Cyprus-Egypt agree on joint Mediterannean oil-gas exploration project

Reporter (Greece), 04 May 2006 

Egypt and Greek Cyprus have agreed to joint exploration for oil and gas in the eastern Mediterranean, Egyptian President Hosni Mubarak said in an interview. Cypriot President Tassos Papadopoulos, due to start an official three-day visit to Egypt was also set to oversee the signing of an agreement between the two countries on drilling and production of natural gas within Cypriot territorial waters, Mubarak told daily Phileleftheros. Mubarak did not say when exploration would start.

Past estimates of reserves in the seas around the eastern Mediterranean island suggest 6 billion to 8 billion barrels of crude, according to former Greek Cypriot Energy Minister Nicos Rolandis. « Egypt has responded to the desire of Greek Cyprus to participate in the necessary mapping of Greek Cypriot territorial waters and enter an association to discover and produce oil and natural gas, » Mubarak said. « This will open new opportunities for a profitable cooperation between the two countries in this vital sector. »

Egypt and Greek Cyprus signed a memorandum of understanding last year which had included future exports of liquefied natural gas (LNG) to Greek Cyprus. They have also previously agreed on their economic exploitation zones, which is a delineation of their sea boundaries.

The island, some 300 kilometers north of Egypt, now relies almost exclusively on heavy fuel oil imports to fire its power stations.

Greek Cyprus has previously said it plans to introduce natural gas into its energy market by 2009 and hold an international tender later this year for the infrastructure. Egypt has offered technical support to convert power stations to gas-fired terminals from fuel oil, Mubarak said. LNG is gas cooled into liquid form for easy transport by tanker. On arrival, it is reheated into gas and pumped into the local pipeline network.