Drilling permits were approved for blocks 2, 3, 9 and 11.

 

The decision follows a launch for tenders for a second licensing round that ended in May that covered 12 blocks, and Sylikiotis said nothing about the other eight except that decisions would be made "gradually."

 

US firm Noble Energy had already been awarded Block 12 and announced last year that it discovered gas reserves of up to eight trillion cubic feet (226.5 billion cubic metres), which has an estimated value of 100 billion euros ($129 billion).

 

This would satisfy the island's domestic gas needs for decades.

 

Sylikiotis said the government will now negotiate a deal with a partnership of Italy's ENI and South Korea's KOGAS for blocks 2 and 3.

 

He said terms will be discussed with a French-Russian tie-up involving Total ENP Activities and Novatec for block 9, while Total wants to exploit block 11 on its own.

Sylikiotis said these negotiations were expected to be completed next year.

 

"The reason we decided to go ahead with these four blocks is primarily to create economies of scale given the synergies that will arise to their proximity to block 12," Sylikiotis told reporters.

 

Media reports predict there could be greater riches, not only of gas but also of oil, in the adjacent blocks.

 

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.

 

Cyprus hopes its energy bonanza can eventually help pull it out of recession as it seeks an EU bailout.

 

Turkey has protested strongly against the Cypriot government's search for offshore oil and gas, branding it illegal and retaliating by beginning its own exploratory drilling in the breakaway north.

 

Cypriot President Demetris Christofias has said the island's offshore oil and gas search would carry on regardless of the hostile reaction from Ankara, and that any finds will be used for the benefit of all Cypriots.