The Onisiphoros gas field in Cyprus’ offshore Block 11 is not commercially viable, Energy Minister Giorgos Lakkotrypis said on Tuesday as it has been found to contain less than half a trillion cubic feet (tcf) of natural gas.
Announcing the raw results of the exploration well by the joint-venture Total and ENI in block 11, the minister added, however, that the results are encouraging in the sense that they confirm the existence of natural gas within a carbonate formation inside the EEZ, similar to the one discovered at Zohr.
“The importance of Onisiphoros lies in the fact that it proved that the geological model of Zohr does work,” he noted.
Lakkotrypis said carbonate formations in the bedrock within the three blocks awarded in the third licensing round – blocks 6, 8 and 10 – bear a resemblance to the structure in which the super-giant Zohr gas field was discovered by ENI in Egyptian economic waters.
Asked whether his assessment was that the “big target” might be discovered in the blocks awarded in the third licensing round, he offered: “In one of those blocks.”
The companies would not have competed for the concessions on those blocks unless they thought they held reserves that are commercially viable, he added.
Responding to another question, Lakkotrypis said the government is waiting to hear from Total whether they are interested in renewing their concession on block 11. The exploration license expires in February 2018.
Under the production-sharing contract, the concessionaires must inform the government within 30 days from now as to whether they intend to proceed with an appraisal, or follow-up, drill at Onisiphoros.
Asked in general what is the threshold that renders a reservoir marketable, Lakkotrypis said it depends on the manner in which a gas field is to be developed, but also on prevailing commodity prices.
He cited the Aphrodite field in block 12, which despite holding some 4.5 tcf, has not been developed due to currently suppressed oil prices which would not yield a high profit margin.
Source: Cyprus Mail