CYPRUS POISED TO DRILL FOR OIL
By Philippos Stylianou
FOUR years after the strong likelihood of rich off-shore gas and oil reserves lying at the seabed of Cyprus was first reported in the Cyprus Weekly, the country is poised to start drilling for its mineral wealth.
Commerce and Industry Minister Giorgos Lillikas told a recent oil seminar in Nicosia that Cyprus would soon be signing an agreement with neighbouring Egypt, already an oil-producing country, for joint exploitation of fuel reserves that could overlap the delimitation line of their respective economic zones.
Unconfirmed reports said the signing of the agreement might coincide with a visit of President Papadopoulos to Cairo.
Seminar organiser, Cyprus EuroMP Yiannakis Matsis, said in his address that the Cyprus Government was preparing new legislation, soon to be tabled before parliament, which would provide the legal framework for the exploration and exploitation of fossil fuel.
The joint venture agreement has been worked out at the request of Egypt and, according to reliable information, consensus has already been reached regarding the distance on either side of the delimitation line where common wells will be drilled.
Delimited
The two countries, both parties to the UN Law of the Sea Convention and situated 380km apart, have delimited their economic zones accordingly in the middle, while last July they signed a Memorandum of Understanding for the supply of Liquefied Natural Gas (LNG) to Cyprus, which also paved the way for off-shore joint ventures.
Lillikas stressed that the Cyprus Government will not heed "certain voices" which advocate involving a particular neighbour country in the exploitation of the island’s possible oil and gas reserves.
"This issue has to do with our sovereign rights and we think that the involvement of any third country would not be such a good idea," he said, hinting clearly at his predecessor Nikos Rolandis, who in press articles has advanced the view that Turkey should be brought into the oil/gas affair along the lines of the Annan plan.
"The Annan Plan has been rejected by the people and the Cyprus Government has no intention of implementing it unilaterally," The Minister added.
Underlining Cyprus’ "traditionally excellent relations with all of the oil-producing countries, stretching from the Caucasus to the Persian Gulf," Lillikas said the Republic of Cyprus was willing to play an important role both in their political stability and in their approach to the European Union.
Key speaker
The key speaker at the seminar, French ex-Minister EuroMP Jacques Toubon, who is also Vice-President of the Mixed EU-Turkey Inter-parliamentary Committee, fully backed the Cyprus position.
Replying to a question from the audience on how to avoid potential energy arrangements clashing with the future implementation of the Annan plan, Toubon said that since that solution had been rejected, the framework for a Cyprus energy policy should be defined in terms of regional cooperation along the lines suggested by Lillikas.
Another of the invited speakers, Ministry of Commerce and Industry Energy Director Solon Kasinis in an intervention suggested that working with Turkey would not be so easy even for simple matters.
He said that during the discussions on the Annan Plan the Ministry had proposed for both communities to maintain the same quality standards for fuel, but the Turkish side had rejected this.
Invited to say if the chances of discovering economically exploitable energy reserves were favourable for Cyprus, French energy expert Lucien Montader, Vice-President of Beicip Franlap-French Petroleum Institute, said that the present conditions were suitable to launch off-shore exploration and that oil companies were now ready to take risks.
Successful
He noted that successful drills close to Cyprus by Egypt gave hope that the former might also have its share of mineral riches in the area, but said that additional research was necessary before embarking on any expedition.
"It is not enough to find energy reserves, they have to be exploitable as well," Montader said, adding that the depth of the Cyprus seabed was one of the largest, making drilling very expensive.
However, according to expert views published earlier in the Cyprus Weekly, spiraling oil prices have made drilling costs less of a consideration. Bore holes in the Gulf of Mexico recently went 3,500 m down, compared to 2,000-3,000 needed for off-shore drilling in Cyprus Waters.
Undersea
Besides, the undersea elevation known as ‘Eratosthenes Mount’ lies only about 700m deep inside the Cyprus Economic zone. Asked about the prospects for energy reserves here, Montader said the rock formation of ‘Eratosthenes Mount’ was very hard and the right spots for drilling had to be located.
Yiannakis Matsis said that a likely existence of oil and gas reserves within the maritime economic zone of Cyprus would change dramatically the economic and political scene of the entire region, enhancing Cyprus’ role within and outside the EU.
He also stressed that such development would constitute a motive for the Turkish Cypriots to contribute in a positive way to a European solution of the Cyprus problem.
CYPRUS BID FOR EU REGIONAL ENERGY CENTRE
The Nicosia seminar under the title "Cyprus at the Crossroads of Oil Resources" highlighted the island’s potential role as a regional energy centre of the EU.
MEP Yiannakis Matsis, Member of the European People’s Party-European Democrats and Member of the EU Parliament’s Regional Development Committee, presented the proposal involving the use of Cyprus as an oil transport and storage centre, as well as a training centre for ministerial officers on legislative issues of energy.
His colleague and member of the EU Internal Market and Consumer Protection Committee French MEP Jacques Toubon embraced the proposal, while at the same time stressing the need of formulating a concrete European policy on energy.
Commerce and Industry Minister Giorgos Lillikas, competent also for energy, signaled the support of the Cyprus Government to such initiatives.
He said that work would be starting soon on the creation of an energy centre at Vassiliko on the island’s southern coast, enhancing considerably Cyprus’ potential as a pivotal centre for the transport and distribution of oil products.
Lillikas also said that turning Cyprus into a Regional Research Centre could provide the EU with a connecting link to the oil producing countries on matters of research and technology, as well as for harmonizing their legislation with that of the European Union.
The Minister called on the EU to actively support the setting up of such regional centres in Cyprus, saying that they would contribute to closer relations of the countries of the regions with the EU.
Asked by the Cyprus Weekly how realistic he found the proposals, Jacques Toubon said that Cyprus was ideally located for such a role and had a very capable Minister, but noted that a lot of money would be needed for the ideas to materialize.
In his mesmerizing speech, Toubon repeatedly warned that unless drastic measures were taken now to conserve energy and protect the environment, humanity would experience an energy famine by the year 2030-2040.
Will we be rich soon?
