The Race Just Got Hotter For This Prized Natgas Exploration Block

The Race Just Got Hotter For This Prized Natgas Exploration Block by Dave Forest, Pierce Points

Critical development this week in one of the world’s most important emerging natural gas plays. Where the entrance of a major E&P may signal a massive prize waiting to be discovered by drilling.

That’s in the Mediterranean island nation of Cyprus. Where people who know the region best appear to have thrown their hat into the race for an upcoming petroleum bid round.

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As I discussed in late May, Cyprus has launched a bid round for three offshore exploration blocks. A program that by itself seems fairly unremarkable.

But the big feature here is the neighbors. With the Zohr natgas mega-discovery in Egypt — thought to hold up to 30 trillion cubic feet of reserves — located within a few kilometers of the blocks on offer.

That proximity raised the possibility that some big names might jump into the Cyprus bid round. And news this week confirmed that the potential is indeed of major scale — with the operators of the Zohr discovery themselves apparently seeking to get into the Cyprus blocks.

That firm is Italian oil major Eni. Which local reports Sunday suggested has been in meetings with Cyprus officials, expressing interest in the upcoming bid round.

If true, that’s a major endorsement of the potential on these licenses. After all, Eni knows Zohr better than anyone — and if they like the ground next-door in Cyprus, it suggests they’re seeing similar potential on this side of the fence.

And they aren’t alone in pursuing the prize here. With local papers also noting that French major Total has been in meetings with the government on a potential bid.

Officials also said that six other “big companies” have expressed interest in the bid, although they declined to name those firms. All of which suggests this could be a heated round — watch for an expected announcement of the participants today, and the final news on the winner(s) afterward.

Here’s to following the insiders,

Dave Forest