Cyprus Natural Gas Reserves Developments
The Cypriot government mulled recently that its natural gas reserves, both the ones in the Aphrodite Sea block, as well as the series of other blocks to be explored, could be used to issue bonds in order to ease the country's debts.
According to all available information from Nicosia, the delegation from IMF-ECB and the EU Commission, had held talks with the director of energy affairs of the Cypriot Ministry of commerce, Solon Kassinis and discussed on the technical details of the production levels the Block 12 (Aphrodite block) could reach in the coming years. Moreover they touched upon the issue of the construction of LNG facilities and about the prospects the Cypriot government has on other reserves offshore.
Solon Kassinis thereafter made statements in the state radio channel RIK, where he laid down plans to use the gas reserves as a way under which they could pre-capitalize its gains through the issue of bonds, in order to rapidly and significantly decrease the country's deficit and public debt, so as, the country to escape harsh austerity measures to be implemented by IMF and the European counterparts. Cyprus was particularly hit by the global financial downturn, since its economy heavily relies on banking, shipping and tourism. The recent natural gas discoveries are seen in Cyprus as an ideal opportunity to diversify the structure of the economy more on energy-related sectors and at the same time make gains that may well save the country from bankruptcy.
Kasinis also added that in Block 12 there are around 210 billion cbm of natural gas which stands to be fully confirmed by March 2013 when a second exploration drill will take place by Noble Energy Moreover Nicosia and Tel Aviv cooperate strongly in exchanging technical details and data on the geological formation beneath their countries bordering exclusive economic zones, where Israel has also made large gas discoveries such as the one in Leviathan block.
The second rill according to the Cypriot Commerce and Energy Ministry, will reach up to 7 Kilometers in depth , whereas the first one reached at around 5 Km.
An interesting aspect is that geologists estimate 17% chance of finding oil as well, beneath the natural gas reserve, which will further increase its total value. The government expects and has relayed its views to the EU that by 2017-2018 full scale production should commence.
As far as the other four Sea blocks to be explored are concerned, Cyprus expects 200 million Euros as a signing bonus with the companies it is negotiating with and estimates that test drills will commence as early as 2014.
Lastly regarding the LNG terminal which has been prescribed as the best option for the use and export of gas, more than 6,000 jobs will be created and should there are positive findings in all Se blocks researched; Cyprus stands to have a booming economic path for the coming decades.
The Republic of Cyprus has an estimated GDP for 2012, around 25 billion USD, whilst Block 12 estimated monetary value is much more than the total turnover of the economy. Hence, Cyprus may well be the first country in the world that manages to escape the aftermath of 2008 global economic gloom by a natural gas discovery that came at the right place and at the right time.