CYPRUS has already taken a decision for a Liquefied Natural Gas (LNG) terminal, Minister of Commerce Industry and Tourism Neoclis Sylikiotis said on Thursday, adding there is big interest by large international organizations to participate in this project.
Addressing the Cyprus Natural Gas Conference, Sylikiotis also said that the government will finalise in the coming weeks the State Hydrocarbons Company, the body that will represent the government in all future negotiations concerning natural gas issues.
Cyprus, he noted, is in a critical turning point with regard to the developments at home and internationally in the energy sector. “We have a clear picture of the developments being shaped, we know where we want to go and we proceed cautiously, but steadily towards our goal,” he said.
Last December Houston based Noble Energy, which has a concession for exploratory drilling in Cyprus’ block 12, announced that initial data that emerged from exploratory drilling and the evaluation checks carried out indicate the existence of a natural gas reservoir ranging from 5 to 8 trillion cubic feet (tcf) with a gross mean of 7 tcf.
Cyprus received 25 bids from companies and international joint ventures in the second licensing round for the island’s remaining 12 offshore blocks that took place on May 11.
State Controlled Company.
Says it all.
When does anyone actually think there will be a pipe delivering natural gas to their home in Cyprus?
I’ll open the betting at 10 years from now.
AND …… ???
I really do hope the Government gets it together and negotiates a good deal for Cyprus and it’s people.
BUT I don’t think that will happen! Call me cynical but I would guess it may go down the line of … Lets award a Russian gas company the contract to extract and process the trillions of cubic feet of gas reportable there. This will of course go a long way to paying off the massive loan the Government currently has from the Russians…. Then we have the potential of the Chinese investment? May be they too should get a part of the extraction and processing contracts, this could swing the loan Cyprus’s way that they are currently trying to negotiate.
So where does this leave the good people of Cyprus? Oh maybe they will get a few jobs out of it. Construction and it’s already well in firms will get contracts to build plants etc. Many eastern Europeans will get work (Oh I forgot what about the Cypriot people also looking for work?) Of course they will not have the skills, so that’s why the foreign labour. But the government of Cyprus will of course get a good deal for itself and the top men running each contract.
As another person has already said, they do not have the skill or experience to deal with these time served hardened contract negotiators. But let’s look at it sensibly. The British do, we after all run, explore and manage huge oil/gas field’s in the north sea and world wide. But I do wonder if any one of them will be invited to advise??? I bet not because we, as a nation, will not lend the Cypriot government any money, but we could save them a whole lot of embarrassment many years down the line.
Does the pattern sound familiar? Short term profit for the few but no real long term plan for the people.
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Would it not be better to wait till Noble actually complete there drilling program to see if it is viable ?
@Mike – In my previous life I was involved with a number of government contracts around the world. In one case I was managing a large contract on behalf of a UK government department as a contractor.
In my experience, civil servants are not as commercially astute as they should be – particularly when it comes to negotiating and managing multi-million pound/dollar/euro contracts.
Some years ago there was a great furore in the UK over the amount of money being paid to the company running the National Lottery – and it was being slated in the press. Its contract had been negotiated with the civil service and the amount it was being paid had been written into that contract based on the number of ticket sales. Need I say more.
Commercial companies can usually run rings around civil servants and negotiate good deals for themselves, be they from Cyprus or anywhere else.
As much as I am pleased with the news of the possibility of hydrocarbon wealth which may result in a benefit to the state treasury even the remote possibility that some may even trickle down to the people, I cannot reconcile the fact that any state on discovering oil / gas, run by committee (government) has in fact squandered its possible wealth on financing deficits, financing benefit handouts, and generally losing all benefit of the finds to those operators undertaking the exploration and production. With of course the exception of states run autocratically, where much of the wealth is utilised by an autocratic ruler to fund lavish lifestyles and pet infrastructure projects with a small percentage going to the people but who none the less benefit from the infrastructure.
I just cannot see, given the historical evidence before me, that Cyprus will have the foresight or commercial ability to write the contracts necessary to ensure it retains a fair percentage of any wealth created. The oil companies are past masters of the art of money making and selfish self interest – after all they are in it for the cash not as a charity I guess.
Will we have the abilities required I wonder, only time will tell. Fingers (and toes) crossed that it all works out because if not the excuses and blame game will keep politicians employed for more decades than the Cyprob has.