By Stefanos Evripidou
THE GOVERNMENT plans to grant the eventual winner of a license for a single integrated casino resort the right to operate a temporary casino until the bigger complex is built, in turn, giving state coffers a much-needed injection.
“Because the integrated resort will take time to build, one thought, which needs further study with our consultants, is whether we could give the winning consortium the license permission to operate a casino temporarily for two or three years until the creation of the integrated resort,” Energy and Commerce Minister Giorgos Lakkotrypis said at a press conference yesterday to mark eight months in office.
The aim is to license the casino within 12-14 months from the day consultants are hired to help the state prepare the groundwork, he said.
“This way, the government will start receiving revenue, but also securing the license will become more attractive because the winning consortium won’t have to wait two or three years until there is liquidity,” he said.
The minister also confirmed reports that the government has invited the Italian-South Korean consortium ENI-KOGAS to launch negotiations on awarding gas and oil exploration concessions for offshore blocks 5 and 6 in Cyprus’ exclusive economic zone (EEZ).
He said the minister sent a letter to the consortium on Thursday.
“We expect an answer in the coming days,” said Lakkotrypis.
The government has so far signed contracts with ENI-KOGAS for exploration in blocks 2, 3 and 9 and with French Total for blocks 10 and 11.
In the first licensing round in 2007, Cyprus signed a hydrocarbon exploration contract with US-based Noble Energy for offshore block 12. The second licensing round, launched in 2012, for the remaining blocks in Cyprus’ EEZ closes on December 2.
Should ENI-KOGAS respond positively to the call, the government has indicated the licensing round will be extended by six months, but only for blocks 5 and 6.
The two blocks lie southwest of the island, and are within the area which Turkey claims fall within its own continental shelf.
Regarding the recent cabinet decision to create a dedicated Hydrocarbons Service within the ministry, Lakkotrypis said the aim was to focus on local reserves as well as on activities related to Cyprus’ EEZ, such as production-sharing agreements with companies that have offshore concessions.
“We have to be very well organised as a ministry to handle the bulk of work we have and which will multiply after October 2014, when the remaining companies will start drilling,” he said.
In addition, the new service will focus on the internal energy and electricity market, he added.
On the liberalisation of the electricity market, the minister said the Energy Regulatory Authority (CERA) has awarded licenses to two independent enterprises for electricity production. Both are waiting for the arrival of natural gas to begin production, he said.
The electricity market has partially opened to competition while household consumers will be able to choose their provider from January 2014 onwards, said Lakkotrypis.
Considering that the only independent electricity production at the moment comes from photovoltaic solar parks, he does not expect energy costs to fall with the opening up of the market.
One option to reduce electricity costs is through the so called ‘interim solution’, he said, referring to the arrival of natural gas to fuel energy production from third sources, prior to the utilisation of the country’s own reserves.
The ministry is currently in the final stages of exploring this option, said Lakkotrypis, noting that he expects final decisions to be taken by the first week of December.
On the installation of photovoltaic systems, the minister said a lack of funds was affecting his ministry’s goals for developing renewable energy sources, despite the positive response from households.