Developments and Opportunities in Cyprus Offshore Exploration

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1 Developments and Opportunities in Cyprus Offshore Exploration Solon Kassinis Vice Executive President Cyprus National Hydrocarbons Company Ltd 4 th Annual Mediterranean Oil & Gas Conference Athens, 13 June 2013

2 Facts & Figures USGS Estimation Nile Delta Basin Oil: 1.76 bbl Natural Gas: 223 Tcf Levantine Basin Oil: 1.68 bbl Natural Gas: 122 Tcf

3 Facts & Figures Preliminary surveys show reserves of 30 tcf of NG statement by Lebanon s Energy Minister 60 tcf of NG in offshore Cyprus (based on geophysical data) Aphrodite NG discovery in Block 12 by NBL, 7 tcf More than 35 tcf of NG were discovered in offshore Israel

4 Facts & Figures Hydrocarbon Exploration Licenses Eni(80%) Kogas (20%) Eni(80%) Kogas (20%) Eni(80%) Kogas (20%) Total(100%) Total(100%) Noble(70%) Delek(15%) Avner(15%)

5 Exploration Licence - Block 12 September 2011 Renewal of Hydrocarbon Exploration Licence (2 years) 25% Relinquishment September 2011 Commencement of Drilling Operations for the First Exploration Well December 2011 Announcement of Natural Gas Discovery - 7 tcf June 2013 Appraisal Well It will determine whether the Discovery is a Commercial Field October 2008 Award of Hydrocarbon Exploration Licence to Noble Energy International Ltd

6 Exploration Activities Block 12 3D Seismic Survey (2013) 3D Seismic Survey (2009) Aphrodite Field 2D Seismic Survey (2011)

7 Exploration Activities Block 12 Well-A2 Well-A1 Water Depth (m) Total Depth (m) Well-A1 1,688 5,860 Well-A2 1,731 5,607

8 Block 12 Potential Development Plan Verification (exploratory) well drilling Reservoir appraisal and assessment Studies on the installation of offshore and onshore equipment Production drilling and well completion Subsea system installation Deep water host commissioning Export pipeline installation

9 Natural Gas Exploitation LNG End 2015 Final Investment Decision End 2018 Gas Supply to Cyprus for Domestic Consumption End 2019 First LNG Export 2015 Completion of NG Discovery Appraisal Program The political decision for the establishment of an onshore LNG plant has been taken It will be the largest investment in the island's history Project Partners: State / Upstream Producers / LNG Off-takers / Creditors It will have the capacity to handle additional gas volumes from neighboring countries Initial Phase: 5 MT/year (1 train) LNG export capacity

10 LNG Supply to the Markets The South East Mediterranean Region could be a new source for Natural Gas Supply to Europe The Asia Market is also an option

11 Consumption of Natural Gas in EU MTOE Source: Eurogas Gas production in the EU declines The share of natural gas in EU s primary energy consumption will remain high i.e. mainly for power generation purposes The exploitation of shale gas within the EU raises a number of concerns as regards possible environmental impacts and is considered very long-term

12 EU s Gas Supply Diversification: Southern Gas Corridor

13 Exploration Licences - Blocks 2, 3, 9, 10 & 11 Jan.-Feb Second Half of Award of Hydrocarbon Exploration Licences to Eni/Kogas & Total Geophysical Surveys & Geological Studies Drilling Operations for Exploration Wells 3D Seismic Surveys

14 Natural Gas Exploitation Electric Power Line Undersea Electric Power Line: Israel-Cyprus-Greece

15 Oil Indications in the South-eastern Mediterranean The main target for Block 10 by Total is oil The 2013 work program for Block 10 includes oil slick studies and oil slicks data acquisition So far 4 wells have been drilled in Leviathan gas field offshore Israel. Preliminary indications for potential oil findings in the South-eastern Mediterranean have been identifed

16 Cyprus' Energy Profile Will Change Radically More hydrocarbon discoveries are coming Gas Supply to Cyprus via Pipeline (2018) Establishment of LNG plant for gas transport to EU and the International Markets ( ) Other options for gas monetization: Electric cable Gas export pipeline Gas to Chemicals Industry e.g. methanol, ammonia, DME Attractive as they have lower capital expenditure requirements (compared to LNG) It would provide a strong diversification option for Cyprus so as not to be dependent only on LNG exports It would provide a long-term set of domestic employment opportunities at a scale larger than that afforded by an LNG industry alone Cyprus can develop the necessary infrastructure for providing services to drilling activities in the wider region of the Southeast Mediterranean

17 New Investments Bil. Euros

18 Thank you!