In recent years the Republic of Cyprus (“Cyprus”) has taken great strides in its attempt to develop its hydrocarbon resources. In particular it has concluded a number of bilateral agreements with Egypt, Lebanon and Israel in order to delimit its Exclusive Economic Zone (“EEZ”). The Ministry of Commerce, Industry and Tourism of Cyprus (the “Ministry”) has also held its first hydrocarbon licensing round, which closed on 16 August 2007, with Noble Energy International Ltd (“Noble”) receiving an exploration licence for block 12 (there are 13 blocks in the Cyprus EEZ, however only 11 of the 13 blocks were contested in the first licensing round).
Noble has estimated that block 12 contains a mean range of seven trillion cubic feet of gas, however further rounds of exploratory drilling will be needed in order to confirm these estimates. In light of this and in order to keep the momentum going, the Cyprus Council of Ministers has now authorised the Ministry to proceed with all the necessary steps for the launching of the second hydrocarbons’ licensing round for the remainder of the blocks.
This article aims to explain the hydrocarbon licensing regime in Cyprus and assist companies which may be interested in obtaining a hydrocarbon licence from the Ministry.
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