Industry Trend Analysis - Offshore Prospects Offset Turkish Opposition - SEPT 2017


BMI View: A re-escalation of tension with Turkey highlights ongoing risk to the future of hydrocarbon exploration and development in the Cyprus ' offshore. Whilst geopolitical risk is likely to remain high, the prospectivity of resources in the region will ensure continued interest from more risk-tolerant majors.

As Total begins to drill the Onesiphoros West wildcat in their license area Block 11, mounting tension regarding the progress of Cypriot offshore developments will be a concern for future investment potential in the country's undiscovered resources. Rhetoric from Turkish president Recep Tayipp Erdogan towards planned hydrocarbon activity in the Cypriot offshore continues to be critical. Several Turkish naval vessels have been dispatched to the maritime border with Cyprus, with Ankara maintaining that potential offshore hydrocarbon resources belong to the Turkish Cypriot community as well as the Greek Cypriots on the island; a point that is contested by Cyprus. Similarly, long anticipated reunification talks between the two Cypriot communities collapsed in early July adding additional pressure on Cypriot-Turkish tension (see ' Quick View: Status Quo To Persist As Reunification Talks Collaps e ' , July 7).

The flare up in a multi-year conflict comes at a time where industry interest in the offshore gas potential in Cyprus is growing, with the latest licensing round seeing Eni, Total, ExxonMobil and Qatar Petroleum acquire new acreage.

Cypriot Offshore Attracting Major Attention
Cyprus Offshore Exploration Blocks
Source: BMI

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