Third Greece, Egypt, Cyprus Trilateral Summit & the Eastern-Med Energy Industry

by Andreas Exarheas, Assistant European Editor

In December of last year, Alexis Tsipras, prime minister of the Hellenic Republic, Abdel-Fattah Al-Sisi, president of the Arab Republic of Egypt, and Nikos Anastasiades, president of the Republic of Cyprus, met in Athens for the third Greece-Egypt-Cyprus Trilateral Summit to “solidify” the foundations of their tripartite cooperation in the years to come, according to a statement from Greece’s Ministry of Foreign Affairs.

The latest meeting saw the genesis of the Joint Committee of Cooperation, which aims to formulate, develop and promote practical projects of trilateral interest. Following Eni S.p.A.’s recent supergiant gas discovery at the Zohr prospect in Egypt, energy will be a key area of focus for the partnership, which has spoken highly of the find’s potential. In a joint statement posted on the Hellenic Republic Ministry of Foreign Affairs website, the three leaders emphasized that the discovery of the Zohr gas field in Egypt’s Exclusive Economic Zone “can serve as a catalyst for peace and stability in the region”.

Eni’s Zohr gas discovery, which is the largest ever gas field found in the Mediterranean Sea, was encountered in the Shorouk Block, offshore Egypt. Well Zohr 1X NFW was drilled to a total depth of approximately 13,553 feet and hit 2,067 feet of hydrocarbon column in a carbonate sequence of Miocene age with “excellent reservoir characteristics”, as described by Eni. According to the well and seismic information available, the discovery could potentially hold 30 trillion cubic feet of lean gas in place, which translates to around 5.5 billion barrels of oil equivalent.

The Italian oil and gas company stated last summer that it would immediately appraise the field with the aim of accelerating a fast track development of the discovery. Eni’s CEO, Claudio Descalzi, even said at the beginning of October 2015 that Zohr would come on-stream as early as the end of 2017, although this claim has been met with some skepticism from certain factions of the energy industry.

In an effort to further develop the energy sector in the Eastern Mediterranean, the trilateral partnership has agreed to accelerate negotiations on the outstanding issues related to the delimitation of the three counties’ adjacent maritime zones. A clear ruling on the sea boundaries of these three countries will eliminate any uncertainty over exploration activities in the region and result in a more efficient and improved upstream energy sector in the Eastern Mediterranean.

The cooperation will also explore the potential for new pipelines in the region, depending on the level of gas reserves found in the area. Prior to the discovery of Zohr, one of the most talked about finds in the Eastern Mediterranean was the Aphrodite gas field located off the coast of Cyprus. The discovery, made in Block 12, is thought to contain a mean estimate gross resource of about 4.5 trillion cubic feet of gas.

Aphrodite has caused tension between Cyprus and Turkey due to the latter country’s claim of ownership. Turkey invaded Cyprus in 1974 and since then, the country has experienced a politically tense divide, with the northern part of the region being controlled by the Turks and the remaining zone operated by Greek Cypriots.

In a likely reference to Turkey, Anastasiades suggested that the cooperation was not trying to exclude other countries and claimed that natural resources should be a platform for cooperation, instead of hostility. Based on the diplomatic strain the Aphrodite field has already generated between the two countries, it seems very likely that Turkey will need much more than the olive branch extended by Anastasiades to finally work together with Cyprus on the promising Eastern Mediterranean find. The Cypriot leader’s desire to cooperate with Turkey is a good start though.

The continued cooperation between Greece, Egypt and Cyprus’ leaders on issues concerning the hydrocarbon sector within the area is good news for the region’s energy industry. The partners “remain convinced of the strategic nature of this trilateral cooperation” and plan to continue to work closely towards “the fullest exploitation of its potential”, according to the Greek MFA, which will only serve to enrich the petroleum business in the Eastern Mediterranean. With Egypt’s president stating that the partnership aims to have “visible and tangible results” through its joint cooperation, it will be very interesting to see what developments take place in the area before the three leaders meet up for the next scheduled trilateral summit in Cairo next year.

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