Cyprus: Geostrategic facts
NEW EXPLORATION
OPPORTUNITIES
OFFSHORE CYPRUS
Republic of Cyprus
Republic of Cyprus
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third largest island in the Mediterranean Sea
lies at the crossroads of Europe, Africa and Asia
full member state of the European Union
open services-oriented market economy
isolated energy system
Solon Kassinis
Director
Energy Service – MCIT
www.mcit.gov.cy
Energy Service – MCIT
Why Offshore Cyprus
Offshore Cyprus – A Strategic Potential
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Republic of Cyprus
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Stable business environment within the EU
Attractive terms (zero taxation on revenues from offshore
hydrocarbon exploitation)
Known hydrocarbon system in the vicinity
Big hydrocarbon discoveries in the region
Several structures identified with Direct Hydrocarbon Indicators
Greater Mediterranean Region is a market with large potential for
oil and gas trading
Energy Service – MCIT
www.mcit.gov.cy
www.mcit.gov.cy
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A promising new area for Exploration.
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A 70 000 km² deep water frontier area with proven potential
in the vicinity.
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Very thick sedimentary basins covered by carbonate
platforms.
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An efficient regional seal: the Messinian evaporites.
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Multiple possible clastics and carbonate reservoirs.
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14 plays and leads of considerable size.
Republic of Cyprus
Energy Service – MCIT
www.mcit.gov.cy
Cyprus Exclusive Economic Zone
Republic of Cyprus
• Frontier exploration area of about 51,000 km2.
• Located South of the Island of Cyprus.
• Comprises of 13 Exploration Blocks
Energy Service – MCIT
www.mcit.gov.cy
Exploration Blocks
Republic of Cyprus
Block No.
Bathymetry
Range (m)
Surface (Km2)
1
397 – 2574
5740
2
248 – 2051
4741
3
782 – 2020
3510
4
2449 – 2866
2734
5
2201 – 2750
4555
6
2002 – 2619
4561
7
846 – 2613
4562
8
730 – 2588
4562
9
1887 – 2351
4279
10
1652 – 2475
2561
11
1194 – 2186
2958
12
1185 – 2026
4597
13
2010 - 2124
1439
www.mcit.gov.cy
Energy Service – MCIT
Main Prospects
Seismic Profiles
• Existence of active hydrocarbon systems.
Cyprus Arc seismic profile
PQ
Messinian
Republic of Cyprus
• Bright spots.
Miocene
Paleogene
Republic of Cyprus
5000
Mesozoic
• Seismic Direct Hydrocarbons Indicators.
– Bright and flat spots in structural closures.
PQ
Messinian
Mesozoic
Carbonate
Platform
BL1-BL2
Miocene
Mesozoic
• Gas chimneys
15000
– Highlight the migration pathway from deep reservoirs to
the surface creating gas pockets, mud volcanoes and
pock-marks on the sea floor.
Eratosthenes seismic profiles
10000
• Potential source-rocks and generative systems
Energy Service – MCIT
www.mcit.gov.cy
Energy Service – MCIT
www.mcit.gov.cy
Structural Map
Petroleum main plays
Republic of Cyprus
Republic of Cyprus
Energy Service – MCIT
www.mcit.gov.cy
www.mcit.gov.cy
Energy Service – MCIT
BATHYMETRIC MAP OF THE EASTERN
CYPRUS ARC
Regional Attractive Concepts
W
Republic of Cyprus
E
Republic of Cyprus
Flat spot
4000
Plio-Quaternary
Flat spot
Flat spots
5000
Messinian Evaporites
1 km
Energy Service – MCIT
www.mcit.gov.cy
Energy Service – MCIT
www.mcit.gov.cy
Cyprus HC Exploration Storyline
Legal Framework
• The Declaration of the EEZ Law (2004).
Republic of Cyprus
Republic of Cyprus
• The Contiguous Zone Law (2004).
• The Hydrocarbons (Prospecting, Exploration and
Exploitation) Law L.4(I) of 2007.
