the re-evaluation of its geological model within a two-year period.

The Italian-South Korean consortium has taken core samples from the bedrock, and by using data shared with Noble Energy, will gain a more accurate picture of the area, so that their next drilling target has more chances of success.

ENI’s Amathusa prospect, in bloc 9, lies just 10 km from the boundaries of adjoining bloc 12 – licensed to Noble Energy – and just 30km from the Aphrodite reservoir.

In January, Total France found no evidence for the existence of natural gas in blocs 10 and 11 of the Cyprus Exclusive Economic Zone.

Despite these set-backs, President Anastasiades has said that the existing energy plans for Cyprus will continue, claiming that “he was not disappointed” by the results.

Cyprus Mail reports that experts say the South should not be discouraged from continuing its explorations for hydrocarbons. ENI, nevertheless, needs some time to reconfigure its drilling strategy. The energy minister says that his government is considering ENI’s request to re-evaluate their geological model. ENI-KOGAS’ contract expires in 2016, but the government would not be drawn on the question as to whether or not ENI had asked for an extension.

Meanwhile, ENI’s drill ship, ‘Saipem 10000’ is due to undergo maintenance work, which will take between four and five months.

ENI are contractually obliged to drill at least four wells by the end of their concession. But with a second failure, they may suspend operations. Falling oil prices have caused the company to make cutbacks and having spent $300 million, they will want to move on, potentially to Egypt.

Energy expert Charles Ellinas believes that, given the rich yields found in the Nile Delta, ENI will be taking its drill ship to Egypt and remain there until the year’s end, at least.

“My guess is that ENI will be asking for a one-to-two year extension on their contract with Cyprus, and the government ought to grant them the breathing space,” he said.

“It won’t be until 2017 that oil prices bounce back to a certain extent – but still under $100 a barrel – so until then, companies will avoid high-risk exploration ventures. Authorities here need to take that into consideration and give ENI some leeway.”

So far, Cyprus’ proven gas reserves amount to 4.5 trillion cubic feet, in the Aphrodite field.

Famagusta Gazette and Cyprus Mail

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