Hydrocarbon Exploration Activities Offshore Cyprus Solon Kassinis Director

Hydrocarbon Exploration Activities Offshore Cyprus Solon Kassinis Director - Energy Service Delegation of French Oil & Gas Companies Nicosia, 05 December 2012 Ministry of Commerce, Industry & Tourism Republic of Cyprus

Gas Discovery - Block 12 Oct. 2008: Exploration Licence and PSC with Noble Energy International Ltd Sept. 2009: 469 sq km 3 D seismic survey (Prospect: Aphrodite) Jun. 2011: 4, 000 km 2 D seismic survey + Grav & Mag Surveys Sept. 2011: First Exploratory Well Oct. 2011: First Renewal of the Exploration Licence – 25% Relinquishment REPUBLIC OF Energy Service –

Gas Discovery - Block 12 Natural Gas Discovery 28 Dec. 2011 7 tcf gross mean estimated resources 40 sq. miles field area 5, 860 m total depth 1, 688 m water depth REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Appraisal Drilling An appraisal well is planned to be drilled in Aphrodite field within the first quarter 2013 5, 950 m total depth 1, 730 m water depth Preparation of tenders for the appraisal drilling under progress The whole appraisal process is anticipated to be completed by early 2015 ENSCO 5006 REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Upstream Development Verification (exploratory) well drilling Reservoir appraisal and assessment Studies on the installation of offshore and onshore equipment Production drilling and well completion Subsea system installation REPUBLIC OF Deep water host commissioning Energy Service –

Gas Discovery - Next Steps: Pipelines Studies are underway regarding the pipeline routing from the gas field to Cyprus’ shore Gas Supply from Block 12 via pipeline: 2017 -2018 Interim Solution: Proposals for the transport of natural gas to Cyprus for meeting its domestic demand under evaluation Submerged Canyon Complex Subduction Zone REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Downstream Development The political decision for the establishment of an onshore LNG plant has been taken Available land the construction up to 3 trains (5 MT/year each) Additional gas for flows from other upstream fields (EEZ of the Republic of Cyprus and the neighboring countries) will be handled by the plant It will be the largest investment in the island's history Indicative timetable for project competition: 2019 REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Downstream Development LNG Export to Regasification Terminals REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Downstream Development Natural Gas Pipeline: Israel-Cyprus-Greece LEGEND Existing pipeline Planned pipeline Tans-Med Gas Pipeline Compressor Station REPUBLIC OF Energy Service –

Gas Discovery - Next Steps: Downstream Development Undersea Electric Power Line: Israel-Cyprus-Greece REPUBLIC OF Energy Service –

Natural Gas Supply to Europe (2011) LNG Flows Pipeline Gas Flows Source: BP Statistical Review of World Energy REPUBLIC OF LNG Pipeline Gas Qatar: 43 bcm Russia: 115 bcm Algeria: 13 bcm Norway: 93 bcm Nigeria: 14. 5 bcm Algeria: 33 bcm Egypt: 4 bcm Trinidad Tobago: 4 bcm Norway: 2. 5 bcm Energy Service –

Natural Gas Demand in Europe - 2030 Primary Energy Consumption (Μtoe) Natural Gas Share in EU’s Primary Energy Consumption (%) Source: Eurostat & Eurogas REPUBLIC OF Energy Service –

Natural Gas Demand in Europe - 2030 Necessary Additional Natural Gas Supplies up to 2030 Natural Gas Production within EU declines The share of Natural Gas in EU’s primary energy consumption will remain high i. e. mainly for power generation purposes The exploitation of shale gas faces environmental challenges The North East Mediterranean Region could be a new source for Natural Gas Supply to Europe Source: Eurogas REPUBLIC OF Energy Service –

More Gas (Oil? ) Discoveries are coming… 2 nd Licensing Round: 11 Feb. – 11 May 2012 Available Blocks: 1 -11 & 13 Number of Applicants: 15 Companies/Consortia Number of Applications Submitted: 33 Negotiation Phase v Blocks 2 & 3: ENI-KOGAS v Block 9: Total-Novatek-GPB v Block 11: Total REPUBLIC OF Energy Service –

2 nd Licensing Round Block 2 v Water Depth: 248 - 2, 051 m (average 1, 575 m) v Average Distance from Vasilikos: ~75 km Block 3 v Water Depth: 782 - 2, 020 m (average 1, 481 m) v Average Distance from Vasilikos: ~125 km Block 9 v Water Depth: 1, 887 - 2, 351 m (average 2, 108 m) v Average Distance from Vasilikos: ~105 km Block 11 v Water Depth: 1, 194 - 2, 186 m (average 1, 621 m) Extensive Seismic Data: Proposed Working Program for Blocks 2, 3, v Average. Existing Distance from Vasilikos: ~190 km 9 & 11: v 2 D seismic grid 5 x 5 km v Extensive 2 D & 3 D seismic surveys v 659 sq. km 3 D (2007) seismic data in Block 3 v 1 / 2 exploratory wells for the first exploration phase (3 yrs) REPUBLIC OF Energy Service –

Cyprus' Energy Profile Will Change Radically… New Exploration Licenses (more hydrocarbon discoveries) Proposals for gas supply as interim solution (2015) Supply to Cyprus Gas Establishment of LNG via Pipeline plant for gas transport to EU and the International Markets Other options for gas monetization: • Gas export pipeline • GTL • Petrochemicals Cyprus can develop the necessary infrastructure for providing services to drilling activities REPUBLIC OF Energy Service –

Thank you for your attention! REPUBLIC OF Energy Service –