Keynote speech by President of the Republic, Mr N. Anastasiades,
at the 7th Mediterranean Oil & Gas Forum 2016, in
Nicosia
Allow me first to sincerely thank the organisers, the Energy Stream
Oil and Gas Strategies, for the opportunity to deliver a keynote speech at the
7 th Mediterranean Oil & Gas Forum. It is indeed a great honour
to host once more this prestigious event in Cyprus, thus having the chance to
present our views and further discuss the opportunities and challenges on the
recent developments in the Eastern Mediterranean, a potential supplier of gas to
the regional markets, as well as to the EU.
The discovery of natural gas reserves in Cyprus’ Exclusive Economic
Zone (EEZ) is considered today to be an area of top priority for the Cypriot
Government. Not only because major energy developments are foreseen, but also
due to the fact that these developments are closely related to economic and
geopolitical matters that are equally important to us. Our main objective is the
optimal and sustainable development of the island’s hydrocarbon resources that
will benefit all Cypriots and future generations.
You are certainly aware that following the two licensing rounds
launched in 2007 and 2012, the Government of Cyprus has entered into six
Exploration and Production Sharing Contracts. As a result of the first
exploration well in Block 12, operator Noble Energy International Ltd announced
in December 2011 a significant natural gas discovery, the “Aphrodite” field. In
October 2013, Noble Energy also successfully drilled an appraisal well. The
latest independent resource assessment confirmed a mean gross natural gas
resource of 4.5 Tcf.
In June 2015, the Aphrodite gas field was declared commercial and,
shortly thereafter a Production Plan was submitted, which is currently discussed
with the view to agree with the Contractor the soonest.
At the same time, we are engaged into commercial discussions with
potential buyers. The “Aphrodite” field is in fact located at a privileged
offshore position, allowing for multiple export development scenarios, with a
regional pipeline option to Egypt and Cyprus seems to be commercially the most
viable option. As I said, there are a lot of other scenarios.
Another important positive development for the monetization of the
Aphrodite field is the agreement between Noble and BG, which was recently
approved by the Government. This development is of paramount importance which
brings new impetus to the monetization efforts of the Aphrodite field.
Regarding the other licensees in the EEZ of Cyprus, we are very
pleased that in January the consortium ENI/Kogas and the Government of Cyprus
have signed a two-year extension of the initial exploration phase for Blocks 2,
3 and 9.
In addition, Total –the licensee of Block 11- has entered into the
first two-year renewal of its Exploration License and it is anticipated that an
exploration well in Block 11 will be drilled by the end of the year. These
developments are extremely important. They reaffirm and advance Cyprus’ energy
prospects, during a period in which the international oil and gas industry is
experiencing challenging conditions.
ENI’s announcement of the world class gas “Zohr” discovery offshore
Egypt, confirms the important gas potential of the region, not only for
exploration purposes but for investments as well. As a consequence, we have
recently witnessed strong interest in the Blocks of Cyprus’ EEZ. Responding to
this call by the industry, the Council of Ministers decided in February to
launch a third licensing round for oil and gas exploration. Cyprus’ policy has
traditionally been based on regional cooperation and the establishment of good
and long lasting relationships with all of our neighbours. After all, economic
partnerships enhance political partnerships.
Cooperation in the hydrocarbons sector can feed into the political
relations between countries in the region, building the foundations for regional
stability and peace. The necessity for energy partnerships can ease tensions,
freeze or even terminate political conflicts. The reason for this is simple:
countries will need to maintain open channels of communication at the political
level, in order to be able to successfully cooperate in the energy sector.
To achieve our common goals, the regional cooperation we strive for
is of paramount importance. Beyond the countless bilateral meetings that have
been held, I note here the particular significance of the three high-level
trilateral meetings held so far between Cyprus, Egypt and Greece. The third
Trilateral Meeting between Cyprus, Egypt and Greece was held in Athens in
December 2015, with the “Athens Declaration” stating that all parties have
agreed to accelerate negotiations on the outstanding issues related to the
delimitation of our three counties’ adjacent maritime zones, according to the UN
Convention on the Law of the Sea.
