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NOBLE Energy will be back in Block 12 for more drilling sometime in the third quarter of this year, its Vice-President said yesterday.

John Tomich was speaking at a symposium in Nicosia organised by the Institute of Energy of South East Europe and the FMW media group.

The symposium, “The Energy Resources of Cyprus and the new ground in Eastern Mediterranean,” brought together politicians, representatives of oil multinationals, energy experts and academics.

“We are currently actively looking for a rig to drill a second well there,” Tomich said, adding that appraisal work takes time, “maybe a year.”

In the coming months, he said, Noble would be “digesting” the data obtained during the first drilling phase, at the conclusion of which the Houston-based company had announced a find of between 5 and 8 trillion cubic feet (tcf) of natural gas at a depth of 5,860 meters.

“We’ve only drilled a pinhole so far,” Tomich said. 

Noble’s next step would be to use this data to carry out engineering studies for the necessary facilities (for example the wellheads) as well as for a pipeline running from the field to the island’s southern shores.

Depending on the outcome of follow-up drilling, the quantities of gas within Block 12 would be appraised upward or downward, he noted.

He cited the example of Israel’s Leviathan field, which was recently re-appraised to 20 tcf from the initial assessment of 16 tcf.

Asked whether the recent excitement in Cyprus over the gas find is justified, Tomich said:

“Absolutely. It’s a fantastic discovery, a significant asset. The cautionary point is how you now get from A to Z,” he noted, alluding to post-find planning, strategising, and monetising the find.

According to Tomich, in a production-sharing contract – as in this case – the operator typically leads the way in building the pipeline.

Tomich reiterated Noble’s proposal for building an LNG plant on the island to export the gas, saying this was a flexible solution for Cyprus: “You need more money up front, but there’s a larger return on investment.”

He revealed also that, according to Noble’s calculations, construction of the LNG plant would require a workforce of some 4,000 people.  The accommodation of these people alone would generate cash for the island, other than the jobs created by spinoff businesses once Cyprus becomes a natural gas producer.

Asked what he thought of the idea of a pipeline running from the Cypriot finds to Greece and then onto European markets, Tomich said Noble was open to all options.

He was quick to add, however, that such a project would be immensely costly but also pose daunting logistical difficulties due to the geology between Cyprus and Greece because of the presence of trenches and faults in the seabed.

“We will be conducting an ongoing dialogue with the Cyprus government,” Tomich said, without going into details.

Harry Sachinis, chairman and CEO of Greece’s DEPA (Public Gas Corporation) said that the coming decade will see a growing supply gap for natural gas in European countries, and proposed that Cypriot gas be piped to Greece and then onto Bulgaria and south-eastern Europe.

Greece plans to build an interconnector by 2014 that will link the country’s grid with the Bulgarian network, channelling gas from the Caspian to the European continent. Also in the works is a pipeline linking Greece and Italy.

Sachinis said that scenario would still leave some 8 billion cubic meters in spare capacity, and he suggested this capacity could be filled by Cypriot gas.

He further argued that, according to calculations made by DEPA, the tariff of piping gas to Greece would be half of the cost of a floating LNG facility built at the site of the Cypriot well.

Solon Kassinis, director of the Energy Service, said the translation of the documents for the call for interest for the second licensing round was expected to be completed “in the next two weeks.”

Subsequently the call for interest would be published in the EU journal, and interested companies would be given at least 90 days to place bids for the remaining blocks within Cyprus’ Exclusive Economic Zone.

In Kassinis’ opinion, the best way forward for Cyprus was to build a “bi-governmental pipeline”, a methanol plant and an LNG plant in collaboration with Israel.

Ioannis Mazis, professor of geopolitics at the University of Athens, offered an overview of political developments in the Middle East and their impact on the energy industry.

He concluded by saying that Israel at this juncture is a key strategic ally for both Cyprus and Greece.

“Our governments should rise to the occasion and take advantage of this,” said Mazis.

“When we say that the Israelis are our friends, that doesn’t necessarily mean that there is love in the air…cue romantic music,” Mazis said, drawing chuckles from the audience.

He also urged a more pragmatic approach to politics, noting that the oft-cited traditional friendship with the Arab world is, in many respects, a myth.

“First of all, there is no such thing as one Arab world, it is a nebulous concept. And you should know that a number of countries who are members of the Organization of the Islamic Conference have recognised the breakaway regime in the north,” said Mazis.