articles | 11 November 2014

Cairo summit a first important step for hydrocarbons

The declaration signed at the Cairo summit is envisioned as an outline agreement between Cyprus, Greece and Egypt, one that can lead to a commercial deal involving hydrocarbons.

That was the clearest yet description of the substance of the Cairo confab, as explained by Foreign Minister Ioannis Kasoulides, who had accompanied the President in Egypt.

“We are still far from a commercial agreement,” Kasoulides said on Monday.

“Such an agreement will be looked at first by the (energy) companies, and later on the governments will become involved to create the appropriate legislative framework for it. All this is an initial stage, it is not something that will happen from one day to the next,” he added.

“What happened in Cairo was to turn attention more to regional stability, peace and security, to be achieved by various means, including this type of commercial deal involving natural gas. Picture Israel supplying Egypt with natural gas, as Egypt has supplied gas to Israel in the past. This would be an earth-shattering development in our region, considering that these two countries have fought three wars. Now, the political foundation has been laid for regional cooperation.”

Likewise government spokesman Nicos Christodoulides said the foreign ministers of the three Mediterranean nations have been charged with fleshing out the content of the Cairo proclamation.
On November 24 the energy ministers of the three countries will be holding “more specific talks” here, and regular contacts would follow on a trilateral level, said Christodoulides.

Egyptian President Abdel Fattah al-Sisi has accepted an invitation by President Nicos Anastasiades to pay an official visit to Cyprus before year’s end.

According to Christodoulides, a tripartite summit of the heads of state of Cyprus, Israel and Greece was also on the cards: “Deliberations are at an initial stage, and this week possibly a lower-level meeting will be taking place. We will be able to speak more on this following the President’s visit to Jerusalem on December 2.”

Politis writes that the governments of Cyprus, Greece and Egypt are laying the groundwork for the signing of a MoU on matters relating to hydrocarbons, the objective being to put ink on paper during Sisi’s visit here, likely in early December.

The MoU’s purpose, according to the daily, is among others to provide the political backbone to talks now underway between the Cyprus Hydrocarbons Company and British Gas for the potential sale of Cypriot natural gas to BG’s LNG terminal in Idku, Egypt.

This may also tie in to Noble Energy’s announcement last week that it is currently exploring regional pipelines – rather than land-based solutions – for monetising its Cyprus gas finds.

Concerning natural gas prospects, Kasoulides pointed out on Monday that “common sense dictates that the top priority should be to engage on a regional level and then explore beyond that.”

On Ankara’s objections to Cyprus’ gas explorationin its Exclusive Economic Zone (EEZ), the chief diplomat reiterated that Nicosia would not cave in.

“We cannot take into account Turkey’s demands, because her demands will not cease. For example, today Turkey wants ENI to stop drilling, tomorrow that we not sell natural gas to Egypt, and the day after who knows what else.”

Last month Turkey despatched a research vessel, the Barbaros, into Cyprus’ EEZ to conduct seismic surveys. The vessel is being escorted by Turkish warships. The move prompted the president to break off peace talks with the Turkish Cypriots.

Over the weekend Turkish Admiral Bulent Bostanoglu was quoted as saying Turkey’s navy has been issued with “rules of engagement” in the event Turkish warships – taking part in naval exercises in the eastern Med – should encounter Greek or Israeli vessels.

Bostanoglu went on to add, however, that the drills had nothing to do with ongoing activities in the eastern Med. The exercises – beginning on November 6 and ending on November 14 – involve naval forces from the United States, Germany, the UK, Spain and Canada.

The admiral’s comments drew a response from the Greek military. An unnamed senior military officer told Greek newspaper To Vima that the Greek navy likewise had been issued with rules of engagement.

Asked about this, the government spokesman downplayed the Turkish remarks as sabre-rattling, for PR purposes, adding that Nicosia will not play along by escalating tensions.

Source: Cyprus Mail

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