Special team to make recommendations to Nicosia within six months.
By Reuters | May.13, 2012 | 4:01 AM

NICOSIA – The second foray by Cyprus into tapping offshore gas reserves received an unexpected boost on Friday when 15 companies, including international heavyweights, bid for contracts in the untapped and energy-rich east Mediterranean. Delek Group is one of the bidders.

The island, which reported a natural gas discovery in December, received 15 bids on Friday for nine offshore blocks rimming the south of the island. Total, Malaysia’s Petronas and Korea’s Kogas were among the bidders, Energy Minister Neoclis Sylikiotis said.

“Our expectations were high, and I can tell you from the outset that the results of this round very much exceeded our expectations,” he told reporters. Other bidders included Italy’s Eni, Russia’s Novatek in conjunction with Gazprom’s GPB Global Resources, Vitol, Israel’s Delek Group and Australia’s Woodside Energy Holdings.

Based on the current schedule, a team of advisers will issue its recommendations to the island’s cabinet within six months.

Over the past three years, there have been significant discoveries made in the eastern Mediterranean basin. Israel has reported two major finds offshore in the sea separating it and Cyprus.

Surveys suggest over 100 trillion cubic feet of reserves could lie untapped throughout the region, a potential that has sparked investor interest but also revived decades-old border disputes.

Cyprus’ attempts to discover offshore reserves is challenged by Turkey, while Lebanon is in dispute with Israel over the latter’s discoveries. U.S.-based Noble Energy, which has also been involved in underwater exploration in Israeli waters, in December reported 5 trillion to 8 trillion cubic feet of gas south of Cyprus. The prospect was made amid vocal opposition from Turkey, which challenges Cyprus’ jurisdiction in exploring or extracting gas.

Most of the interest shown by bidders was for a block lying northeast of the recent discovery, on the maritime border between Cyprus and Israel. Turkey, which supports a breakaway state in north Cyprus, has accused Cyprus’ internationally-recognized Greek Cypriot government of undermining peace talks on the ethnically split island.

Cyprus says any exploration is within its rights, and has received backing from its EU partners.

Sylikiotis avoided any reference to the issue during a brief event in Nicosia attended by representatives of the bidders.

“Our expectations are entwined with expectations for a new era of prosperity, progress and peace of our people, and for people in the surrounding region,” he said.