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05.03.2012 14:07

Chinese Energy Company Interested in Cyprus' Offshore Natural Gas Field

AUTHOR: publics.bg

© Ken Lund@flickr.com

A Chinese state-owned oil and gas company is among several firms showing interest in investing in Cyprus' offshore natural gas field, the island's interior minister said Sunday, as reported by the Wall Street Journal.

Neoklis Sylikiotis didn't elaborate on what kind of investment CNOOC is looking to make. But Politis newspaper said the firm is looking to be a major player in building the infrastructure that would bring the gas to shore and process it for export and to possibly secure quantities of gas to feed China's growing energy demand.

In December, U.S. firm Noble Energy announced the discovery of an estimated 5-8 trillion cubic feet (140-230 billion cubic meters) of gas inside one of 13 blocks that together make up the island's 19,700-square-mile (51,000-square-kilometer) exclusive economic zone off its southern coast.

The Cypriot field sits close to a huge Israeli gas find and the two countries are currently in talks on ways of jointly exploiting the mineral wealth.

And last month, Cyprus launched a second licensing round for more offshore exploratory drilling.

"It's significant that after Noble confirmed its findings in Bloc 12, interest in the other blocs is growing," Sylikiotis said.

Sylikiotis' remarks came days after Finance Minister Kikis Kazamias said an Asian investor is interested in buying around EUR 500 million (EUR 665 million) worth of Cypriot bonds.

The discovery of gas is a boon for eurozone member Cyprus struggling to restore investor confidence as its near-junk credit rating — due to its banks' heavy exposure to Greek debt — has left it largely unable to borrow from international markets.

But it has also rankled with Turkey which doesn't recognize Cyprus as a sovereign state and says it has rights to a large swath of the island's exclusive economic zone.

Cyprus was split into an internationally recognized Greek speaking south and a breakaway Turkish speaking north in 1974 when Turkey invaded after an short-lived coup by supporters of a union with Greece.

Turkey says a Greek Cypriot mineral deposit search flouts the rights of Turkish Cypriots to gas-generated riches. Tensions were raised last year when Ankara sent a warship-escorted research vessel to look for fuel off the island's southern coast.

The Cypriot government says searching for oil and gas is its sovereign right and has called on Turkey to abandon its "gunboat diplomacy."