South to negotiate drilling licences in disputed territory

There are unconfirmed reports that the ENI-KOGAS consortium will be entering into negotiations with South Cyprus government for licences for blocs 5 and 6 in the South Cyprus’ EEZ.

The Italian – South Korean consortium already holds drilling licences for the exploration of three other blocs in the South’s EEZ.

The South Cyprus government has so far, released no statement. However, it extended its six month deadline for blocs 5 and 6 only, that was issued in May.

Over the past six year, the South has issued exploration licenses for blocs 12 (Noble Energy), 10 and 11 (Total) and 2, 3 and 9 (ENI-KOGAS).

ENI-KOGAS was one of a number of companies and consortia that bid for bloc 6 during the second round. It also put in a sole bid for bloc 5. It’s bid for bloc 10 was lost to French energy giant Total.

Offshore blocs 5 and 6 which lie south-west of Cyprus fall within the areas that Turkey claims are part of its own continental shelf.

Earlier this year, in an attempt to defuse tensions in the eastern Mediterranean, US ambassador in Nicosia John Koenig requested South Cyprus not to issue exploration rights for blocs 5 and 6. Turkey has also expressed an interest in exploring blocs 4, 5, 6, and 7.

This week Turkey’s official news agency Anadolu reported that the country’s state-run petroleum company TPAO plans to establish four offshore drilling sites next year, one being deep-water drilling, in a bid to expand domestic oil and gas supply. However, the report did not specify the locations of the sites.

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