Hydrocarbon Activities in Cyprus G Chr Pelaghias Executive

Hydrocarbon Activities in Cyprus G. Chr. Pelaghias Executive Director European Rim Policy and Investment Council (ERPIC) 23 April, 2013 Larnaca

Eastern Mediterranean The Levant and Nile Delta Basins The Levant Basin (offshore Israel, Gaza, Lebanon, Syria and Cyprus) is estimated to hold reserves of 1. 7 billion barrels of recoverable oil and 122 trillion cubic feet of natural gas. The Nile Delta Basin Province (offshore Egypt) is estimated to hold reserves of 1. 8 billion barrels of recoverable oil, 223 trillion cubic feet of recoverable gas, and 6 billion barrels of natural gas liquids. Larnaca 23 April, 2013 Copyright ERPIC

The Levant and Nile Delta Basins Larnaca 23 April, 2013 Copyright ERPIC Cyprus

Natural Gas Discoveries Larnaca 23 April, 2013 Copyright ERPIC Eastern Mediterranean

Cyprus 1 st Licensing Round Cyprus held its 1 st Offshore Licensing Round in 2007 offering 11 Blocks within its Exclusive Economic Zone. Three applications were submitted covering Blocks 06, 11 and 12. Blocks 03 and 13 were excluded, due to a MC 3 D seismic survey that was conducted during the time of the licensing round. Noble Energy International Ltd. , (Noble) a subsidiary to Houston based Noble Energy Inc. , was the only company awarded a Exploration License for Block 12 on 24 October 2008. Noble began drilling an appraisal well in Block 12 (“Aphrodite field”) on 20 September 2011. The first results were confirmed on 28 December 2011. On 23 October, 2012 Noble received permission from the Cyprus Government to transfer 15% of the License to Israeli based Delek Drilling LP. and 15% of the License to Avner Oil Exploration LP. , based in Israel. Larnaca 23 April, 2013 Copyright ERPIC Aphrodite Field Source: Ministry of Commerce, Industry and Tourism, Cyprus

2 nd Licensing Round Petra Petroleum(Canada) ATP East Med No 2 BV (US) Naphtha Israel Petroleum Corporation Limited (Israel) DOR Chemicals Limited (Israel) Modiin Energy Limited Partnership (Israel) Total E&P Activities Petroliers (France) Novatek Overseas Exploration and Production Gmbh (Russia) Gazprom Bank Global Resources (Russia) Premier Oil (UK) VITOL (UK) PETRONAS (Malaysia) Edison International S. p. A (Italy) Delek Drilling Ltd Partnership (Israel) Avner Oil Exploration Ltd Partnership(Israel) Enel Trade S. p. A (Italy) Woodside Energy Holdings PTY Ltd (Australia) ENI (Italy) KOGAS (Korea) AGR (Norway) OAK Delta NG Exploration Joint Venture (Israel/US/Cyprus) Capricorn Oil (UK); Marathon Oil (US) Orange NASSAU Energie (Holland) CC Energy SAL (Lebanon) PT Energy Mega Persada Tbk & Frastico Holdings Limited(Canada/Indonesia/Cyprus) Emannuelle Geo Global Rosario (Israel) Larnaca 23 April, 2013 Copyright ERPIC Cyprus

Hydrocarbon Developments Cyprus Noble and its partners are planning appraisal drilling in Aphrodite by June 2013. Pre‐Feed (Preliminary Front End Engineering Design) is in progress and will be completed by Q 2 2013. Appraisal drilling will take place during the summer of 2013, and by Q 4 we should be able to confirm gas volumes and commerciality, taking into account export and project execution options. ENI/KOGAS are about to start their survey program, with exploration drilling scheduled early 2015. Total are also about to start their survey program, with exploration drilling scheduled earlier, in 2014. Cyprus’ Current Natural Gas Demand is approx. <1 bcm/year expected to rise to approx. 1. 5 bcm/year in 2035. Natural gas export is necessary in order to make exploration viable. Larnaca 23 April, 2013 Copyright ERPIC

