9th Mediterranean Oil & Gas Forum 2018

28 Μάρ 2018

Keynote by the Democratic Rally President Mr. Averof Neophytou 9th Mediterranean Oil & Gas Forum 2018
Wednesday, 28th March 2018, Nicosia, 9:00 a.m.

Ladies and Gentlemen,

It is a great honor to be addressing the 9th Mediterranean Oil and Gas Forum.

This prestigious Forum is taking place in a region that has never been a stranger to tensions and geopolitical risks. Energy resources around the world have been either a source of cooperation, economic growth and investment or a source of conflict, instability and uncertainty.

We share with the European Union, the United States and the international community the same vision for the region. The energy perspective of the Eastern Mediterranean region should be seen as a vehicle of regional stability, security, and greater regional cooperation. At the same time we also see it as a means of contributing to the EU energy policy of diversification of routes and sources.

The significant quantities of hydrocarbons discovered in the region of the Eastern Mediterranean create conditions for potential wider interest convergences among all the countries in the region.

We have witnessed how energy could indeed be a catalyst for economic cooperation. The deepening of relations between the region with close cooperation agreements signed and relations strengthening by the high-level trilateral meetings held so far between Cyprus, Egypt and Greece resulting in the Nicosia and Athens Declarations. These are agreements that further economic cooperation and provide the necessary framework to explore the option of regional exports of Cypriot natural gas and a potential base of investments.

Cyprus can indeed become this reliable and credible pillar of political, energy and economic cooperation in the Eastern Mediterranean. We are determined to use the natural gas deposits discovered in Cyprus as a source of regional economic cooperation, development and integration.

Dear Friends,

The prospects that further economic cooperation in the region will bring can be of paramount importance. The discoveries of natural gas reserves in the South Eastern Mediterranean can in their totality cover the regional energy needs. Further, the region’s potential to become a future gas supplier to both Europe and Asia, given its strategic location near the European market and the Suez Canal, is a valid one.

The demonstrated important natural resource potential of the region with significant quantities discovered in Cyprus, Egypt and Israel and especially the discovery of Zorh, attract further interest and strengthen this potential.

The results of the 3rd licensing round for offshore exploration in the Exclusive Economic Zone (EEZ) of Cyprus are telling of the increased interest after Zohr. ExxonMobil signed an Exploration and Production Sharing Contract for Block 10 of our EEZ, as they expand their international upstream footprint into the Eastern Mediterranean region for the first time.

With the first exploration drill by ExonnMobil planned in October 2018, the surveying ships of ExonnMobil are already here and the preparations for the first drill are underway.

The Onisiphoros well drilling in Block 11 while not commercial, it verified the geological model of Zohr like structure. The Calypso well in Block 6 with gas column discovery of excellent characteristics also confirmed the extension of the “zohr like” structure in the Cyprus EEZ strengthening the potential of the region.

Dear Friends,

The Forum takes place at a time of escalated Turkish provocations in the Exclusive Economic Zone of the Republic of Cyprus.

Turkey’s proclamations to be acting in the interests of the Turkish Cypriots, is just an excuse. The issue of natural resource revenues has already been agreed in the negotiations as a matter of the federal government in a unified Cyprus. Moreover, the bill for establishing a Sovereign Fund for the proceeds from natural resources is currently being vetted in the Committee of Financial Affairs of the House of Representatives. The Sovereign Fund is modeled after the Norwegian example and global best practices and guarantees that the wealth from natural resources will benefit current and future generations of all Cypriots.

As we all know very well, discovering resources is one thing, ripping the economic benefits is quite another. ENI’s fast commercialization in Zohr is the exception rather than the rule. Usually it takes 5 to 10 years to be able to have revenues from such discoveries. With good will, we do not need 5 to 10 years to solve the Cyprus issue.

I believe Turkey is acting with only its own interests in mind. Through the resources of the Eastern Mediterranean, Turkey wants to eliminate its energy dependency on Russia. At the same time, Turkey wants to become an energy hub connected to Europe via pipelines it controls in order to make Europe depended on Turkey.

The European Union and the US have maintained a principled position of support to the sovereign rights of Cyprus to explore and exploit its natural resources.

Cyprus continues its energy program as further natural gas discoveries will bring us closer to our strategic priority of building a liquefaction plant. This option is preferred versus pipelines as they depend on regional stability. Even if the quantities already discovered do not viably support a liquefaction plant yet, we are confident that with new discoveries of natural gas deposits a liquefaction plant will be viable to operate.

This will give us the ability to export liquefied gas to a regasification plant located in Alexandroupolis, Greece and from there on to the Balkans, further diversifying energy sources for Europe. It could also be exported to regions of Asia that would need LNG as a fuel.

Natural gas could also be exported by a pipeline to LNG plants that already exist in Egypt. Cyprus and Egypt have already agreed for a natural gas pipeline from Aphrodite to these plants. The final agreement has been sent to the European Commission for their comments. At the same time, discussions for sales contracts from Aphrodite are quite advanced.

In addition, the EuroAsia Interconnector, the underwater electric cable connection linking the electrical systems of Israel, Cyprus and Greece (with a capacity of 2000 MW) will also allow the export of energy produced in Cyprus as a final product. This could potentially be an energy bridge from Asia to Europe, forming an alternative corridor for securely supplying electricity to the European Union produced by the gas reserves in Cyprus and Israel.

Further, the Eastern Mediterranean corridor potential to play an important role in the EU’s energy security, and the East Med pipeline, if proven technically and economically viable, could serve towards the European Council’s conclusions for developing indigenous EU resources and diversifying supply sources and routes, enhancing the EU’s security of supply.

In my personal opinion, when a comprehensive settlement of the Cyprus problem is reached, I would not exclude a pipeline for selling natural gas to Turkey at commercial terms.

Dear Friends,

The geopolitical changes around us are a potential security catalyst on multiple levels. Challenges aside, the estimated economic benefits provide substantial incentives for regional cooperation in the field of energy that could be a win-win for all parties involved.

The ultimate goal is hydrocarbons to serve as a means to bring prosperity to all Cypriots.

Dear hosts,

Once more I would like to thank you for the honor to speak at this prestigious forum and wish you every success in your proceedings.

I am looking forward to a fruitful discussion.