December 19, 2012 / 3:51 PM / 5 years ago

Cyprus ends talks with Novatek/Total over offshore gas field

NICOSIA, Dec 19 (Reuters) - Cyprus said it had ended talks with a consortium, including Russia’s Novatek and France’s Total, that had been bidding for potential development of a natural gas field off the island.

Stefanos Stefanou, a Cypriot government spokesman, said on Wednesday that negotiations for the block would shift to another consortium comprising South Korea’s Kogas and Italy’s ENI, which is already in talks with authorities for two other fields.

The decision effectively excludes for the present any Russian involvement in developing Cypriot offshore gas in one of the most promising resource regions discovered in the past decade.

Stefanou said there had been insufficient progress in talks with the consortium, which is seeking rights over the offshore area, or block.

“The Council of Ministers decided to rescind its approval for direct negotiations and declare the negotiations over,” Stefanou told reporters after a cabinet meeting.

In addition, he said, talks would start with Total, which is also bidding on its own for rights over one field, for a second gas field.

Cyprus in October declared the start of exploratory talks with a number of companies for the potential development of offshore natural gas fields.

The island is located in the resource rich but largely untapped Levant Basin in the eastern Mediterranean.

Neighbouring Israel has reported some of the largest natural gas finds worldwide of the past decade, and last year Cyprus itself said it discovered between 5 trillion and 8 trillion cubic feet of gas in one offshore field under concession to Noble Energy.

Government officials have said they hope to introduce gas to the domestic market by 2019 and also be in a position to export it through an LNG terminal.

Turkey, which lies north of Cyprus, says the ethnically split island has no authority to explore for gas.

Cyprus’s internationally recognised government hopes future profits will spur growth on the recession-hit island, which was forced to seek an international bailout this year due to its exposure to debt-crippled Greece. (Writing By Michele Kambas; editing by Jane Baird)

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