France’s Total boosts Cypriot gas plan as it eyes Iran exit

My SA – French energy company Total says it is looking to expand its search for natural gas off Cyprus’ south coast and seeks to secure another exploratory drilling license, days after warning it could exit Iran over renewed U.S. sanctions there.

Stephane Michel, Total’s Middle East exploration chief, said Monday that the company has applied for a license to search for hydrocarbons in Block 8, an area south of Cyprus where Italian company Eni is already licensed to carry out exploratory drilling.

Total is partners with Eni to search for oil and gas in two other areas off Cyprus. In one of the two, Eni said in February it has discovered a “promising” gas deposit with similar geological features as that of another discovery in Egyptian waters it described as the largest ever in the Mediterranean.

Cyprus Energy Minister Yiorgos Lakkotrypis called Total’s move an “important development” that expands the company’s exploration footprint off Cyprus.

Lakkotrypis said what gives the move added weight is the fact that Total’s interest comes three months after Turkish warships blocked a drillship from carrying out exploratory drilling by Eni in Block 3, an area southeast of Cyprus.

“After all that happened in Block 3, we see one of the most important partners of the Cyprus Republic wanting to expand its presence inside the Exclusive Economic Zone, especially in an area like Block 8 which is still unexplored.”

Turkey opposes what it calls a “unilateral” gas search by the ethnically divided island’s Greek Cypriot-run government, insisting that it flouts the rights of breakaway Turkish Cypriots to natural resources. Only Turkey recognizes a Turkish Cypriot declaration of independence and claims parts of exploration areas south of Cyprus which it says fall within its continental shelf.

The Cyprus government says any potential gas proceeds will be shared equitably with Turkish Cypriots after an accord reunifying the island is reached.

A deposit discovered off Cyprus by Texas-based Noble Energy in 2011 is estimated to contain around 4.5 trillion cubic feet of gas.

Total’s move also comes just days after it said it would have to withdraw multi-billion-dollar project in Iran unless it is granted a waiver by U.S. authorities. The group said it cannot afford to be exposed to U.S. sanctions, including the loss of financing by American banks.