Cyprus News | Oil and Gas Price Falls Hits Cyprus Plans

Cyprus News | Oil and Gas Price Falls Hits Cyprus PlansThe French energy company Total looks set to abandon a search for oil and gas off Cyprus after failing to find evidence of reserves there. Total was one of 15 companies that participated in Cyprus’s second oil and gas licensing round in 2012. News of Total’s likely withdrawal comes after Italian-Korean energy consortium ENI-Kogas said its first test drill had come up dry. These events, along with the plummeting price of gas and oil, puts in question a South Cyprus revival based on gas and oil. Added to the south’s woes is the fact that Troika bailout money also seems to have dried up.

The south’s energy minister, Yiorgos Lakkotrypis, explained that:

“The company informed us some months ago that it was having difficulty finding any structures, targets, in the blocks it had a licence for… and they informed us last September they had not found any target to drill.”

The south has ambitions to become a hub for not only its own gas exports but also for Israeli and even Lebanese ones, but needs to find more gas reserves to make a land terminal financially viable. There are plans to build a liquefied natural gas plant at Vassiliko on the island’s southern coast but it now seems there are insufficient reserves to make that option feasible.

It now appears that the south is looking to Russia for help. According to the Cyprus Mail, Moscow’s ambassador to Cyprus, Stanislav Osadchiy, holds out hope that the Russians will be establishing a military base in the south. A cabinet decision in January 2014 allowed Russia access to the Andreas Papandreou military airbase in Paphos for humanitarian purposes and in emergency situations and there seems to be a Russian expectation that this will be developed into something more permanent.

The south seems to regularly seek out strong allies to rescue them, in 1974 and 2004 it cost them dearly.

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