• The Hydrocarbons (Prospecting, Exploration and
Exploitation) Regulations of 2007.
www.mcit.gov.cy
Energy Service – MCIT
Energy Service – MCIT
International Bilateral Agreements
Data Available to Purchase
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• Agreements with other neighbouring countries
– Arab Republic of Egypt
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• Delimitation of the EEZ (2003)
• Framework Agreement concerning the development of
cross-median line Hydrocarbon resources (2006)
• Confidentiality Agreement (2006)
Republic of Cyprus
Republic of Cyprus
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– Lebanon
• Delimitation of the
EEZ (2007)
Energy Service – MCIT
www.mcit.gov.cy
www.mcit.gov.cy
MC2D-CYP2006 – 2D seismic survey data comprising
6,770 line-km
MC3D-CYP2007 – 3D seismic survey data in Block 3
covering 659 km2
3D Interpretation Report on Block 3 – €40,000
MC2D-CYP2008 – new 2D seismic survey data comprising
further 12,200 line-km
New integrated 2D Interpretation Report (MC2D-CYP2006 &
MC2D-CYP2008) – €55,000 (€35,000 for companies that
have purchased the old report)
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The interpretation reports can be purchased directly from
the Energy Service of the Ministry of Commerce, Industry
and Tourism (please contact us with such request).
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The seismic data can be purchased directly from Petroleum
Geo-Services (please contact us to get their contact details).
Energy Service – MCIT
www.mcit.gov.cy
Multi-Client Seismic Surveys
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Republic of Cyprus
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Seismic Surveys and Data
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Conducted by Petroleum
Geo-Services (PGS)
– Acquisition of 6,770 line-km, 2D seismic data in 2006
– Covering an area of 51,000 km2 within the EEZ
– 20 x 20 km 2D seismic grid
Survey provides highresolution deep imaging
(sub-salt) as well as ties to
key wells in the NEMED
Block (Egypt)
Republic of Cyprus
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MC3D-2007
– Acquisition of 659 Km2 of 3D seismic data in 2007
– Area located close to Lebanon offshore boundaries
– Identified several hydrocarbon indicators such as flat spots, bright
spots and amplitude anomalies
– Survey was part of a larger 3D survey undertaken by PGS, which also
covered an area within Lebanon’s EEZ
Review of the seismic data
and reports
– Electronic and hard copies
of the data
– PGS data rooms in Oslo,
London, Houston
– Data room at the Ministry of
Commerce, Industry and
Tourism in Nicosia
Energy Service – MCIT
MC2D-2006
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MC2D-2008
– Acquisition of 12,200 line-km of 2D seismic in 2008
– First biggest multi-client survey to use the new GeoStreamer®
technology by PGS
– Enhanced resolution and better penetration revealing deeper targets
– 10 x 10 km seismic grid on the western side of the area
– 5 x 5 km seismic grid on the eastern side of the area
www.mcit.gov.cy
Seismic Surveys Map
Interpretation Reports
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MC2D-CYP2006: 6,770 line km 2D
MC2D-CYP2008: 12,200 line km 2D
Republic of Cyprus
“New Exploration Opportunities Offshore Cyprus:
Exploration Plays and Leads (PGS, MC2D-CYP2006
and MC2D-CYP2008)”
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MC3D-CYP2007: 659 sq km
Republic of Cyprus
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www.mcit.gov.cy
New Integrated 2D Seismic Interpretation Report
3 volumes, 181 Figures, 19 Maps
Hydrocarbon prospectivity reassessed.
Identification of 14 different plays for exploration.
Regional geology, interpreted seismic sections, time and
depth structure maps of key horizons, thickness maps of
key intervals, plays and leads.
Must be purchased by companies who wish to participate in
the 2nd Licensing Round.
Prepared by the Ministry’s independent consultant BeicipFranlab.
3D Seismic Interpretation Report
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Energy Service – MCIT
www.mcit.gov.cy
Energy Service – MCIT
Energy Service – MCIT
3D Seismic Interpretation Study in Block 3
3 volumes, 151 figures, 19 Maps
Must be purchased by companies who wish to participate in
the 2nd Licensing Round and apply for Block 3.
Must be purchased by companies who purchase the
seismic data for Block 3.
Prepared by the Ministry’s independent consultant BeicipFranlab.
www.mcit.gov.cy
1st Licensing Round
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Republic of Cyprus
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Prospected 2nd Licensing Round
Opening: 15 February 2007
Closed: 16 August 2007
11 Blocks (46,000 km2) were on offer
Blocks 3 and 13 were excluded
Notices published in the Official Gazette of the
Republic of Cyprus and the Official Journal of the
European Union
Guidance Note document provided to assist
applicants in submitting their proposals
Republic of Cyprus
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Forthcoming (expected to be announced by the
end of 2010)
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12 Exploration Blocks (1-11 & 13) will be on offer
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Available data:
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MC2D seismic survey was conducted covering all
Blocks (6,770 line-km)
A total of 40,000 line-km of 2D seismic data were
purchased by interested parties
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Three applications were submitted
One Exploration License for Block 12 has been
granted
Energy Service – MCIT
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www.mcit.gov.cy
www.mcit.gov.cy
General Guidelines on Applications
• Invitation for submission of applications published
in the Official Journal of the European Union and
the Official Gazette of the Republic of Cyprus.
