Per a report by AP, Eni SpA E and its South Korean partner, KOGAS, have received approval for the renewal of a license for exploration activities off the southern coast of Cyprus.
According to sources, the consent from the Cypriot Cabinet on Monday has extended the existing exploration agreement between the companies by two years to Feb 2018.
The extension will facilitate Eni to evaluate the hydrocarbon potential in offshore Cyprus. The renewal includes the licenses for Blocks 2, 3 and 9 in Cyprus’ exclusive economic zone.
After the Cabinet meeting, Cypriot Energy Minister Yiorgos Lakkotrypis said that exploration drilling could start in 2017. However, these plans were still at an initial stage and nothing has been finalized.
Earlier this year, Eni had also struck gas in the Zohr prospect in the Egyptian waters – the largest gas find ever made in the Mediterranean. Zohr is located about 6 kilometers from the boundaries of Cyprus’ Block 11 and about 90 kilometers from the Aphrodite reservoir in Block 12.
French giant Total SA TOT also received approval from the Cypriot government, earlier this month, relating to the extension of its exploration license in Block 11 for two years.
Eni expects 2015 oil and natural gas production to increase from that of 2014. The upside will be driven by the start-up of new fields and ramp-up of the projects already started in 2014, primarily in Angola, Congo, Egypt and the United States.
Eni’s constant efforts to expand its upstream operations in Cyprus, Egypt, Vietnam, Indonesia, Pakistan and Kenya will go a long way in generating profitable growth in the future. Moreover, project start-ups, inputs from big projects in Algeria, Iraq, Australia, Russia, and Egypt as well as the company’s strategic position in non-conventional gas are expected to augment volumes going forward. For 2015, volumes are also expected to rise marginally from the 2014 level. The expected production ramp-up at the Venice refinery is likely to increase production of biofuels.
Eni carries a Zacks Rank #5 (Strong Sell). Some better-ranked players from the energy sector are ReneSola Ltd. SOL and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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