Natural Gas

Cyprus Oil & Gas (O&G) Sector

The East Med - Cyprus, Israel, Lebanon and Egypt - potentially holds substantial hydrocarbon resources, with only about a third explored so far. Cyprus at the southeast corner of the EU, provides a collaborative link with all these countries. With initiatives from Cyprus already much is being done to promote regional cooperation and collaboration.

At the same time, Cyprus is planning exploitation of its own resources in what has become a much more competitive and interactive global energy and oil & gas market.

In the longer term, if Cyprus is to maximize its benefits from gas, it should retain flexibility in its export options so that it has access both to the Asian and European markets. In this context, development of an LNG plant at Vasilikos, on the south coast of the island, may be key to this.

However, Cyprus needs to proceed with further exploration to discover more resources and demonstrate that gas quantities justify such an option. Collaboration with Europe in the context of energy union and diversification of gas resources may offer another option and may be mutually beneficial.

With the prospect of negotiations on the resolution of the Cyprus problem making progress and oil prices expected to be on the way to recovery in 2016, Cyprus has decided to offer another licensing round. There is scope for this as only less than half of the declared offshore blocks are being explored. Solution of the Cyprus problem would also open up many O&G development opportunities.

Cyprus has ambitions to become a regional energy hub not only for its own gas exports but also for Israeli and Lebanese gas. This has the support of the EU. Cyprus, as a Member State of the EU, could serve as a conduit for gas flowing from the East Med to the EU. An East Med gas trading hub and energy corridor would allow the EU to achieve a greater degree of energy diversification and security. Cyprus also has a first class human resource. Investors in Cyprus can make good use of the expertise and people and it already has, educated and trained, ready to provide services in petroleum and associated industries. Cyprus is also a place where others come for training and to do business within the EU.
Cyprus has decided to proceed with a third licensing round for O&G exploration in the sea-blocks not yet explored
Planned LNG Export Plant at Vasilikos in Limassol, Cyprus
Source: Middle East Economic Survey

The East Med Natural Gas Landscape
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