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EastMed Pipeline, Offshore Gas Discovery Raises Cyprus Stakes

March 7, 2019

The discovery by the United States energy giant ExxonMobil of gas off the island of Cyprus, and the EastMed pipeline is making the country a lure for foreign companies even as Turkey warned it wants a bigger role in the licensing for drilling and a share of revenues for Turkish-Cypriots.

Stephen Blank, a Senior Fellow at the American Foreign Council, told the Cyprus Mail that the pipeline is a geopolitical necessity with Turkey having sent warships near the island’s Exclusive Economic Zone (EEZ) and Israel and Egypt in the mix for the growing energy hunt.

Blank said the ExxonMobil find could be a big source of revenue and makes Cyprus a key economic destination and strengthens its importance in the Middle East and Europe.

But, he said, unless diplomacy prevails in the wake of collapsed negotiations to reunify the island divided since an unlawful 1974 Turkish invasion that Turkey’s strong reactions to the drilling by foreign companies could be a catalyst in what happens next.

“On the one hand, this discovery is a great blessing. On the other hand, however, there are problems that will increase. “But in the final analysis, I think it is a positive development, because this discovery will lead to more foreign investment, which will not only be limited to the energy industry. And the great hope is that it will be able to create wider international interconnections that will work for the benefit of Cyprus,” he said.

He said the discovery will ramp up the interest which major energy companies have in the wider region.  “How fast will this be done depends on the markets themselves. Is there a demand for gas? Will this demand be high enough to justify research and investment? If, for example, market prices are very low or if there is a surplus supply of gas, then we will see fewer surveys.

“The new find in Cyprus certainly offers an additional incentive for further research, but only if such a move makes sense in economic terms,” he added.

Blank, who specializes in energy security issues, said in an interview with the Athens-Macedonian news agency Greece should seize the opportunity to put the country at the center of European energy integration.

He said Greece could be a bridge between the energy-rich countries of the Eastern Mediterranean and the central and eastern European countries participating in the Three Seas Initiative.

“With natural gas here (in the eastern Mediterranean) and the infrastructure there (in central eastern Europe), it makes sense for Greece to become a bridge between the countries of the south east Mediterranean and the Three Seas Initiative, as well as Europe and the US in creating the infrastructure that will direct gas from the Mediterranean to Europe,” he noted.

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