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Cyprus Problem | Conflict Jeopardises Island’s Energy Future

Espen Barth EideAccording to UN Special Adviser Espen Barth Eide, the Norwegian diplomat, who comes from a country known for its well-managed oil wealth, in the south’s case:

“There are not enormous quantities. It is significant but it is quite expensive to get hold of because it’s very deep so it requires expensive technology and you have to build many places because it’s compartmentalised, which means production and exploration costs are high, it will be a relatively expensive gas to produce.”

Eide said that as there was already a lot of natural gas on the global market and current prices were quite low since the advent of fracking “which means the margin isn’t very high”.  Any company looking at Cyprus would see political conflict and expensive gas ‘and not very much gas’ either. “I am not convinced they would say ‘let’s go for Cyprus’.”

“Statistically, any country that discovers hydrocarbons that can go either of two ways – the road to mismanagement and/or political conflict, or they can do it right, he said. Successful oil-rich countries were successful because they established clear rules and regulations and avoided political conflict. Cyprus is now exactly at the point where you have to choose between these two destinies. There is no middle ground. It will either take you into much more trouble and a little bit of income, or it will take you to a balanced politically viable solution or any other agreed solution, and more wealth.”

“I would think about how smart it is to perpetuate the conflict just as you’re moving into an oil and gas economy… it sounds harsh but I’m saying this thing will either get better soon or significantly worse because that’s what history tells us.”

It looks as if, like the north’s water project, that this is short term thinking which in the long run may bring few benefits to the island.

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1 comment to Cyprus Problem | Conflict Jeopardises Island’s Energy Future

  • cyprusishome

    An excellent piece that I am sure will be totally ignored by Cypriot politicians.
    No doubt they will seek funding from the EU because the price of oil is dropping rapidly to enable them to continue exploration.