Cyprus Commences 3rd Offshore Licensing Round
Cyprus launched the third offshore licensing round offering Blocks 6, 8, and 10 in its Exclusive Economic Zone. The energy Minister of Cyprus noted that these blocks were selected because they are largely unexplored and the data available suggests they could contain carbonate structures similar to the recent Zhor gas discovery offshore Egypt. He also mentioned that geology was an important factor in the government’s decision to offer these blocks. Companies interested in participating have until July 22, 2016 to submit bids. Successful applicants are expected to be notified by November 20, 2016 and final awards are expected to be made by January 18, 2017.
Blocks awarded during the third licensing round have an initial exploration period of up to three years and can be renewed for up to two periods of two years each. The licensee is required to relinquish at least 25% of the original contract area upon expiration of the initial exploration period; at least 25% of the original contract area upon the expiry of the first renewal period and the remaining contract area upon the expiry of the second renewal period. In the event a commercial discovery is made during exploration, an exploitation license will be granted for a period of 25 years after approval of a development and production plan. The exploitation license can be renewed for a further period of 10 years.