The announcement was made by Energy Minister Giorgos Lakkotrypis. Signed in December 2013, the agreement concerns the exploitation of hydrocarbon reserves straddling the median line between the two countries’ exclusive economic zones (EEZ).

The seminal agreement paves the way for commercial interests to take advantage of any hydrocarbon reserves found in areas that could cross either side of the dividing line between the two countries’ EEZ.

The unitisation agreement is a final agreement between two governments, and the first one signed between Cyprus and one of its neighbours, with significant implications for the development of the industry in the eastern Mediterranean.

Cyprus has already signed EEZ delineation agreements with Egypt, Lebanon and Israel, to the annoyance of Turkey, which is not a signatory to the UN Convention on the Law of the Sea outlining how neighbouring countries can peacefully carve up the rights to natural resources under the sea.

While the Lebanese parliament has yet to ratify the agreement with Cyprus, Lebanon is keen to explore its hydrocarbons options in the region, even raising hopes of reaching some kind of a settlement with Israel regarding the two foes’ dispute over claims to their respective economic waters.

The next stage in developing relations between countries sharing an EEZ border would be to sign a unitisation agreement which ensures that if reserves are found on the median line between the two countries, a peaceful, legal agreement exists stipulating how to carve up those reserves.

In case a joint reservoir is found, the companies working on either side of the line need to reach a corporate agreement with each other, which will come within the framework of the unitisation agreement between the two neighbouring states.

Cyprus and Israel have been negotiating for quite some time on a unitisation agreement, as yet to no avail.

At the same time, Cyprus has long sought a similar agreement with Egypt, though this did not seem likely during the presidency of Mohamed Morsi, who enjoyed the strong support of Ankara.

Following Morsi’s removal and el-Sisi’s election, Cyprus-Egypt relations have improved leaps and bounds, with Foreign Minister Ioannis Kasoulides being the first among EU peers to visit Cairo post-Morsi.

President Nicos Anastasiades was then invited to the Egyptian capital on an official visit in December, when the unitisation agreement was concluded, while more recently, the Cypriot leader was the only EU head of state to attend el-Sisi’s swearing-in ceremony.

Source: Cyprus Mail