Italian firm to drill 2 wells off Cyprus in next 2 months

The top executive of ENI said Friday that the Italian oil and gas company will drill two exploratory wells off Cyprus over the next two months, expressing confidence that significant reserves can be found for possible export to Europe.

ENI CEO Claudio Descalzi described Cyprus as a "natural bridge" linking existing and potential gas deposits in the eastern Mediterranean with Europe, which is looking to diversify its energy sources amid increasing gas consumption.

"We believe in Cyprus," Descalzi said after talks with Cypriot President Nicos Anastasiades. "Cyprus is a natural bridge to Europe and Europe is importing more than 70 percent of its gas and gas consumption is growing."

Gas consumption rose 5 percent in Europe last year and it will increase annually by 100 million cubic meters (3.5 billion cubic feet) each of the next two years, said Descalzi.

The first exploratory well will be drilled in partnership with France's Total next month in an area off the island's southwest. ENI and South Korea's Kogas will start drilling for the second well in January in the island's southeast.

Descalzi said ENI has a "strategic" interest in the region as waters around Cyprus remain largely unexplored. ENI has invested 450 million euros ($533 million) in exploratory drilling, seismic and geological surveys.

He said Italy is in talks with Cyprus, Egypt and Greece to possibly create a new energy corridor to Europe, with options including processing newly found gas at Egypt-based plants for export to the continent. Another option is to supply Cyprus' domestic needs.

Previous drilling had failed to locate sizeable gas deposits off Cyprus, but that hasn't disheartened companies licensed to drill in Cypriot waters. Descalzi said companies drilled 11 times in nearby Egyptian waters and found nothing before ENI discovered Zohr, the largest gas deposit ever found in the Mediterranean.

"You have to continue, and Cyprus is still a virgin area because we didn't drill a lot of wells, just 2-3 wells, so we're optimistic," said Descalzi.

Earlier, Texas-based Noble Energy discovered a field off Cyprus estimated to contain over 4 trillion cubic feet in reserves.

ExxonMobil said it will go ahead with drilling two wells in the second half of next year.