Cyprus considering new natural gas licensing rounds

Cyprus is considering a new licensing round for offshore natural gas exploration as demand remains strong despite global attempts to move away from fossil fuels, Energy Minister George Papanastasiou has told Reuters.

"We are in the process of evaluating potential interest," Papanastasiou said when asked about the potential for a new licensing round. "Upon seeing some interest we may decide to go for another licensing round, yes."

Cyprus has 13 offshore blocks, 10 of which are under licence to energy majors including Eni , Exxon Mobil, Chevron and TotalEnergies.

Blocks on offer could be either those not under licence, or blocks where operators may wish to relinquish their licence, Papanastasiou said, without going into detail.

"If we see any evidence that some of these blocks may be released, we may decide to go for another licensing round," he said.

The potential for the region was continuing to generate interest, he added.

"We need to develop this wealth... and this is what we intend to do," he said.

Cyprus has a target of generating 33% of its energy from renewable sources by 2030, up from 19% today. But despite almost year-round sunshine, a lack of power storage and an ageing grid have limited renewable output, especially for solar.

In the coming weeks, authorities will launch tenders for solar battery storage facilities that will help meet those targets, the minister said.

"We believe it is achievable" to meet the targets, he said.

Still, he acknowledged that natural gas was attractive - it is less polluting and cheaper than the heavy fuel oil now firing the grid.

"Natural gas still has a few decades of survival, of life in this (energy) mix."

Papanastasiou said he anticipated a gas field discovered in 2022 by Italy's Eni and France's TotalEnergies would be the first to enter production, around 2027, while another operated by US major Chevron would be closer to 2029 or 2030.

Cyprus has reported several discoveries since 2011 containing an estimated 15-16 trillion cubic feet (tcf) of untapped natural gas - the equivalent of nearly half the yearly output of the United States, the world's largest producer.

That has spurred interest from international companies amid uncertainty about supplies from Russia since its full-scale invasion of Ukraine in 2022, and about the future of new liquefied natural gas projects.