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XOM, QatarEnergy Reach Milestone in Cyprus Offshore Gas Development
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Key Takeaways
XOM and QatarEnergy signed a Cyprus deal affirming Glaucus and Pegasus discoveries as marketable.
Cyprus says the offshore fields could hold 8-9 Tcf of gas, with FID expected by 2029.
XOM expects first production by 2033 if the project proceeds as planned after appraisal and FEED.
Exxon Mobil Corporation (XOM - Free Report) , a U.S.-based energy giant, and QatarEnergy have signed a deal with Cyprus affirming the prospects of two offshore natural gas discoveries as marketable, implying that these resources are large enough to be commercially developed. Per a Reuters report, the Declaration of Marketability was signed in Nicosia and is considered a significant milestone for Cyprus, as it facilitates the project's development. For Cyprus, this is a major step forward in its efforts to advance offshore gas discoveries into producing fields.
Project Progresses Toward FEED and Final Investment Decision
The gas discoveries are located in two offshore blocks in the Glaucus and Pegasus gas fields. Cyprus has mentioned that the two discoveries could contain combined resources of approximately 8-9 trillion cubic feet (Tcf) of gas.This project is central to the country’s ambitions of establishing the Eastern Mediterranean as a reliable gas supplier to Europe.
ExxonMobil has stated that a final investment decision for the project is expected by 2029 and that, if the project proceeds according to plan, first production is expected by 2033. However, the report mentioned that the companies will first conduct additional drilling on the offshore fields to better understand their size and properties before progressing to the front-end engineering and design (FEED) phase.
Egypt's Existing Infrastructure to Support Commercialization
In May 2026, QatarEnergy signed a preliminary agreement with XOM and the government of Egypt to study the commercialization of gas resources discovered in Cyprus via Egypt's existing natural gas and liquefied natural gas (LNG) facilities. The agreement was intended to help the companies and the Egyptian government understand how Egypt's existing gas infrastructure could be utilized to develop Cyprus’ natural gas resources and evaluate related business and growth opportunities. The agreement could also help the companies to utilize existing resources optimally to support increasing gas needs in domestic and international markets.
ExxonMobil has stated that natural gas from the Pegasus and Glaucus fields would most likely be transported to Egypt through a pipeline tie-back, thereby utilizing existing infrastructure and making the development cost-efficient. A similar approach is also being considered for other gas discoveries in Cypriot waters. The Aphrodite gas field, operated by Chevron, contains an estimated 3.5-4.5 Tcf of natural gas, while the Cronos gas field, operated by Eni and TotalEnergies, contains more than 3 Tcf of gas. Both fields may also be connected to Egypt's gas and LNG infrastructure through similar pipeline tie-backs, which could utilize the country's spare operating capacity.
Strategic Importance for Cyprus and Europe's Energy Security
The agreement marks a significant step toward unlocking Cyprus' offshore natural gas potential and enhancing the Eastern Mediterranean region’s potential to become an alternative gas supplier to Europe. The project is expected to provide a reliable source of natural gas for the continent, supporting the region's efforts to diversify energy supplies and enhance Europe’s long-term energy security.
Cenovus Energy Inc. is a Canadian integrated energy company with operations spanning the upstream, midstream and downstream sectors. The company is involved in exploration and production from its low-cost oil sands and heavy oil assets in Canada. The strategic MEG Energy acquisition is expected to boost Cenovus Energy's production levels in 2026.
Par Pacific Holdings is a Houston-based refining player with a combined refining capacity of 219,000 barrels per day, and operations spread across Hawaii, the Pacific Northwest and the Rockies. The company also operates 76 branded retail locations along with a logistics business segment.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.
View the Zacks #1 Rank List
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XOM, QatarEnergy Reach Milestone in Cyprus Offshore Gas Development
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) , a U.S.-based energy giant, and QatarEnergy have signed a deal with Cyprus affirming the prospects of two offshore natural gas discoveries as marketable, implying that these resources are large enough to be commercially developed. Per a Reuters report, the Declaration of Marketability was signed in Nicosia and is considered a significant milestone for Cyprus, as it facilitates the project's development. For Cyprus, this is a major step forward in its efforts to advance offshore gas discoveries into producing fields.
Project Progresses Toward FEED and Final Investment Decision
The gas discoveries are located in two offshore blocks in the Glaucus and Pegasus gas fields. Cyprus has mentioned that the two discoveries could contain combined resources of approximately 8-9 trillion cubic feet (Tcf) of gas.This project is central to the country’s ambitions of establishing the Eastern Mediterranean as a reliable gas supplier to Europe.
ExxonMobil has stated that a final investment decision for the project is expected by 2029 and that, if the project proceeds according to plan, first production is expected by 2033. However, the report mentioned that the companies will first conduct additional drilling on the offshore fields to better understand their size and properties before progressing to the front-end engineering and design (FEED) phase.
Egypt's Existing Infrastructure to Support Commercialization
In May 2026, QatarEnergy signed a preliminary agreement with XOM and the government of Egypt to study the commercialization of gas resources discovered in Cyprus via Egypt's existing natural gas and liquefied natural gas (LNG) facilities. The agreement was intended to help the companies and the Egyptian government understand how Egypt's existing gas infrastructure could be utilized to develop Cyprus’ natural gas resources and evaluate related business and growth opportunities. The agreement could also help the companies to utilize existing resources optimally to support increasing gas needs in domestic and international markets.
ExxonMobil has stated that natural gas from the Pegasus and Glaucus fields would most likely be transported to Egypt through a pipeline tie-back, thereby utilizing existing infrastructure and making the development cost-efficient. A similar approach is also being considered for other gas discoveries in Cypriot waters. The Aphrodite gas field, operated by Chevron, contains an estimated 3.5-4.5 Tcf of natural gas, while the Cronos gas field, operated by Eni and TotalEnergies, contains more than 3 Tcf of gas. Both fields may also be connected to Egypt's gas and LNG infrastructure through similar pipeline tie-backs, which could utilize the country's spare operating capacity.
Strategic Importance for Cyprus and Europe's Energy Security
The agreement marks a significant step toward unlocking Cyprus' offshore natural gas potential and enhancing the Eastern Mediterranean region’s potential to become an alternative gas supplier to Europe. The project is expected to provide a reliable source of natural gas for the continent, supporting the region's efforts to diversify energy supplies and enhance Europe’s long-term energy security.
XOM’s Zacks Rank and Key Picks
XOM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Cenovus Energy (CVE - Free Report) , Par Pacific Holdings (PARR - Free Report) and FuelCell Energy (FCEL - Free Report) . While Cenovus Energy sports a Zacks Rank #1 (Strong Buy), Par Pacific and FuelCell Energy each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
Cenovus Energy Inc. is a Canadian integrated energy company with operations spanning the upstream, midstream and downstream sectors. The company is involved in exploration and production from its low-cost oil sands and heavy oil assets in Canada. The strategic MEG Energy acquisition is expected to boost Cenovus Energy's production levels in 2026.
Par Pacific Holdings is a Houston-based refining player with a combined refining capacity of 219,000 barrels per day, and operations spread across Hawaii, the Pacific Northwest and the Rockies. The company also operates 76 branded retail locations along with a logistics business segment.
FuelCell Energy is a clean energy company that offers scalable, reliable, low-carbon power solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company’s proprietary molten carbonate fuel cell systems generate electricity through an electrochemical process instead of burning fuel, reducing carbon emissions and minimizing the environmental impact of power generation. FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.