Noble Energy Says 1.5 Billion Barrels of Oil May Be Found off Cyprus Southern Coast

December 18, 2013

Time will tell, but debt-ridden Cyprus may have hit the jackpot after Noble Energy announced on December 17 that some 1.5 billion barrels of oil could lie in deepwater strata off the island’s southern coast, Cyprus Mail reported on December 18.

In a statement, the Texas-based energy company said “There is evidence of multiple opportunities in the Eastern Mediterranean with approximately 3 billion barrels of gross unrisked oil potential in the deep Mesozoic play in both Cyprus (1,496 MMBoe) and Israel (1,538 MMBoe). We are evaluating 3D seismic data on an ongoing basis and plan to resume exploration drilling in the Eastern Mediterranean in late 2014 or early 2015.”

The statement followed a conference hosted by Noble in Houston with analysts and investors on the company’s operational outlook.

“Significant exploration potential remains on the company’s acreage position in the Eastern Mediterranean, with approximately 3 billion barrels of gross unrisked oil potential in the deep Mesozoic play in both Cyprus and Israel and four trillion cubic feet gross of natural gas potential in Cyprus,” the company said during the conference.

‘Unrisked’ is industry jargon for a rough estimate of reserves that does not reflect the probability of geologic success. And experts caution that it’s still too early to tell whether Cyprus has struck gold.

The Mail learns that it was last week that senior Noble execs first tipped off the government on the potential for an oil bonanza in Cypriot waters.

The information was relayed to the President during a meeting in Nicosia with Keith Elliott, Noble Energy Senior Vice Chairman for the Eastern Mediterranean.

Coming out of that meeting, company execs were guarded, with Elliott telling newsmen only that they planned to prospect for oil as well as for natural gas.

“We are looking for oil and gas but primarily we’re looking for gas,” Elliott said at the time, adding: “We really don’t know at the moment which is coming to the forefront.”

Though low-key, Elliott’s remarks sparked speculation here that Noble was onto something – beyond natural gas – in its Block 12 concession.

Daily Phileleftheros broke the story on December 16 morning, before Noble’s announcement. The daily reported that the reserves would translate, on Cyprus’ end, into revenues of approximately €60bn, based on the profit-sharing agreement between the government and Noble.

There was no immediate reaction from the government, but political parties jumped on the oil bandwagon urging the administration to speed up exploration and development.

Earlier in the day, when asked to comment on the Phileleftheros report, energy minister Giorgos Lakkotrypis advised a wait-and-see approach, pointing out that more reliable data on the presence of oil would be available by April of next year, when Noble is expected to release their final assessment of three-dimensional seismic surveys in their Block 12 concession.

This summer, in addition to conducting appraisal drilling at the Aphrodite prospect in Block 12, Noble carried out 3D seismic surveys of the entire Block 12 to reveal the potential of additional gas – and