Cairn Energy Plc said Thursday it has teamed up with Houston-based Marathon Oil Corp. to jointly bid for oil and gas exploration rights in Cyprus, where huge offshore discoveries of natural gas have reignited international tensions over the divided island.
Cairn and joint venture partner Marathon submitted bids May 11, with a decision by the Cyprus Ministry of Commerce Industry and Tourism expected later this year.
Recent discoveries of natural gas deposits in the waters off Cyprus and Israel have aroused interest in the eastern Mediterranean from the world’s leading energy firms, including Italian giant Eni SpA and French major Total SA. However, the prospect of hydrocarbon wealth has also served to enflame a long-standing dispute between the internationally recognized Republic of Cyprus and the Turkish-controlled Republic of Northern Cyprus.
“Cyprus offers early stage frontier exploration acreage with moderate technical risk,” said Cairn in a statement.
Despite political objections from Turkey, Cyprus earlier this year went ahead with its latest offshore licensing round, the island nation’s second offering to foreign firms following a 2007 tender.
U.S. firm Noble Energy Inc. has since made five discoveries in the block it was awarded in the 2007 round, with total natural gas resources found by the firm so far estimated at 33 trillion cubic feet of natural gas.
The drilling for gas and oil in the seabed off Cyprus – which began last year–angered Turkey, which says it abuses northern Cypriots’ rights to the same resources.
In April, Turkey launched its own exploratory drilling in the seabed offshore from the Turkish Republic of Northern Cyprus, drawing a sharp response from the government of Cyprus, which labelled the action as illegal.
Marathon and Cairn both control 40% each of the bidding consortium, which also includes junior partners CC Energy SAL and Oranje-Nassau Energie BV.
Cairn shares traded higher early Thursday. At 0724 GMT, Cairn shares were up five pence, or 1.8%, at 296p.
