Cyprus says it remains on track to turn itself into a regional energy hub, despite new findings showing that an offshore gas field is noticeably smaller than initially estimated.
The small Mediterranean island nation, which earlier this year became the fifth country that uses the euro to receive outside financial assistance, aims to build a multibillion euro facility by 2019-20 to liquefy excess gas supply for export to Europe and beyond.
The facility is a key plank of the government's plan to restore the country to financial health and the field, dubbed "Aphrodite" after the ancient Greek goddess of love who according to myth was born in Cyprus, will anchor that.
The country's energy minister, Yiorgos Lakkotrypis, said Aphrodite contains between 3.6 and 6 trillion cubic feet of natural gas. That's below a 2011 estimate that estimated the size of the field at 5 to 8 trillion cubic feet. The field - being developed by US firm Noble Energy Inc and its Israeli partners Delek and Avner - lies around 150 kilometres off the island's southern coast.
Lakkotrypis said the prospects of additional gas finds inside Cypriot waters remained good, but a second appraisal well will be needed at Aphrodite for more exact estimates that may delay the facility's construction.
"The quantities are there. The main challenge is timing," Lakkotrypis said.
Charles Ellinas, the executive president of Cyprus National Hydrocarbons Co, said a second appraisal well could delay the start of construction of the gas facility by possibly a year.
Speed is essential for cash-strapped Cyprus, which saw its banking sector crushed under a financial rescue that it agreed in March with its euro area partners and the International Monetary Fund. In exchange for a 10 billion euros ($A14.61 billion) loan, uninsured depositors in the country's two largest banks were forced to take huge losses on their savings. The money was used to prop up largest lender Bank of Cyprus, while the smaller Laiki was wound down.
Cypriot officials have said that gas revenues remain a long way off and that the potential for future mineral wealth is no excuse for not following through with the economic reforms the country has to implement in exchange for its bailout loans.
But the authorities hope the allure of a gas bonanza can help restore confidence in a shaky economy and attract investment. The country is grappling with a 17 per cent jobless rate and will see its economy shrink by a cumulative 13 per cent this year and next.
Lakkotrypis said preliminary estimates show that Cyprus stands to gain a net profit of 12-18 billion euros over a period of 14 years just from the Aphrodite field.
Cyprus has also licensed France's Total and a consortium made up of Italy's ENI and South Korea's Kogas to search for offshore hydrocarbons in other 'blocks' or areas.
John Tomich, the head of Noble's Cyprus' operations, said seismic tests have yielded at least "half a dozen promising features" that may contain gas. Tomich said Noble is "very encouraged by the exploration potential" of the area for which it holds a gas exploration licence.