On the 28th of January 2016, the first Trilateral Meeting
of the heads of state between Greece, Cyprus and Israel was hosted in Nicosia.
It was at that meeting and at the highest level that the three countries agreed
to strengthen cooperation in various fields of common interest, including the
establishment of a permanent ministerial committee in order to consider the
strategic and practical aspects of joint action in the field of energy
cooperation.
Additionally, on the 15th of February 2016, the Ministers
of Foreign Affairs of Cyprus, Greece and Lebanon held a trilateral meeting in
Brussels, with special emphasis on the cooperation for the promotion of
stability and security in the Eastern Mediterranean including energy
cooperation. I assure you that our aspirations to extend such high-level
meetings to include more countries in the region are well underway.
Crucially, Cyprus’ goals are in line with the EU's recent Energy
Union strategy, which has identified the Mediterranean as a strategic priority.
In fact, the EU has set the objective of boosting the energy partnership with
the Southern and Eastern Mediterranean countries as an option for reducing EU
dependency on particular fuels, energy suppliers and routes, inter alia by
exploring the potential for more gas imports from the Mediterranean.
In this respect, it is our strong belief that the Eastern
Mediterranean corridor can play an important role in the EU’s energy security.
Our aim remains to support the EU in its diversification efforts, with Cyprus,
as an EU member state, with a stable legal and political environment and
constituting a reliable partner for both neighbouring countries and oil and gas
companies.
In this context, my Government continues to advance its strategy for
the creation of a gas-corridor from the East-Med to Europe, by collaborating
with potential transit countries, such us Bulgaria, which I recently visited.
According to the regional market outlook, especially in the Southern and Eastern
Mediterranean, energy demand is expected to double by 2030, while electricity
demand is expected to triple. Moreover, Europe’s annual gas consumption could
partly be met by natural gas from the Eastern Mediterranean.
Cyprus, as I am certain most of you already know, is energy isolated,
with no electricity or gas interconnections linking our island with the EU
internal energy market. The establishment, therefore, of the necessary energy
infrastructure is a prerequisite not only to lift our country’s isolation, but
also for the promotion of regional cooperation through common projects. For this
purpose, the Republic of Cyprus is promoting three projects that were selected
by the European Commission as Projects of Common Interest (PCI’s).
The first project is the so called “Euro-Asia Interconnector”, an
electricity interconnection between Israel, Cyprus and Greece, supported by all
three Governments. The second is the gas pipeline project called “EastMed
Pipeline”, which will connect Cyprus to Europe via Greece. And the third aims at
“Removing internal bottlenecks in Cyprus to end isolation and to allow for the
transmission of gas from East Med”. In effect these projects, while lifting
Cyprus’ isolation, they will also constitute the means through which the Eastern
Mediterranean will be linked to the EU.
The overall volatile situation in the area, conflicts with regards to
the delimitation of maritime zones, the in stability in
Syria and the continuation of traditional animosities, are just some of the
issues that create uncertainties in our efforts to develop the region’s
hydrocarbons wealth. What is urgently required in most cases is to build trust
and this essentially translates to all parties respecting international law, as
well as the sovereignty and the sovereign rights of neighbouring countries.
In this extraordinary geopolitical equation, there are, of course,
certain constant parameters. The European energy need to search and find
alternative gas suppliers, the physical proximity of Europe to Eastern
Mediterranean and the necessity to stabilize and develop the area in order to
attract the required infrastructure investments, are strong factors that can
contribute towards the materialization of our vision for energy transnational
cooperation. This is precisely the goal to which Cyprus is committed.
Before concluding, I would like to say that the Minister of Energy,
Commerce, Industry and Tourism will be with you tomorrow and he will explain all
about the third round of licensing.
