The time may have passed to exploit Cyprus’ gas

When the gas discoveries were first made, the prevailing economic and political conditions were substantially different

I assume that you have all heard about the EU’s plans to create renewable alternatives to fossil fuels for satisfying the world’s energy needs. The transition from fossil fuels (such as oil and gas) to other “green” forms of energy (such as solar and wind power) is expected to materialise within a span of 20 years, between 2030 and 2050.

These ambitious plans appear likely to be adopted by the rest of the world, as a result of realising that the climatic changes threatening our planet have been caused by the widespread use of hydrocarbons. The UN Conference on Climatic Change (COP 26) that will be launched today in Glasgow will probably reaffirm this conclusion, although the possibility always exists that the conference may be confined to general platitudes.

Oil producing countries (such as Saudi Arabia) are already investing large sums of money in developing alternative energy technologies and the progress made is undoubtedly significant. Electric cars are timidly making their appearance in many countries while solar panels and wind turbines are becoming a common sight all over the world.

Without doubt, this irreversible evolutionary process will have a significant impact on the large, international companies that are involved in oil extraction and trading. These companies will gradually refocus their investment plans on renewable sources of energy and will become hesitant to invest significant amounts of capital on infrastructural projects (such as the EastMed pipeline) that are likely to become obsolete soon after their completion.

Indeed, if one takes into consideration the declared intention of our neighbouring country to frustrate any attempt of extracting oil or gas from a large segment of the maritime zone claimed by the Republic of Cyprus as forming part of the Cypriot Exclusive Economic Zone (EEZ), and the consequent reluctance of prospective investors to engage in this kind of adventures, it becomes increasingly evident that the Republic of Cyprus’ prospects of succeeding in implementing its plans are not particularly bright.

When these plans were hatched a few decades ago, the then prevailing economic and political conditions were substantially different to those prevailing today, even though even then prudent voices were heard arguing in favour of deferring all gas and oil exploitation activities until the Cyprus issue was solved. Unfortunately, these voices were ignored, and the attempted exploitation of these natural resources became an additional obstacle to reuniting Cyprus.

Under these circumstances, the government’s insistence on the uninterrupted implementation of its plans to exploit Cyprus’ gas reserves is somewhat difficult to comprehend.

Of course, some may be quick to point out that the existing contracts between the government and the large oil companies (Chevron, ExxonMobil, EMI and Total), probably contain punitive clauses if one of the contracting parties fails to honour the commitments undertaken under the contract. I am not aware of the contents of these contracts and when I asked permission to study them, I was told by an official of the competent ministry that the contracts are classified and therefore could not be placed at the disposal of a journalist. In any event, without being a specialist on the subject, I would venture to guess that the legal consequences of withdrawing from a contract due to a hostile military intervention or a threat of one by a neighbouring country would be sufficient to release a contracting party from its contractual obligations.

In addition, someone may argue correctly that the delineation of the EEZ and of the continental shelf (in practical terms, the two concepts overlap to a large extent) does have an impact on other rights, such as fishing rights, that are not directly related to the exploitation of hydrocarbons. Though correct, the observation lacks substance because it implies that we can secure these rights by simply claiming them. Unfortunately, this is not the case. Claiming these rights other than by engaging in a process of peaceful negotiation could result in the permanent loss of a substantial piece of our homeland and, possibly in the medium term, to the loss of the whole of Cyprus.

In the end, one could pose the following question: Now that the price of natural gas is clearly on an upward trend and Europe is actively looking for ways to minimise its dependence on Russian gas, is it the right time to discontinue the work that could lead to the commercial exploitation of Cyprus’ natural gas deposits? My assessment is that during the transitional stage from fossil fuels to “green” renewable sources of energy, the demand for natural gas and – logically – its price will increase. It follows that the crucial question is the timeframe during which the gas can be exploited. Clearly, this could be accelerated by channeling the gas to Western Europe via Turkey. These are problems rarely addressed on the Cyprus political scene.

I must admit that the subject of my article may have dimensions that I am not unaware of. If this is the case, the government has a duty to explain to the public and to justify its insistence on pressing on with implementing plans that were hatched years ago under different conditions.

Nevertheless, one thing is certain. Turkish Cypriots definitely have the right to participate in the management of Cyprus’ under-the-sea wealth. It is, of course, understood that those selected by the president to participate in this process must be people that command respect and enjoy a good reputation in the Turkish Cypriot community and unconditionally support reunification within the framework of a bicommunal, bizonal federation – the declared goal of the president himself. Clearly, the appointment of Turkish Cypriots, who support partition would undermine the goal of reunification and would probably result in Cyprus’ exit from the European Union.

Christos Panayiotides is a regular columnist for the Sunday Mail and Alithia