Greek Cyprus weighs options in expected natural gas income

October 20, 2011, Thursday/ 14:55:00

Although the Greek Cypriot exploratory drilling for hydrocarbon sources off the coast of Cyprus has yet to yield results that would confirm the existence of the speculated large reserves, Greek Cyprus has already taken up plans to create the infrastructure to handle the resource income.

In the event that the initial results from the drilling turn out to be positive, Greek Cyprus still has a long way to go before it can put that natural gas on the market, Greek Cypriot Energy Minister Praxoula Antoniadou told Reuters in an interview on Wednesday.

The results, Reuters reported, were due to come in around December and expected by the Greek Cypriot administration to prove that Cyprus is indeed home to some of the richest pockets of energy reserves in the eastern Mediterranean -- as well as the fact that the rift between Turkey and the country over the drilling activities was not in vain.

"We are talking about the medium and long term -- a very minimum of three years before anything can materialize with reference to supplying the local market and many more years before we could be exporting," she told the agency on the sidelines of an economic conference.

Antoniadou made similar remarks a few weeks ago when she suggested that Turkey did not need to worry about financial activities being pursued before reunification negotiations on the island were settled between Turkish and Greek communities of the island. Turkey categorically rejects Greek Cypriot drilling for seabed resources, saying that any wealth belonging to the island belongs to both the Turkish and Greek communities.

The first round of licenses Greek Cyprus issued to US-based Noble Energy over the summer was the main reason behind Turkey's anger and led it to accuse the country of abusing Turkish Cypriot rights and to retaliate by setting up its own arrangements with the Turkish Republic of Northern Cyprus (KKTC) in late September to conduct its own exploratory drilling. The reciprocation, however, was brushed off by Greek Cyprus and the country is currently planning to hold a second offshore licensing round before the end of the year, Reuters said.

Antoniadou also mentioned in the interview the need for a “sovereign wealth fund” to place the wealth expected to be drawn from the resources, and the systems in Qatar and Norway were examples Greek Cyprus was looking into as options. "It has to be a model that guarantees the future of generations to come but also respects current generations as well," she noted, but cautioned that Greek Cyprus had to “take things in steps” and avoid extreme reactions.

Greek Cyprus has been battling an economic bottleneck somewhat in relation to Greek economic turbulence, since its banks were heavily exposed to Greece, Reuters noted. On top of the general eurozone problems, Greek Cyprus also received a heavy blow when its major power plant went down in an explosion of a munitions dump, which also resulted in casualties and the resignations of a number of Greek Cypriot ministers.

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