Cyprus Mail
Cyprus Energy

Taxpayers to foot Limassol relocation bill for energy companies, minister says

Energy Minister Yiorgos Lakkotrypis said that the government would refund hydrocarbons companies for the cost of their relocation to Limassol, made necessary after the decision of the Larnaca municipality to reject them.

“Every relocation costs money, which the government will have to cover as expenses are refundable,” Lakkotrypis said in an interview with state-radio CyBC on Tuesday, a day after he and his colleague, Transport Minister Marios Demetriades met with hydrocarbon companies operating in Cyprus’s exclusive economic zone (EEZ). “The government will be called upon to pay from its share from profits at some point. We have to finish this, find them bases from which they can smoothly carry out their drilling activities and the development of the Aphrodite reserve”.

Lakkotrypis said that the two ministers agreed with the US company Noble Energy, France’s Total and Italy’s ENI to set up a technical committee that would assess the needs of the three companies in terms of space.

“The needs differ in terms of timetables, as those of Total are more immediate,” the minister said in reference to the French energy giant’s hydrocarbon exploration drilling programme in Cyprus’s EEZ scheduled for the second half of 2016.

Total agreed to inform Cypriot authorities within ten days, as to whether a proposed 25,000 square metre area at the port of Limassol meets the company’s needs, the energy minister said. “It is not just the space, it is also the facilities, where the supporting ships will have to dock,” he added. “Since the three companies will have to operate simultaneously, this could be an issue. In terms of timetables, their needs are different at this point”.

Hydrocarbon companies which invested millions of euros to set up production and storage facilities in Larnaca were angered over the municipality’s decision to reject their request to continue using the town’s port prompting them to consider relocating their bases in Cyprus to other neighbouring countries such as Egypt.

“The port of Larnaca is ideal for the companies as it is not very busy and it can smoothly serve them,” the minister said while ruling out a revision of Larnaca’s decision. “From the moment that the municipal council took a decision, even with a marginal majority, that it does not accept any activities to take place there, we have to find a permanent solution”.

The minister said that supporting activities could have an “immediate” positive impact on job creation in Cyprus which saw its unemployment persist at around 15 per cent.

He added that while Cyprus was the recipient of “strong interest” from companies operating in the energy industry to shift their base to Cyprus it was currently trying to persuade those already operating on the island not to move abroad.

“It’s unbelievable,” he said. “We are missing a big chance as activities in the eastern Mediterranean will intensify following (Egypt’s) Zohr discovery, and instead of talking how we could serve as a base for other countries we are trying to avert having these companies served from other countries”.

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