Gas Discovered Off Cyprus

December 29th, 2011

Noble Energy Inc. said a field off the coast of Cyprus may hold as much as 8 trillion cubic feet of natural gas, the first discovery off the divided island nation.

Results from the Cyprus A-1 well indicate from 5 to 8 trillion cubic feet of gas, with a gross mean of 7 trillion cubic feet, Houston-based Noble Energy said today in a statement. The field covers about 40 square miles (100 square kilometers) and requires additional appraisal drilling before development, the company said.

“The gas discovery in the exclusive economic zone of our country creates great prospects for Cyprus and its people, which we shall seriously, prudently and collectively exploit to serve public interest,” Cypriot President Demetris Christofias said at a press conference in Nicosia today. “Cyprus is coming into Europe’s energy map with prospects of substantially contributing to the EU’s energy security.”

The beginning of drilling by Noble prompted Turkey in September to send a seismic vessel accompanied by warships and fighter jets to the area. Cyprus is divided after Turkey invaded the northern third of the island in 1974. Turkey doesn’t recognize the Greek Cypriot government.

United Nations Secretary General Ban Ki-Moon summoned Christofias and Dervish Eroglu, the leader of the Turkish Cypriot community, to New York last month for talks to reunify the island.

‘More Complicated’ Politics

The discovery has heightened tensions between Cyprus and Turkey, said John Malone, an analyst at Global Hunter Securities LLC in New York.

“The politics are going to get more and more complicated as you get closer to development,” said Malone, whose firm doesn’t rate Noble Energy.

Cyprus’s government announced on Nov. 23 a second oil and gas licensing round that will cover 12 of 13 blocks in its offshore territory.

Noble Energy estimated the size of the Cyprus A prospect on Nov. 15 to be in the range of 3 to 9 trillion cubic feet with a 60 percent probability of success.

The Cyprus A-1 well, which holds deposits 310 feet (95 meters) thick and is part of the Cyprus Block 12 field, was drilled to a depth of 19,225 feet in about 5,540 feet of water, Noble Energy said today.

Levant Basin

The company operates the well with a 70 percent working interest. Delek Drilling LP and Avner Oil Exploration LP each hold a 15 percent stake.

The U.S. Geological survey estimates that the Levant Basin, a triangular slice of the Mediterranean lying between Cyprus and Israel, may hold 122 trillion cubic feet of gas. Noble Energy discovered the Tamar field in 2009 and the Leviathan field in 2010, both off the coast of Israel.

Leviathan may hold as much as 20 trillion cubic feet of gas, Noble said in a Dec. 19 statement. Tamar is estimated at about 9 trillion cubic feet, Chief Operating Officer David Stover told investors at a Dec. 7 conference.