International Companies Bid for Cyprus Oil Exploration Licenses

NICOSIA, (AP), Aug 16, 2007

A U.S.-based company and an international consortium applied for licenses Thursday to explore for oil off Cyprus' coast, the Trade and Industry Ministry said.

Three applications had been submitted for three out of 11 offshore blocks made available in the first licensing round launched earlier this year, said Efstathios Hamboullas, the ministry's permanent secretary.

The U.S. company applied for one block while a consortium of three companies from Norway, the United Arab Emirates and the U.K. applied for two blocks.

Cyprus is auctioning off oil exploration rights in around 70,000 square kilometers to the south, southwest and southeast of the island. Turkey has reacted angrily to the venture, and has warned Cyprus not to search for oil and gas in the area, where it says it also has legal rights and interests.

Hamboullas, who did not disclose the names of the companies, said the interest shown by them was "satisfactory."

"We are still in the first stage of the first round," he said. "We expected the applicants to be between two and four."

Evaluation of the applications is expected to be completed before the end of the year and a second licensing round will be launched early in 2008, when two more blocks will be made available.

Hamboullas said more interest was expected in the next licensing round, as the results of further seismic exploration would be available by then.

Ankara insists that Turkish Cypriots should have a say in the island's oil and gas rights.

Cyprus has been divided between a Greek Cypriot south - whose government is recognized internationally - and a Turkish-occupied north since 1974, when Turkey invaded in response to a failed Athens-backed coup of supporters of union with Greece.

Turkey doesn't recognize the Cypriot government, and backs a breakaway Turkish Cypriot state in the north, where it maintains 35,000 troops.

Copyright (c) 2007 Dow Jones & Company, Inc.

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