Government 'disappointed' with Chinese oil snub

GOVERNMENT officials are said to have been let down a decision by the China National Petroleum Corporation (CNPC) not to submit a bid to explore for hydrocarbon exploration south of the island.

According to some media reports, the government was under the impression the CNPC's bid was in the bag ¨C especially after high-ranking officials of the mammoth organisation had recently visited the island and held talks with the government.

On Friday, the government tried to stay upbeat in the wake of criticism that its oil plans amounted to a flop, after just four companies expressed interest in offshore hydrocarbon exploration off the shores of the island.

Although established companies, the bidders did not include world-leading oil companies such as Shell and BP.

Former Commerce Minister Nicos Rolandis even went as far as to say that the island "had become a laughing stock in the eyes of the international community".

Cyprus, who were expecting their biggest interest to come from China, had 11 offshore blocks on offer.

But in a letter recently sent to Commerce and Industry Minister Antonis Vasiliou from the Chinese Ambassador, it appeared that the CNPC would be eventually stepping back due to "financial reasons".

The ambassador did add, however, that his government could very well show interest in the second round of bidding.

Other press reports suggest that the Chinese may have been put off by the recent provocations of the Turkish fighter planes that have been violating Cypriot airspace in the last six months and that the Chinese government is not willing to step on the toes of the Turkish government.

On Thursday Turkish fighters carried out flyovers in Paphos.

The violation occurred at around the same time the government was receiving the oil applications, it was reported.

Foreign Minister Erato Kozakou-Marcoullis said the Republic had reported the breaches to relevant international organisations.

The two oil blocks left out of the first licensing round are the most promising in terms of potential reserves of oil and natural gas and government officials are stating that "a turnover of better bids should be delivered next time around".

The two blocks, which will be opened for bidding in the second round once 3D survey data of the seabed is available, are the ones closest to Lebanon.

The consortium which has already applied for an exploration permit in two oil blocks comprises three firms from Norway, Britain and the United Arab Emirates. The participating firms have been identified as DNO of Norway, Larsen Oil & Gas of the UAE, and Increased Oil Recovery of Britain.