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CORRECTED: France's Total to boost Cyprus energy hunt

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(Globalpost/GlobalPost)

Cyprus is close to an agreement with French energy firm Total to carry out exploratory drilling for gas and oil in two blocks off its southern shore, officials said on Thursday.

"Soon, in the next few days we will sign an agreement with France's Total for blocks 10 and 11," Commerce Minister Neoclis Sylikiotis told reporters.

He said Cyprus aspired to becoming a regional energy hub with the prospect of oil as well as natural gas being tapped beneath the sea bed.

"Cyprus seeks a broader regional role as a country that can promote energy cooperation among other countries of the region," said Sylikiotis.

Turkey has protested strongly against Nicosia's energy search, branding it illegal and beginning its own exploratory drilling off the breakaway north of the island.

Ankara has warned that companies involved in the Cyprus process could be shut out of Turkey's energy investment.

But Cyprus "will continue exercising our sovereign rights and exploiting our natural resources for the prosperity of Cypriots," Sylikiotis insisted.

He said signing licencing deals with countries like France also "protected" Cyprus politically from Turkish threats.

Cyprus has been divided since 1974, when Turkish troops invaded and occupied its northern third in response to an Athens-engineered coup in Nicosia aimed at union with Greece.

Last week, Cyprus signed licence agreements with Italy's ENI and South Korea's Kogas for exploratory drilling aimed at exploiting offshore oil and gas deposits.

In October, drilling permits subject to negotiation were approved for blocks 2, 3, 9 and 11 of Cyprus's Exclusive Economic Zone, and in December block 10 was added to the list.

An Italian-South Korean partnership signed a deal worth 150 million euros ($200 million) for permits to explore blocks 2, 3 and 9.

In December, talks with preferred bidders for block 9 -- a French-Russian tie-up involving Total ENP Activities and Novatek -- ceased after proving "unsatisfactory."

France's Total believes there could be oil reserves in blocks 10 and 11, according to officials.

US firm Noble Energy Inc was the first to drill when awarded Block 12, and in December 2011 said it had discovered gas reserves of up to 8 trillion cubic feet (226.5 billion cubic metres), with an estimated value of 100 billion euros.

This would satisfy domestic needs for decades and could enable Cyprus to become a regional player by exporting gas to Europe from 2019.

In the long term, Cyprus estimates it can supply up to 10 percent of the EU's energy demand, making the bloc less dependent on Russia.

Authorities believe there could be greater riches, not only of gas but also of oil, in adjacent blocks.

It is also estimated that there could be around 60 trillion cubic feet of gas lying in the 13 blocks that make up Cyprus's 51,000 square kilometre (20,000 sq mile) exclusive economic zone.

Cyprus is banking on its energy bonanza to eventually rescue it from recession as it seeks a European Union bailout.

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http://www.globalpost.com/dispatch/news/afp/130131/corrected-frances-total-boost-cyprus-energy-hunt