Exxon’s drilling: all outcomes are possible

,JANUARY 13TH, 2019 By Charles Ellinas

THE GOOD news early in 2019 is that drilling of Delphine in block 10 has been completed, as planned, despite the problems encountered towards the end of December. And as expected, and despite the continuous aggressive rhetoric, Turkey did not intervene.

The drilling rig, Stena IceMax, has now moved to the also-promising target Glafcos in block 10, with results expected towards the end of next month. In Greek mythology Glafcos was a half man-half fish sea-god with prophetic powers.

With the drilling rig committed to another assignment, following completion of the two wells in block 10, any possibilities that a second well may be drilled at the Delphine prospect will have to wait.

The Cyprus government and ExxonMobil have decided not to announce any results at this stage and wait until after completion of the planned drilling programme later in February.

This is not unusual. For example, ENI did not announce the results from drilling at Zohr, until after completing commercial terms with the Egyptian government for the price of gas, destined for Egypt’s internal market.

In Cyprus, ExxonMobil may have technical or commercial reasons and may prefer delaying announcement of the drilling results until it knows what block 10 holds. This would allow the company time to consider its options. Should Glafcos be successful, with reasonable quantities of gas, it increases the likelihood of block 10 exploitation.

The government of Cyprus may also prefer delaying announcement of results for political reasons. This is a delicate period in the manoeuvering currently taking place for the resumption of the Cyprus problem negotiations.

For those that know ExxonMobil, and I do, what is happening is not surprising. ExxonMobil is a very rigid – very disciplined company. It announced its drilling programme for block 10 last year, with the drilling vessel retained for the required period to deliver this. And it is proceeding with it as planned, irrespective of intermediate results. After drilling is completed, next month, and the company is ready, it will announce the results. Unless we hear directly from the company, which is not the case so far, anything said should be treated as speculation.

Until all drilling is completed and results are announced we do not know the outcome – nothing has changed and all outcomes are possible, from discovery to no-discovery. It is not long to go – so let’s wait.