Republic of Cyprus
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Republic of Cyprus
• Invitation to be published at least 90 days prior to
the closing date for the submission.
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• Applications are submitted to the Minister of
Commerce, Industry and Tourism and handled by
the Energy Service.
• Evaluation of the applications is carried out by a
special Governmental Consultation Committee.
Energy Service – MCIT
Promotional seminars with full documentation,
including the bidding procedures, will be
organized upon the official opening of the 2nd
Licensing Round.
Energy Service – MCIT
General Procedures
MC2D-CYP2006 survey data comprising 6,770 linekm
MC3D-CYP2007 survey data in Block 3 covering
659 km2
3D Interpretation Report on Block
New MC2D-CYP2008 survey data comprising
further 12,200 line-km
New integrated 2D Interpretation Report (MC2DCYP2006 & MC2D-CYP2008)
www.mcit.gov.cy
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One application per Block (minimum amount of seismic data
has to be purchased).
Technical, financial and legal capacity documentation.
Description of the exploration programme.
Minimum exploration work (at least one exploration well) for
each exploration sub-period.
Minimum annual training budget during exploration and
exploitation.
Economic terms with respect to the cost oil/gas recovery
and to the profit oil/gas sharing.
Signature bonus.
Production bonus.
Short notice relating to the possible impact on and
protection of the environment.
Energy Service – MCIT
www.mcit.gov.cy
Main criteria for evaluation
Licensing
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• Technical and financial ability of the applicant
Republic of Cyprus
Hydrocarbon Prospecting License
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• Ways in which activities will be carried out
Republic of Cyprus
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Hydrocarbon Exploration License
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• Offered financial consideration
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• Efficiency and responsibility (previous license)
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• National security and public interest will also be
taken into consideration
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www.mcit.gov.cy
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Model PSC to be used in the licensing procedure and
concluded between the licensee and the Republic.
Main terms include:
Republic of Cyprus
Mr. Solon KASSINIS
Director of Energy Service
Ministry of Commerce, Industry and Tourism
1421 Nicosia
CYPRUS
Phone: +357-22409303
Fax:
+357-22304964
E-mail: [email protected]
Website: www.mcit.gov.cy
(Hydrocarbon Exploration
Zero taxation
The Director of the Energy Service, representing the
Minister, negotiates the terms and conditions of the PSC.
Energy Service – MCIT
www.mcit.gov.cy
Contact details
– Minimum exploration work program (2D/3D seismic surveys,
number of exploration wells, depth, etc.)
– Cost Oil/Gas recovery (up to a maximum %)
– Profit Oil/Gas sharing % (for oil according to production tiers
and prices; for gas according to production tiers)
– Signature and Production Bonus
– Minimum Annual Training budget
– Annual surface fees
– Performance guarantee
Republic of Cyprus
Granted for an initial period of up to 25 years; ability for one renewal of up to 10
years.
Energy Service – MCIT
Production Sharing Contract
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Granted initially for up to 3 years; ability for two renewals of 2 years each.
Includes gravity and magnetic surveys, 2D/3D seismic surveys, as well as one
exploration drilling.
On each renewal, at least 25% of the initial area is relinquished.
In case the appraisal program of an oil discovery is not completed until the end of
the second renewal period, an extension of 6 months could be granted.
In case the appraisal program of a natural gas discovery is not completed until
the end of the second renewal period, an extension of 24 months or more could
be granted for a viable gas market to be established.
In case of a discovery, the licensee has the right to be granted an exploitation
license.
Transfer of license or assignment of rights arising from a license may be granted
upon approval by the Council of Ministers.
Hydrocarbon Exploitation License
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Energy Service – MCIT
Granted for up to 1 year.
Gross evaluation of the Hydrocarbon potential of the island by identifying
geological structures.
Includes geophysical surveys but no drilling.
www.mcit.gov.cy
under Energy Service)
Energy Service – MCIT
www.mcit.gov.cy