THE ANNOUNCEMENT yesterday of some seven trillion cubic feet of natural gas in Block 12 was indeed good news for Cyprus.
Not only does it mean securing energy supplies for decades, it will give a boost to the economy. It also paves the way for more to come in the form additional licences for adjacent blocks, for which there should now be even more interest.
But before we get carried away on a tide of hydrocarbon euphoria there are also many variables to be considered, not least the fact that it will be at least three years, if not more, before the find can be exploited, according to commerce minister Praxoulla Antoniadou. Some experts say it could be even longer, although the discovery is likely to restore some confidence in the economy and perhaps attract gas-related foreign investment in the meantime.
That aside, first and foremost in the short term, a national plan will need to be formulated with perhaps the creation of a sovereign wealth fund along the lines of the successful one operated by Norway.
Then the issue of technical know-how will have to be addressed, which will also include the creation of the proper infrastructure to exploit the resources.
In the mid-term Cyprus will also have to look at creating its own expertise in the hydrocarbons field. This will involve specialised education and training.
Although all of this is likely to create opportunities and possibly have a positive impact on employment and the economy, the exploitation of the island’s natural wealth is a daunting task that will require much political savvy, cooperation and transparency, all of which are unfortunately in short supply given the incompetency and corruption we have witnessed at various times throughout this year.
But even if the government and political parties get their act together for once, the biggest danger to the successful exploitation of gas reserves will undoubtedly be the Cyprus issue.
The UN has already said any find on Block 12 would be a ‘headache’ in the search for a solution. That’s in addition to Turkey’s threats borne of its regional aspirations.
Experts and politicians may use nice words about treating the gas find as a catalyst for a solution or of cooperating with Turkey, but as things stand, no such possibility exists. The talks are going nowhere on issues that are already 37 years old. Seeking agreement on hydrocarbon exploitation would take another 37 or more.
At the same time Turkish threats cannot be ignored. Turkey has the power to end the Cyprus talks or cause enough trouble in the region to put an end to the drilling, so if this political thorn is not resolved the gas bonanza could prove to be more of a curse than a blessing for Cyprus.
