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Cyprus Energy

Councillors’ walkout may allow oil firms stay in Larnaca (Updated)

The failure of Larnaca’s municipal council to vote anew on a proposal to revise the February 8 decision to evict hydrocarbon companies from the town’s port may open the way for government to intervene granting them the right to choose their own base for themselves, an industry source said.

The source, who was commenting on condition of anonymity, said that the outcome of yesterday’s turbulent session of the municipal council which was interrupted after councillors from the AKEL, DIKO, EDEK and Citizens’ Alliance factions stormed out before a proposal to reverse the eviction decision was put to the vote, was not a surprise.

“It was something that we expected,” he said adding that it became known in advance that the opponents of the proposals to extend permission for oil companies to use Larnaca port were planning the walk out in advance. “The ball falls back at the feet of the government which will take final decision,” the source added.

A transport ministry official who asked not to be identified said that Minister Marios Demetriades would meet Cyprus Ports Authority officials on Friday to discuss the next steps.

The ministry official was unable to confirm whether the recommendations of a committee about the hydrocarbon companies’ permanent base set up mid-February would be included on the agenda.

Larnaca mayor Andreas Louroutziatis said on state-radio CyBC that he encouraged France’s Total, Italy’s ENI and the U.S. Noble Energy to remain in Larnaca and continue using its port and that he asked the government to issue pertinent permits.

“Energy also has a very important role to play,” the mayor said. “Energy is a dynamic sector and will be the barometer of the Cypriot economy’s growth and personally I believe that Larnaca cannot remain out of the planning”.

The energy industry source said that he considers likely that following the decision of the minority to walk out the meeting and the clear stance issued by the DISY mayor who is backed by the majority, it is possible for the government to take the matter in hand and allow companies to decide for themselves whether they prefer to relocate their base to Limassol or remain in Larnaca.

“The mayor was right to override the decision of voting,” the source said adding that after the government decided to ask the consultant group Ernst & Young to advise it through the process of the commercialisation of the Larnaca port, “it would be premature to exclude energy companies from Larnaca”.

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