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Natural gas find offshore Cyprus worth tens of billions

On Wednesday, Nobel Energy announced that it had found natural gas reserves offshore the Republic of Cyprus and that results from drilling and initial evaluation work indicate the reserves amount to between 5 and 8 trillion cubic feet.

NOBLE Energy announced a natural gas discovery at the Cyprus Block 12 prospect, offshore the Republic of Cyprus in a press release issued on Wednesday.

The Cyprus A-1 well encountered approximately 310 feet of net natural gas pay in multiple high-quality Miocene sand intervals.

The discovery well was drilled to a depth of 19,225 feet in water depth of about 5,540 feet. Results from drilling, formation logs and initial evaluation work indicate an estimated gross resource range(1) of 5 to 8 trillion cubic feet (Tcf), with a gross mean of 7 Tcf.

The Cyprus Block 12 field covers approximately 40 square miles and will require additional appraisal drilling prior to development.

“We are excited to announce the discovery of significant natural gas resources in Cyprus on Block 12,” Charles D. Davidson, Noble Energy’s Chairman and CEO, said. “This is the fifth consecutive natural gas field discovery for Noble Energy and our partners in the greater Levant basin, with total gross mean resources for the five discoveries currently estimated to be over 33 Tcf. This latest discovery in Cyprus further highlights the quality and significance of this world-class basin.”

Davidson went on to say, “We would like to thank the Government of Cyprus for their productive cooperation and support in achieving an important outcome for the people of Cyprus and Noble Energy. We look forward to working closely with the Government of Cyprus to develop this discovery in a manner that maximizes value for all stakeholders.”

Noble Energy operates the well with a 70 percent working interest. Delek Drilling and Avner Oil Exploration will each have 15 percent, subject to final approval by the Government of Cyprus.

The Commerce Minister, Praxoulla Antoniadou, said that the gas find is worth tens of billions and that it will satisfy the Island electricity production needs for 210 years and President Demetris Christofias called the find “historic”.

The minister went on to say that “Cyprus is in a position to strengthen the energy security of the EU as we are the only country in the region that belongs to the EU, and at a time when the EU seeks new sources of natural gas”.

 (1) Range of resource estimate based on 75th and 25th percentile probabilities.

About Nobel Energy

Noble Energy is a leading independent energy company engaged in worldwide oil and gas exploration and production.  The Company has core operations onshore in the U.S., primarily in the DJ Basin and Marcellus Shale, in the deepwater Gulf of Mexico, offshore Eastern Mediterranean, and offshore West Africa.  Noble Energy is listed on the New York Stock Exchange and is traded under the ticker symbol NBL.  Further information is available at Noble Energy Inc.

Readers' comments

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  • John Swift says:

    If the Cypriot man in the street benefits as much as we did from the North Sea gas and oil it won’t alter his life much.

    When North Sea Gas ans Oil were in full flow the UKs economy was in a right state.

    Where did the promised golden age of prosperity go?

    P.S. I’m not holding my breath about the supposed wealth around the Falklands either.

  • Steve says:

    Mike, you are the man. Straight to the politics of the find and how the politicians are bound to mess it up. Assuming the find is verified and the gas can be brought ashore, here are some predictions that can be made.

    The politicians will look at the find in terms of how they can secure their political futures – to reign till Jesus comes again.

    Lots of economic refugees will be revising their plans in terms of final destination in the EU.

    The rules for getting into Cyprus without EU citizenship will be tightened up considerably. Those who have property (with or without title deeds) may find they have already passed through the eye of a needle. How will Cyprus shut off the influx of Russians, whom they probably won’t need any more?

    The Turks will be very, very cross. They will be looking for a share for themselves and for the “TRNC”. How about a one third share for each of them and one third for the Republic of Cyprus?

    President Christofias will be looking at the gas find as a means to exert pressure on the talks with Turkey; in other words a stick to beat the Turkey over the head with and to have a bigger say in attitude of the EU towards Turkey.

    The trade unions and the Cyprus civil service will be come up with their selfish agendas to steer money into their salaries and pensions.

    Many of the oil and gas industry players will regard Cyprus as naive and a pushover like the Brits were with North Sea Gas. They and their lawyers may well have a surprise coming.

    Most of the benefits will be wasted.

    As the Chinese might say, we live in interesting times

  • Alan Waring says:

    Mike has put it very well. If a country with the resources, relative discipline and know-how of the UK could squander and let slip so much of their OS oil & gas money, there is really very little chance of Cyprus getting it right.

    Having spent several years as a consultant to a number of companies (British, US and others) in the OS oil & gas ops in the North Sea, Irish Sea and elsewhere, to me it looks like the various Cyprus authorities involved are out of their depth. They do not know just how little they know about this whole topic and I doubt that they will ever acknowledge the need for or agree to the injection of the vast amount of external expertise they will need. On top of that, the attractions of loosely controlled transactions, vast amounts of money and the potential for corruption will ensure that the Cypriot population overall will be unlikely to benefit much.

