The news left officials at the Energy Ministry officials stunned particularly since the mammoth French firm was willing to take a loss of €70million – hydrocarbon exploration licence fees – rather than continue its pursuit for hydrocarbons off Cyprus.
Total had paid for the license to for blocks 10 and 11 of Cyprus’ EEZ after signing two production sharing contracts with the Ministry of Commerce, Industry and Tourism in 2013. The firm was later handed the green light by the Agriculture Ministry to begin seismic exploration for oil and gas in block 10 and in parts of blocks 6, 7 and 11.
The French company has decided to pull out of the deal rather than risk losing a further €250m in seismic surveys.
Government sources say the decision by the French to back-out is not connected to the recent search violations in Cyprus’ EEZ by Turkey.
This is the second major blow to hit the Energy Ministry following last month’s search at the exploratory well in the ‘Onasagoras’ reservoir, in block 9.
The Italian-South Korean consortium ENI/KOGAS, which undertook the exploration at ‘Onasagoras’ – has since moved onto the next drilling at “Amathousa” reservoir which is also located in EEZ block 9.
ENI is the Operator of blocks 2, 3 and 9 of the Cyprus EEZ with 80% participating interest while KOGAS is partner in these blocks with a 20% participating interest.
Total is widely regarded as one of the five ‘Supermajor’ oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and international crude oil and product trading.
Total is also a large-scale chemicals manufacturer.