The Two Nations Racing to Host the Next Oil and Gas Rush
It's a bit of a quiet week for major resource news. But several small items are suggesting some potentially explosive developments coming over the next several months.
One of those comes in a place I’ve been watching closely the past year: the tiny Mediterranean island of Cyprus. Which this past week announced the winning bidders for an offshore licensing round — handing out acreage that could be prospective for some of the world’s largest natural gas targets.
Cyprus’s Ministry of Energy, Commerce, Industry, and Tourism said it has awarded three offshore blocks — one to Italy’s Eni, one to an Eni/Total partnership, and the other to ExxonMobil and Qatar Petroleum.
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That’s big news because these licenses lie just kilometers away from Egyptian waters where Eni discovered the 30 trillion-cubic feet Zohr natural gas field — one of the biggest petro-finds in recent history.
Eni and a slate of fellow majors are now on the job to find something similar in Cyprus. Watch this space for more potential mega-discoveries.
But there may be even bigger prizes to be had in a couple of other spots around the oil and gas world. Starting with the emerging exploration and development destination of Iran — where officials said they expect to offer their first international project tender during the first quarter of 2017.
Representatives from the National Iranian Oil Company said the South Azadegan oil field will be tendered by the end of March. Also, the representatives revealed some key details about the contracts — namely, that the project licenses will be offered on a 20-year term.
That will consist of a 5-year exploration and development period plus a 15-year production period. Which is relatively short by global standards — meaning it will be interesting to see how international E&Ps react when it comes time to bid on such a contract.
In the meantime, interest from E&Ps is also heating up in another corner of the global: Brazil. Where France’s Total this week announced a $2.2 billion deal to buy stakes in two offshore presalt oil fields from state major Petrobras.
A few days later, Total said it is now planning to spend $1 billion per year on Brazil oil and gas projects going forward. Showing that the major is very motivated on this part of the world.
At the same time, interest in Brazil is growing stronger from big investors like China. With Petrobras recently signing a $5 billion funding deal with China Development Bank.
That shows a bit of a rush emerging for oil projects in this part of the world. Watch to see if this becomes perhaps the world’s premier destination for new E&P investment — or if up-and-comers like Iran (or maybe even Cyprus) can challenge for hosting the next oil and gas rush.
Here’s to the next big thing,
By Dave Forest
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