ExxonMobil is reaffirming its commitment to the Eastern Mediterranean, with recent expansions into Egypt and Greece and renewed plans for exploration in Cyprus. It has been over two years since ExxonMobil last conducted drilling operations within Cyprus’ Exclusive Economic Zone (EEZ), but the company is preparing to return.
Energy Minister Giorgos Papanastasiou recently confirmed that ExxonMobil is set to launch a new exploration drilling program in Cyprus’ EEZ early next year. Initial efforts will focus on a new, promising target within Block 5, referred to as “Electra,” followed by further exploration in Block 10. Though originally expected to focus on the existing Glaucus discovery, plans in Block 10 now appear to involve a new gas target.
In early 2022, ExxonMobil conducted its last drilling operation in Cyprus’ EEZ, which was an appraisal well in the Glaucus gas field. While no official results were released, industry reports suggested that the findings were lower than anticipated, estimating reserves at under 5 trillion cubic feet (tcf)—below the initial 5-8 tcf projected in 2019.
Since then, ExxonMobil has carried out seismic surveys in Blocks 5 and 10, identifying multiple potential sites. Depending on successful drilling and discovery sizes, ExxonMobil is considering several export options, including transporting gas via pipeline to Egypt, developing a floating LNG (FLNG) facility, or establishing a land-based LNG terminal. The latter would necessitate discoveries totaling at least 15 tcf to be viable; with the Glaucus discovery’s estimated 5 tcf, further drilling results would need to yield an additional 10 tcf.
The full assessment of the upcoming drilling results and potential development strategies could extend into 2025, with a likely timeline for exploitation of any significant gas finds stretching toward the end of the decade.
ExxonMobil’s Exploration Strategy
ExxonMobil’s global approach highlights its belief in the continued significance of oil and natural gas, which the company forecasts will comprise over 50 percent of the energy mix by 2050. Accordingly, ExxonMobil is focused on producing its own LNG reserves rather than acquiring those from third parties and has long-term plans to broaden its LNG portfolio.
The company’s Vice President of Exploration, John Ardill, recently shared insights into ExxonMobil’s “big field” strategy, emphasizing the search for substantial oil and gas reserves to support not only LNG but also alternative energy projects. Ardill outlined a cautious, resource-centered approach to exploration, particularly in regions like the East Mediterranean. This strategy involves a careful evaluation of resources, geological stability, and environmental factors before committing to large-scale projects.
For East Med operations, ExxonMobil seeks areas with favorable geology, political stability, and the potential to minimize the carbon footprint of production. Ardill highlighted the attractiveness of “market-led” gas opportunities in locations close to key markets, including Egypt, where ExxonMobil has made new investments.
Developments in Egypt
ExxonMobil’s footprint in Egypt’s EEZ continues to grow, with recent acquisitions of deepwater blocks Masry and Cairo, situated near Cyprus’ Blocks 5 and 10. Adjacent to notable gas fields like Zohr, Cronos, and Zeus, these new blocks represent key areas for potential discoveries. Following recent seismic studies, the company is preparing to commence drilling operations in its North Marakia concession in late 2024, with plans to move the rig to Block 5 in Cyprus once the Egyptian operations are completed.
As Egypt’s domestic gas production has declined by approximately 30 percent over the last three years, the country is eager for ExxonMobil’s upcoming drilling operations to yield significant results.
Increased Activity in Greece
In addition to its Cypriot and Egyptian initiatives, ExxonMobil is extending its exploration activities in Greece, particularly in its “South-West-of-Crete” block. Having recently secured a three-year extension for this area and an additional six months for the “West-of-Crete” block, the company plans to finalize data collection and evaluate potential drilling targets.
True to its methodical approach, ExxonMobil will refrain from drilling until its 3D seismic data assessments are complete. Partnering with Helleniq Energy, the company aims to fully understand the resource potential before taking further steps.
East Med Partnerships and Future Prospects
A cornerstone of ExxonMobil’s operations in the Eastern Mediterranean is its partnership with QatarEnergy, which shares stakes in Cyprus’ Blocks 5 and 10, as well as Egypt’s Masry and Cairo blocks. Initially, ExxonMobil appeared hesitant in its regional engagement, but recent projects indicate a renewed focus on developing these resources, aligning with its strategy to expand its LNG portfolio. If successful, this approach could establish Cyprus as a central hub for ExxonMobil’s Eastern Mediterranean operations.
Source: Cyprus Mail