NOBLE Energy is considering the option of building a terminal in Cyprus to provide natural gas for the domestic market and for exports, Vice President Noble Energy Terry Gerhart has said, noting that the estimation for 5 to 8 trillion cubic feet natural gas in Cyprus’ block 12 is a very large accumulation of gas.
Speaking earlier today following a meeting with President Christofias, Gerhart said that they had a very good meeting with the President. “We updated him on our progress with the well”, he said and added: “As everyone is aware we drilled a successful well and made an announcement at the end of the year. Somewhere between 5 and 8 trillion cubic feet of gas were found and we look forward to progressing it and bringing it to reality for the Cypriot market”.
He also said that “it is going to take quite a bit of time to analyze all of the data that we have. We are in the process of doing that now. We have brought with us our experts from Houston who updated the Presidential advisors and the Ministers on the progress we have made today”.
Asked if there is going to be a pipeline to the island and if Noble Energy is in favour of building a terminal here on Cyprus, Gerhart said that this one of the options. “We are looking at that, a pipeline from the offshore facility and then to provide gas for the domestic market as well as a potential for an export project an LNG export project”, he stated.
Replying to a question on the next steps of Noble during the next couple of months, Gerhart said that there is a number of data “that we will be analyzing with our experts and factoring that end of the next part of the process which will be an appraisal well that will need to be drilled but obviously, there is a roughly 100 square km of an area that we will going to be analysed and we have got one well that we drilled so far to help project what we have seen. So, there is a need for more appraisal wells in the future”.
Asked if Noble Energy will be interested in participating in the next licensing round, Gerhart said that this is something that Noble is considering. “At this point we are analyzing the data which is out there. We haven’t made a commitment yet but we are looking at the date and if we see something that looks encouraging we would certainly look forward to participating”, he pointed out.
Finally, asked if he believes that the final estimate will be greater than the one Noble has announced, the company’s Vice President said that 5 to 8 trillion cubic feet is our best estimate at this point based on the information we have today. “It is a world class, very large, a large accumulation of gas”.
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.
@ Nigel Thanks for your reply. I wonder when the next round will commence. I hope not after the further drilling Noble says will start in the latter part of 2012.
@ James Thanks for your very detailed reply. I guess you are in the oil/gas business or at least are very knowlegable about it.
What I cannot understand is how the find could be downgraded form searching in another area of block 12. Surely it could only be upgraded. Also there is no mention of oil anywhere. Wikipedia suggests that oil is often found during gas drilling. Any ideas about this anyone.
@ George
Oil companies normally do not own Drilling Rigs. They charter from such as Transocean etc. I suggest you look at w**.Rigzone.com Rig section. With the Well being in deep waters they be looking for a Semi-submersible with a 15K BOP.
The operator will then put a small team on board (called the Company Man who coordinates the Drilling with the Rig Super/Toopusher).
Now the operator will supply such as the Casing, Running tools etc. Service companies all involved with the Well.
I would suggest people slow down on thoughts of Pipelines & terminals just now I suspect Noble will need at least 2-3 more appraisal wells to find the answers whether it is commercial to develop and by what way.
@George – Noble has said that further appraisal wells are needed.
And it may join the next round of gas exploration licensing.
@Alex – the tankers bringing heavy fuel oil dock by the power stations. The power station I toured at Moni had a docking station out at sea where tankers hooked up and pumped the oil ashore.
But I suspect they could also bring it ashore directly from the well by pipeline.
Bet the price of gas won’t come down, just more profit for those at the top.
Very interesting but does anyone know anything about Nobles latest announcement that stated they would be setting up another rig to drill another well in another area of block 12? Seemingly Nobles John Tomich said something like the first discovery was just a pinhole and they would be drilling again in the 3rd quarter of the year. The Cyprus mail article (sorry i forgot up to now where I read it) also suggested that the quantity of natural gas could be upgraded or downgraded after the 2nd drilling. All very confusing for those of us not in the oil biz.
Something else to go bang then!
My understanding is that only Limassol is suitable, since it is the only deep water port on the island where tankers can moor.
Therefore technically it would be easier to add here one more port terminal to service gas terminal, rather than build a completely new port for gas tankers.
However, I cannot share unrestrained Cypriot “gas enthusiasm”. Resources rich countries are rarely among highly developed ones. It is a mixed blessing in most cases. Since Cyprus has neither technology nor experience of exploration, it may easily become a puppet of foreign interests.
The fact that Israeli PM will come in person to sign related agreement makes me think Cypriots have already given away too much. It also seems probable that the 4.5 Billion loan from Russia will be repaid in kind rather than in cash (by gas concessions that is). Therefore it may well happen that by the time first dividends from gas become real they will only partially belong to Cypriots.
Local power stations, by the way, are still not prepared to work on gas and it will take years to adapt them.
Therefore in the nearest 5 years I can only foresee considerable capital expenditure.
Cypriots, of course, easily solve the problem my saying “Foreigners will bear all the costs while we will only get profits”.
Any ideas where on the south coast it might be located anyone?
Thanks Nigel for consolidating this comprehensive up-date. The overall picture re ‘Cyprus Gas’ looks quietly encouraging – with riders like ‘long way to go’ and ‘ lots of possibilities options’ – and of course plenty of potential pitfalls.
I find it encouraging from reportage elsewhere that ‘natural gas’ is projected to overtake oil to become the No.1 energy source on the planet within the next 10/15 years, certainly looks likely with the flight from nuclear power generation following last year’s awful events in Japan.
So a real possibility that Cyprus can not only develop gas as an alternative fuel but potentially sell on its excesses via conversion plant and pipeline to mainland Europe, no wonder the Russians are interested!
But could the Republic handle/manage all this? Highly unlikely unless it defines a realistic detailed long-term strategy and works with proven partners who can advise and support such potentially large and complex processes and installations. And ensure these opportunities – and the potential profits therefrom – are not squandered…….
Cypriots seem to take the view that whenever the island encounters problems (as now, economic and social) – ‘ something beneficial always comes up’. But unless it’s government plans and handles things well – record not good! – then there will remain real concerns (worries?) that the next ‘Golden Geese’ may lead to other, new, problems into the future.