New Energy Opportunities Dawn in Cyprus
24.02.2015 / Energyboardroom
When Texan independent E&P player Noble Energy unexpectedly uncovered substantial quantities of offshore natural gas deposits within Cyprus’ exclusive economic zone (EEZ) in late 2011, it set the scene for wild celebrations and marked a turning point in the history of a nation hitherto known more for its tourism, shipping and financial services. Three years later, the heady optimism shows little sign of relenting with many believing that the country’s hydrocarbons endowments will provide a speedy route back to economic prosperity following Cyprus’ banking meltdown and near bankruptcy last spring.
There can be absolutely no doubt that the discoveries will have a transformative impact on the local economy. A country that formerly relied on imported oil to cover 94 percent of its energy consumption requirements and nation once subjected to the EU’s highest electricity prices can now contemplate a future of energy autonomy and exports. In the words of Yiorgos Lakkotrypis, Cyprus’ energetic Minister of Energy, Commerce, Industry and Tourism, “natural gas discoveries deliver an entirely new dimension to the Cypriot economy affording a range of great opportunities over the short, medium and long term.”
“Initially we are witnessing significant investment from international E&P outfits, from independents such as Noble Energy to super-majors like Total, and equally from the types of firms that service the upstream segment of the gas value chain such as Schlumberger and Halliburton,” he explains. “Then, in the mid-term, the country will enjoy the revenues accrued from the sale of hydrocarbons on European and global markets. Finally, we should be able to develop a knowledge-based community specializing in oil and gas related services, which can continue to nourish the economy even after our reserves have been exhausted,” he asserts.
This is, however, unchartered territory for a nation formerly unfamiliar with the industry, and thus needs careful management. “We must not become sheikhs,” exclaims George Shammas, chairman of the Cyprus Energy Regulatory Authority, while unveiling his proposal for a sovereign wealth fund to recycle gas revenues into sustainable, equitable human-centered development. “What we are doing today in the hydrocarbons sphere should be for future generations and provide the foundation for the next cycle of the island’s economic growth, rather than regarded as shortcut to solve problems of the past,” counsels Evgenios Evgeniou, CEO of PwC in Cyprus.
A new report from EnergyBoardroom, available today for free download, looks at the challenges and opportunities for Europe’s newest oil and gas producer, and investigates what the future holds in store for Cyprus.
Yiorgos Lakkotrypis, Minister of Energy, Commerce, Industry and Tourism
Toula Onoufriou, president, Cyprus Hydrocarbons Company (CHC)
George Papanastasiou, general manager, VTT Vasiliko storage terminal
Evgenios Evgeniou, CEO, PwC Cyprus
Angelos Gregoriades, chairman and head of tax, KPMG Cyprus
Stavros Pantzaris, country assurance leader, oil & gas leader, EY Cyprus
Solon Kassinis, managing director, Kassinis International Consulting
Nicos Papakyriacou, partner and oil and gas leader, Deloitte Cyprus
Marios Patsalides, CEO, J&P Energy & Industrial Projects
Christodoulos E. Angastiniotis, chairman, Cyprus Investment Promotion Agency (CIPA)