How Cyprus Licensing Works

Cyprus awards offshore exploration rights through Production Sharing Contracts (PSC) via competitive bidding. This guide explains the licensing process from application to production.

Licensing Process Overview

1

Licensing Round

MECI announces blocks for bid

2

Bid Submission

Companies submit technical & financial bids

3

Evaluation

Government evaluates and selects winners

4

PSC Signing

Contract signed, exploration begins

The Ministry of Energy, Commerce and Industry (MECI) is responsible for conducting licensing rounds. Interested companies must demonstrate technical capability, financial capacity, and submit a work program with minimum commitments for each exploration phase.

Bids are evaluated based on the proposed work program (seismic surveys, wells), financial terms, technical capability, and health/safety/environment credentials. Winning bidders enter into a Production Sharing Contract with the Republic of Cyprus.

Exploration Phases

1

Initial Exploration

3 years
Minimum Commitments:

Geological and geophysical studies, 2D/3D seismic acquisition

Relinquishment:

25% of area at end of phase

2

First Extension

2 years
Minimum Commitments:

Minimum one exploration well

Relinquishment:

25% of remaining area

3

Second Extension

2 years
Minimum Commitments:

Additional exploration well if prospectivity confirmed

Relinquishment:

Remaining non-discovery areas

Total exploration period can extend up to 7 years. Extensions may be granted if the contractor demonstrates ongoing prospectivity and commitment.

Path to Production

Discovery Declaration

Operator declares commercial discovery within 30 days

Appraisal Period

Up to 5 years to appraise and delineate the field

Development Plan Submission

Detailed field development plan submitted for approval

Government Approval

MECI reviews and approves development plan

Production License

Production license granted for 25 years, extendable

Key Requirements

Technical Capability

  • Proven deepwater exploration experience
  • Qualified technical personnel
  • HSE management systems
  • Track record in similar environments

Financial Capacity

  • Minimum net worth requirements
  • Bank guarantees for work commitments
  • Parent company guarantee (if applicable)
  • Insurance coverage requirements

Environmental Requirements

All offshore activities require environmental impact assessments and permits from the Department of Environment. Key requirements include:

Exploration Phase

  • • Environmental Impact Assessment (EIA)
  • • Marine mammal protection protocols
  • • Drilling waste management plan

Production Phase

  • • Full EIA with public consultation
  • • Decommissioning plan and bond
  • • Oil spill response capability
View Licensing Rounds PSC Fiscal Terms