From economic crisis to domestic turmoil and international disputes, many recent events in the eastern Mediterranean nations have been alarming.
But now there’s good news, with the potential of reviving economies and resolving long-standing disputes throughout the region, while bolstering European energy supplies and advancing American policy goals.
During my visit to the United States this week, I will be appealing to members of Congress, thought leaders and private companies to invest in Cyprus’ energy future. With US companies such as Noble Energy and Halliburton now on the scene in Cyprus, our country is asking not for foreign aid but for American know-how in infrastructure development as well as in extracting, storing, transporting and marketing natural gas.
In a region with such stark differences, what’s striking is the extent to which our energy resources are already acting as a catalyst for regional cooperation. Congressional support can help advance that effort and bring our neighboring hydrocarbon-producing countries on board in mutually advantageous efforts to exploit their energy resources.
Cyprus has been contributing to the stability of the region by reaching out to neighboring nations, seeking opportunities not only for maritime boundary agreements in the hydrocarbon-rich eastern Mediterranean but also joint efforts for exploiting these resources. In particular, Cyprus has already signed agreements on delineating its Exclusive Economic Zone with Egypt, Lebanon and Israel on the basis of the median line principle. Moreover, Cyprus signed a framework agreement with Egypt concerning the development of cross-boundary hydrocarbon resources. Our countries are now negotiating a detailed agreement about this. In the same vein, Cyprus is in advanced negotiations with Israel for an agreement on the joint development and exploitation of cross-boundary reservoirs and has also proposed to negotiate a similar agreement with Lebanon.
Here’s the background: In December 2011, Houston-based Noble Energy announced a major natural gas find of 5 trillion to 8 trillion cubic feet about 100 miles off the coast of Cyprus in an area of exploration known as Block 12, which is part of the Exclusive Economic Zone of Cyprus. Moreover, three international energy companies have been licensed early this year for hydrocarbon exploration activities in five additional blocks. The French oil company Total SA and the consortium of Italy’s Eni and South Korea’s Kogas are currently undergoing geophysical surveys and geological studies, expecting to initiate drilling operations for exploration wells in the next two years.
In this context, Cyprus and the licensed international energy companies are proceeding with the planned development and exploitation of this natural gas discovery, including the construction of a liquefied natural gas (LNG) terminal on the south coast of the island. This project is expected to be completed by 2019-2020 and can have a transformative effect on the Eastern Mediterranean region.
As Cyprus becomes a regional energy hub — and a net exporter of fuel supplies rather than an importer — the nation’s economy will receive a large-scale and much-needed boost.
The development of natural gas will increase employment, attract investment and promote research and development in the energy sector. In addition, developing these huge gas reserves will reduce electricity prices in the local market, enhance our country’s revenue base, and create new opportunities in the natural gas value chain.
Even more importantly, these discoveries offer opportunities for creating stability and promoting cooperation in a region that historically has been sensitive and volatile.
Cyprus, Israel and Greece recently signed a memorandum of understanding on cooperation in energy and water. The three countries are also discussing a project for electricity interconnection. With this project, an underwater electricity cable will link Israel, Cyprus and Greece with the pan-European electricity grid. The project is a private initiative supported by these three countries, as well as by the European Commission.
For the European Union, natural gas from Cyprus — the only EU member in the region — can further promote the twin goals of diversifying energy sources and suppliers. By providing a new and flexible energy stream, Cyprus can contribute to Europe’s energy supplies and security purposes that the United States shares with its western allies, while being a more environmentally-friendly source of energy.
With its know-how and diplomatic support, the United States can help Cyprus to transform the eastern Mediterranean from a source of international instability to a supplier of environmentally friendly and economically sustainable energy.
Yiorgos Lakkotrypis is the minister of Energy, Commerce, Industry and Tourism of the Republic of Cyprus.