Cyprus Mail
CM Regular ColumnistOpinion

Lighting a match under future gas wealth

By Hermes Solomon

Israeli prime minister, Benjamin Netanyahu told Turkey’s Anadolu News Agency that Israel sought to foster good relations with Turkey and he expressed his hope for reconciliation between ‘former allies’.

Turkish Foreign Minister, Ahmet Davutoğlu said last month that Turkey and Israel were the closest they have ever been to a normalisation of bilateral relations since the raid on the Turkish Mavi Marmara aid vessel in May 2010.

Are Netanyahu and Davutoğlu just gassing, or have the future benefits to both nations of Israeli natural gas piped through Turkey brought the two militarily strongest eastern Mediterranean powers irrevocably together?

If the latter is the case, then Greek Cypriot plans to build an LNG plant at Vassiliko and Greek plans to build undersea pipelines in all directions in the Med are at an end.

The alternative to laying pipelines and building LNG facilities could be Shell Oil Company’s use of a ‘special ship’ that compresses natural gas recovered from north Australian undersea gas fields, transferring it to tankers to be delivered worldwide.

The UK is a major buyer of tanker gas and imports only one per cent of her natural gas needs from Russia, relying on a mix of ‘imported by tanker’ and North Sea gas.

A second ‘special ship’ is under construction in South Korea, but unfortunately not for use in the eastern Med. The designer of the first, now retired, is a Cypriot and living here, but apparently is not being consulted by the Cyprus energy ministry. Rationality, it would seem, is incompatible with the shenanigans that surround really big commercial ventures.

And what about the shenanigans of the EU and US over Moscow’s stance in Crimea? Is Moscow protecting the interests of Russian speaking Ukrainians or Russia’s network of natural gas pipelines crisscrossing the Ukraine?

Western media and politicians comparing Hitler’s irredentism over Czechoslovakia and Poland (ostensibly to liberate German-speakers) and the Turkish 1974 intervention in Cyprus, with Moscow’s stance over Russian speakers in the Crimea, without explaining why the EU and US supported the overthrow of Yanakovich, who is still constitutionally the rightful president of the Ukraine (as was Archbishop Makarios of Cyprus after the Greek led coup) beggars belief. It would seem that joint EU and US shenanigans are aimed at gaining a foothold in Ukraine and Moscow, understandably, is stubbornly refusing to allow this to happen.

There is a huge difference between Moscow’s stance and the 1974 Turkish intervention. Turkey bombarded Cyprus, and Turkish troops fought Greek led Greek Cypriot troops for several days before a ceasefire was arranged, whereas, to date, Russia has not fired any shots in Ukraine. Turkey also went on to expel 180,000 Greek Cypriots from the north, with parallel expulsions of Turkish Cypriots from the south, and so far nothing of the sort has occurred in Ukraine.

While Crimea is a unique region of Ukraine in terms of its longstanding ties to Russia, northern Cyprus was simply the section of the island Turkey managed to seize, and it only became majority Turkish as a consequence of the irresolution of the Cyprob.

With the perpetual threat of Moscow closing the EU supply gas tap, will Cyprus’ as yet unknown quantities of natural gas receive incidental attention as an alternative energy source for the EU? This is doubtful given our constitutional defects, requiring at all times, three political parties to perform any ‘tango’.

Central Bank governor, Panicos Demetriades decided to grab 300k, transfer it to a foreign bank and run for cover after Italy’s biggest bank, UniCredit reported a fourth quarter 15 billion euro loss on Tuesday, setting aside money for bad loans and writing down goodwill from acquisitions. These results foreshadow the possibility that many financial institutions across Europe could be forced to acknowledge the full extent of their own problems under increased ECB regulatory scrutiny.

Did UniCredit highlight for Panicos the vulnerabilities still lurking within the balance sheets of many Cypriot banking institutions? Finding investors willing to invest in extracting Cyprus’ natural gas, building an LNG plant at Vassiliko and pipelines, as well as supporting our banks, must have been the reason Panicos took off. He must have realised the hopelessness of it all.

If the Cyprob talks fail yet again, Turkey will annex northern Cyprus and permit Israel to run its Leviathan field natural gas pipeline via the north of the island to Turkey, thus eliminating the republic altogether.

Given our present political and economic turmoil, such an outcome concerning distribution of Israeli natural gas is not beyond credibility. If anything, it seems far more likely than DISY keeping most DIKO ministers at their respective ministries for longer than a year.

While our politicians perpetually ‘fiddle’, thousands of citizens will suffer the iniquitous fate of chaotic courtrooms as banks foreclose on NPLs – never mind further deception meted upon disaffected bondholders this week by justice minister, Ionas Nicolaou.

Unless we solve the Cyprob, Moscow’s stubborn stance in Crimea and Turkish/Israeli reconciliation will light yet another match under Cyprus’ hopes of future gas wealth.

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