EDITORIAL: CAN CYPRUS PLAY THE OIL GAME?

Financial Mirror, Cyprus
Feb 21 2007

Now that the whole ‘striking oil’ fuss has died down and the experts
prepare to begin their preliminary work to see if there are any
sizeable natural gas or oil reserves, let alone if it is worth to
dig costly deepwater wells and pump the crude out, our politicians
should decide which game they want to play.

Playing with oil is like playing with fire, literally speaking.

Turkey has already made its hostile intentions well known, not just to
us, but to all countries that might operate potential oil exploration
companies.

Cyprus has no navy to protect its waters or its offshore resources and
Greece will not come to our aid as the government in Athens already
has its hands full with threats from Turkey of further conflicts and
minor skirmishes in the Aegean.

Turkey will continue to create tension in the area and will remain
on the offensive as long as this distracts world public opinion and
prevents it from abiding to any demands from Europe as regards human
rights, freedom of minorities and religious properties, the Kurdish
and Armenian problems, and of course Cyprus.

If the Cyprus problem were to be solved any time soon, or at least
seem to be on that path, then the dark clouds from the north could
disappear. But until then, we should know that we are on our own.

As long as the Cyprus problem has no hopes of being resolved and
Turkish threats continue to loom overhead, one easy solution would
be taking our time to review the bids. This could be delayed as any
Cyprus reserves will surely be smaller than discoveries further south
from our shores and international oil exploration companies would
not be in a rush to start digging off Cyprus.

On the other hand, Cyprus will also have to decide if it wants to
allocate exploration and then the potential exploitation contracts to
North American companies (with the hope of warming up to Washington),
to European companies (as all EU members would prefer us to do), or
to newcomers such as Egypt, which has a huge burden with the supply
contracts for natural gas that it will not be able to fulfill and
seeks to find new sources of energy supply.

Egypt, just like Turkey, is a growing country with its population
approaching 70-80 mln very soon. It is supposed to be the main supplier
of the Arab Gas Pipeline that ends on Syria’s border with Turkey,
while its own needs are growing rapidly inasmuch as its own crude
supplies will soon not be enough. The government in Cairo has even
resorted to alternative sources of energy with wind-generated power
plants now on the increase.

If we ignore the fact that the announcement of the winning bidders for
the 11 blocks off Cyprus has been suitably planned to coincide with
the final days of the presidential elections, the government should
get serious and decide who it wants as its ally – the Americans,
the French (who have a bone to pick with Turkey), or with Egypt.

The same mistake should not be made when the now-troubled state
carrier was contemplating buying new aircraft and the state, as its
main shareholder, could not decide whether to buy Boeings (and be
friendly with Washington) or Airbus (and be friendly with France
and Germany). As a result of dragging our feet and opting for both,
we owe favours to neither group on either side of the Atlantic.