The Strategist

Cyprus to Join Gas Players League

06/08/2015 - 16:06

The publication notes that this is the first official announcement of the discovery of commercial reserves on the continental shelf of Cyprus, after a consortium of Eni / Kogas and Total of France, previously working on blocks 10 and 11, declared their coagulation due to lack of results.

4ing via flickr
4ing via flickr
US-Israeli consortium must now submit to the Government of Cyprus for approval development plan and implementation of produced gas.

In the most general terms, gas processing from the field is expected to be passed and partially stored on the floating installation with capacity of 8 billion cubic meters of gas per year. Some of the gas will be used for the needs of the economy and the public sector of Cyprus, part - for export to Egypt through the underwater pipeline. According to the companies working in the country for the construction of an LNG plant with a view to export to Europe and Asia, Cyprus is necessary to build up reserves of gas.

The main problem of Cyprus is not in the field to find hydrocarbon reserves but to negotiate directly with Turkey and Greece. Therefore, among the main causes of delays in the development of production in these fields, the first place goes to the uncertainty of the territorial jurisdiction of a number of sectors, which will definitely compound the gas problem.

The question of the status of Northern Cyprus remains the main stumbling block between the three Mediterranean States. In 1974, Turkey, under the pretext of protection of the Turkish population, which is several times less than the number of ethnic Greek Cypriots, annexed 30% of the island and established the Turkish Republic of Northern Cyprus (TRNC). The international community refuses to recognize the Turkish Republic and the official Nicosia continues to consider the formation as an occupied territory. Turkish authorities have repeatedly offered Nicosia to settle territorial disputes and recognize the TRNC in exchange for building a gas pipeline between the island and Turkey to ensure the supply of hydrocarbons, but Nicosia officials declined.

The prospect of Cyprus gas is attractive not only for the island, but also for Europe as a whole. With a positive scenario, the situation of Cyprus gas can replace such current sources of natural gas, as Russia and North Africa.

Today, 35% of European gas supplies come from Russia. But, despite of this, in recent years, Europe has declared desire to find alternatives and the revision of gas prices. However, Russia is not frightened and it is ready to negotiate, because they do not want to lose their market share.

Nikos Anastasiadis, President of Cyprus, called on Russian companies to pay attention to the prospects in case the treasure is found in the coastal waters of Cyprus:

- My government will provide all the help if you show an interest.

But while the President tries to draw Russians, Chinese do not need an invitation. Since it became known that China National Offshore Oil corporation is ready to invest in the Aphrodite block 12 development. In addition, Chinese investors have expressed the desire to purchase the government bonds of Cyprus in the amount of 500 mln. euros.