  • Martyn says:

    Yes, the Big worries are:

    that Gas fever prevails over all else, sidelining current- and past! – issues

    that despite Advice, Warnings, Strategic Conferences etc the Cyprus government will badly manage the contractual and processing/taxation issues.

    Cyprus will earn substantially less than first, 2nd or 3rd estimates.

    And revenues will take longer- than-forecast to accrue.

    Little of the wealth will accrue to Cyprus residents.

    big-wig Cypriots will start, along with others, wearing Dishdashas & Shumaggs & Ogals.

    – and run round in Big American gas-guzzling cars

    Never Mind!


  • Mike says:

    Harold Wilson, the then Prime Minister in UK, when commenting on Britain’s oil & gas finds in the North Sea said that everyone in UK will be a millionaire by the end of the decade. The reality is that Britain squandered her hydrocarbon resources by using the revenue to prop up and fund the tax and benefit pot creating the illusion of wealth.

    Many operators and sub contracting companies, mainly American, became very rich in the process and BP contributed to the Exchequer’s purse, very few others did preferring to use creative accounting and operating methods to avoid as much liability as possible.

    Instructions only to buy supplies and services from Santa Barbara, Houston etc. were commonplace and prices charged were 20, 30 times greater than could be secured in Aberdeen or Great Yarmouth for identical product. In addition there was the ‘management fees’ which ran into tens if not hundreds of millions emanating from American head offices.

    Norway fared far better in its use of revenue’s and in fact ran its industry far better and more efficiently than the UK.

    Time will tell if Cyprus chooses to use any revenues it may have at its disposal to build the Country and its infrastructure, both capital and financial, or if it sees the revenue as a means of filling the gap left by failing tourism and construction.

    I fear that our current levels of expertise and decision makers are not of a calibre or commercial background to ensure the best use of any revenue and be astute enough to foresee or pre-empt the contractual pitfall’s to come. In itself no problem if limitations are realised as this expertise can be bought however unjustified arrogance may just convince those with decision making powers that they know best. Only time will tell and I for one hope that the correct decisions are made for the good of the Country as a whole and for all of it’s people.

  • UBoat says:

    More smoke and Mirrors ?

    Good for them if it is brought out of the ground. This will take a while though as the Cypriot government are probably right now working it out to Maximize their cut before it goes any further. You can just see the Euro signs rolling in their eyes. “Hmm how do I get this into my offshore A/C?”

    May be some of those nice Cypriot Solicitors can help them?

    So now we the other long term investors in the Islands future, are pushed even further from the minds of the ones who should be sorting the property scandal out! Yep they wont have time to deal with our insignificant issues now! they have real money to make disappear with that Smoke and Mirrors trick.

    40,000 non Cypriots are still waiting and the bigger the Que gets Mr Government the more people will talk, and the less real people will invest in the Islands future.


  • @Gavin Jones – Good question!

    The press release issued by Noble Energy came with the following caveats:

    This news release includes projections and other “forward-looking statements” within the meaning of the federal securities laws. Words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may,” and similar expressions may be used to identify forward-looking statements. Such projections and statements reflect Noble Energy’s current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions involving a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, the volatility in commodity prices for crude oil and natural gas, the presence or recoverability of estimated reserves, drilling and operating risks, exploration and development risks, government regulation or other action, the ability of management to execute its plans to meet its goals, competition, the ability to replace reserves, environmental risks and other risks inherent in Noble Energy’s business that are detailed in its Securities and Exchange Commission filings.

    Cautionary Note to Investors — The Securities and Exchange Commission prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than “reserves,” as that term is defined by the SEC. We use certain terms in this news release, such as “estimated resource range” and “gross mean resources,” which describes quantities of oil and gas that may not meet the SEC’s definitions of proved, probable and possible reserves, and which the SEC’s guidelines strictly prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by us. Investors are urged to consider closely the disclosures and risk factors in our Forms 10-K and 10-Q, File No. 1-07964, available from Noble Energy’s offices or website, These forms can also be obtained from the SEC by calling 1-800-SEC-0330.

    Also, I infer from the statement “The Cyprus Block 12 field covers approximately 40 square miles and will require additional appraisal drilling prior to development” that more work is needed to determine whether the gas can be extracted economically.

  • Gavin Jones says:

    To whom is this gas find “worth tens of billions”?

    I suspect that we need someone qualified in the oil business to spell out exactly what all this means and when all this ‘bounty’ is likely to materialize. All we seem to hear at the moment is the usual spin and speculation, primarily from government sources, that one knows is ill-informed and spewed out on the hoof.

    Any takers?

  • Andrew says:

    Natural gas find offshore Cyprus worth tens of billions!

    American interested in massive tourist investment!

    Forty thousand non-Cypriots caught in Title Deed trap!

    I know, I know. This is call my bluff. Only one of the above headlines is true.

    And the correct headline is: Forty thousand non-Cypriots caught in Title Deed trap

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