ExxonMobil, Qatar Sign Cyprus Gas Deal despite Turkey Opposition

Cypriot Energy Minister Natasa Pilides stands alongside Qatari ambassador Ali Yousef al-Mulla (2nd), Qatar Energy's Ali al-Mana (R) and Varnavas Theodossiou (L), a lead country manager for ExxonMobil, after signing a hydrocarbon exploration contract. (AFP)
Cypriot Energy Minister Natasa Pilides stands alongside Qatari ambassador Ali Yousef al-Mulla (2nd), Qatar Energy's Ali al-Mana (R) and Varnavas Theodossiou (L), a lead country manager for ExxonMobil, after signing a hydrocarbon exploration contract. (AFP)
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ExxonMobil, Qatar Sign Cyprus Gas Deal despite Turkey Opposition

Cypriot Energy Minister Natasa Pilides stands alongside Qatari ambassador Ali Yousef al-Mulla (2nd), Qatar Energy's Ali al-Mana (R) and Varnavas Theodossiou (L), a lead country manager for ExxonMobil, after signing a hydrocarbon exploration contract. (AFP)
Cypriot Energy Minister Natasa Pilides stands alongside Qatari ambassador Ali Yousef al-Mulla (2nd), Qatar Energy's Ali al-Mana (R) and Varnavas Theodossiou (L), a lead country manager for ExxonMobil, after signing a hydrocarbon exploration contract. (AFP)

US giant ExxonMobil and Qatar Energy signed a contract Friday for oil and gas exploration and production-sharing off the divided island of Cyprus despite Turkey's opposition to the deal.

Cypriot Energy Minister Natasa Pilides, Varnavas Theodosiou, CEO of ExxonMobil Cyprus, and Ali al-Mana, director of Qatar Energy's International Upstream and Exploration, signed the contract in Nicosia.

It is the second gas exploration contract that the consortium has signed for Block 5 in the island's Exclusive Economic Zone (EEZ).

In February 2019, the consortium discovered a huge natural gas reserve off Cyprus in Block 10, the island's largest find to date, holding an estimated five to eight trillion cubic feet.

The consortium plans to drill an appraisal well on Block 10 in late December, with results expected by the end of February.

Oil and gas drilling off Cyprus has been interrupted by the Covid-19 pandemic.

"Despite the increasingly difficult working environment for the global oil and gas industry, today we are taking a decisive step towards enhancing our mutually beneficial partnership," Pilides said at Friday's signing ceremony.

Asked about Turkey's negative reaction to the licensing of Block 5, Pilides said: "We proceed based on international law and the Law of the Sea; this has always been our principle."

Fieldwork on Block 5 will begin in the second half of 2022, she said.

Turkey has threatened to prevent ExxonMobil's search for oil and gas off Cyprus after Nicosia awarded it the rights to Block 5.

Last week, the Turkish foreign ministry said a sector of the licensed area violates Turkey's continental shelf in the eastern Mediterranean.

"Turkey will never allow any foreign country, company or ship to engage in hydrocarbon exploration activities in its maritime jurisdictions," the ministry said.

Ankara would "defend" its rights and those of the Turkish Republic of Northern Cyprus, it said.

The breakaway TRNC, recognized only by Ankara, lays claim to energy resources discovered off its coast, insisting the island's natural resources belong to both communities.

The eastern Mediterranean has become an energy hot spot, with significant natural gas finds for Cyprus, Israel and Egypt.

Ankara was accused of "gunboat diplomacy" in February 2018 when the Turkish navy prevented a ship leased by Italy's ENI from reaching its drilling target in Cyprus's Block 3.

The European Commission has urged Turkey to de-escalate and vowed to defend the interests of member states Greece and Cyprus.

Turkey was widely condemned for sending its own drillships into Cypriot waters for energy exploration, with the EU slapping sanctions on Ankara.

In the first half of 2022, ENI and France's Total are expected to drill in their licensed blocks.

Cyprus has been divided since Turkey invaded and occupied its northern third in 1974 in response to a Greek-engineered coup aiming to annex the island.

Nicosia has pushed ahead with offshore energy exploration despite the collapse in 2017 of UN-brokered talks to end the country's decades-long division.



Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
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Moody's Upgrades Saudi Arabia's Credit Rating

Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters
Moody's indicated that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification. Reuters

The credit rating agency “Moody’s Ratings” upgraded Saudi Arabia’s credit rating to “Aa3” in local and foreign currency, with a “stable” outlook.
The agency indicated in its report that the rating upgrade and stable outlook are results of the Kingdom's ongoing progress in economic diversification and the robust growth of its non-oil sector. Over time, the advancements are expected to reduce Saudi Arabia’s exposure to oil market developments and long-term carbon transition on its economy and public finances.
The agency commended the Kingdom's financial planning within the fiscal space, emphasizing its commitment to prioritizing expenditure and enhancing the spending efficiency. Additionally, the government’s ongoing efforts to utilize available fiscal resources to diversify the economic base through transformative spending were highlighted as instrumental in supporting the sustainable development of the Kingdom's non-oil economy and maintaining a strong fiscal position.
In its report, the agency noted that the planning and commitment underpin its projection of a relatively stable fiscal deficit, which could range between 2%-3% of gross domestic product (GDP).
Moody's expected that the non-oil private-sector GDP of Saudi Arabia will expand by 4-5% in the coming years, positioning it among the highest in the Gulf Cooperation Council (GCC) region, an indication of continued progress in the diversification efforts reducing the Kingdom’s exposure to oil market developments.
In recent years, the Kingdom achieved multiple credit rating upgrades from global rating agencies. These advancements reflect the Kingdom's ongoing efforts toward economic transformation, supported by structural reforms and the adoption of fiscal policies that promote financial sustainability, enhance financial planning efficiency, and reinforce the Kingdom's strong and resilient fiscal position.