Vassilikos Energy Center Vassilikos Cyprus have decided to establish a Energy Centre, which will include facilities for the import, storage of strategic and operational stocks, management, distribution and export of oil products, as well as facilities for the import, storage and liquefaction of Natural Gas (LNG) for export. Larnaca 23 April, 2013 Copyright ERPIC Source: Ministry of Commerce, Industry and Tourism, Republic of Cyprus

Cyprus Onshore / Onshore Pipeline Network Offshore Pipeline from Block 12 to Receiving Terminal in Cyprus § 200 km+ pipeline at an estimated cost of US$ 2 billion (approx. € 1. 5 billion) Receiving Terminal for Domestic Market § Receiving Terminal at Vassilikos Energy Center. Project is adjacent to the construction of the offshore pipeline, Cost to be determined Onshore Distribution Network for Domestic Market § The Gas Network will initially consist of 3 pipelines connecting the Gas Import Hub with the three existing downstream Power Stations. § The estimated cost for “Phase A” of this project is around € 65 million. Towards this cost Cyprus has managed to Secure a € 10 million grant from EU under the European Economic Program for Recovery (EEPR). The gasification of the Island (Phases “B” and “C” connecting the Receiving Terminal to Industries, Hotels and Households) will be an on‐going process and it is expected to cost over € 500 million. Larnaca 23 April, 2013 Copyright ERPIC Source: Noble energy Inc. Source: Natural Gas Public Company (DEFA), Republic of Cyprus 13

Cyprus Government Strategic Oil Stocks Cyprus is obligated under EU legislation to keep 90 days of strategic oil stocks. Vassilikos The Cyprus government, will construct a state fuel storage terminal at the Vassilikos Energy Center. In December 2012, the government began negotiations with Dutch VOPAK Oil EMEA, as its strategic partner/investor for the project. Larnaca 23 April, 2013 Copyright ERPIC

Cyprus VTT Vassiliko Oil Terminal VTT Vassiliko Ltd. is 100% owned by VTTI which in turn is 50/50 owned by Vitol Group and MISC Berhad of Malaysia. Vassilikos The terminal will be the only petroleum product transshipment and storage terminal in the Eastern Mediterranean. The project consists of a two‐phase operation of a total of 28 storage tanks with a combined capacity of 643, 000 m³. A third phase is under consideration which would increase the number of tanks to 40 and a total capacity to 858, 000 m³. The project includes the construction of a 1. 2 km jetty with four berths capable of accommodating vessels from 220, 000 dwt to 10, 000 dwt. Cost of Phase 1 and 2 ≈ € 300 million. Cost of Phase 3 ≈ € 120 million. Construction started in 2011 and operations are scheduled to begin in 2014. Source: VTTI. Larnaca 23 April, 2013 Copyright ERPIC

Cyprus Euro-Asia Interconnector The Euro‐Asia Interconnector intends to link the electrical systems of Israel, Cyprus and Greece via sub‐marine DC cables and HVDC onshore stations in each country. It will have a total capacity of 2000 MW. Vassilikos The project has been submitted to the EU for consideration and approval. The participants are: • DEH‐Quantum Energy • Electricity Authority of Cyprus • Transmission System Operator (TSO) of Cyprus • Israel Electric Corporation Vassilikos Power Station The project is technologically feasible based on MI 500 k. V 500 MW cables. The cost is estimated at € 1. 5 Billion (EUR 500 million Israel‐Cyprus Connection). Timetable: • Finalizing of Feasibility Study report (02/2013) • First Stage: Project Implementation, Israel‐Cyprus and Greece‐Crete (2018); • Second Stage: Cyprus‐Crete (2020. Larnaca 23 April, 2013 Copyright ERPIC

Cyprus Export by Pipeline Larnaca 23 April, 2013 Copyright ERPIC

Export By Ship (Vassilikos LNG Terminal) Source: Cyprus National Oil Company (KRETYK) Larnaca 23 April, 2013 Copyright ERPIC Cyprus

Export By Ship (LNG) Larnaca 23 April, 2013 Copyright ERPIC Cyprus

Thank You European Rim Policy and Investment Coucil (ERPIC) www. erpic. org Pelaghias LLC www. pelaghias. com 16