‘Long-term conflict in the region could hit Cyprus energy’

Long-term conflict in the Middle East could delay projects for the development of natural gas fields, experts said on Tuesday as others postulated that in the three to four years important projects in Cyprus’ exclusive economic zone (EEZ) would take their course no matter what.

Speaking at the 11th Energy Symposium in Nicosia, energy expert and CEO of EC Natural Hydrocarbons Company Ltd Charles Ellinas said that recent developments in the region, if they continue, could have negative effects on the development of natural gas in the Eastern Mediterranean, while a long-term conflict could delay projects and final investment decisions.

He added that the conflict could create doubts and concerns in the minds of investors that the geopolitical risk to develop in the area is too high.

Commenting on the potential impasse in talks between Cyprus and Chevron for the Aphrodite field in Cyprus’ EEZ, he said that the government is rightly seeking improvements to the development plan.

However, he said, factors such as the fact that the clock on fossil fuels has started ticking backwards should be considered and if they wait there may be risks.

Meanwhile, at the same conference, the CEO of the Cyprus Hydrocarbons Company (CHC) Diogenis Angelides said that in three to four years time, important natural gas fields in Cyprus’ exclusive economic zone (EEZ) will take their course and with patience and good practices the fields will be developed as they should.

Angelides said that there are currently significant natural gas deposits in Cyprus’ EEZ that are currently being evaluated and will be ready for further development.

He said that in the next four to five years, three to five final investment decisions are expected, which will open doors to accelerate natural gas targets.

He highlighted the huge financial commitment associated with these projects, with investments ranging from one to ten billion dollars to develop a single field.

Angelides added that the approach to these projects should be long-term, given their extended life cycle, spanning from two to over thirty years.

He added that the local market will also benefit from the development of the natural gas reserves, as it will lower the cost of living for residents on the island.

Regarding the Chevron deal, last week the government had reported that it remained optimistic an agreement could be found between the two sides.

“Let us wait for the negotiations to be completed. Until then, we will not be making any further formal statements,” government spokesman Konstantinos Letymbiotis had said.

Chevron are the operators and a 35 per cent partner in the Aphrodite field, along with Shell (35 per cent) and Israeli firm NewMed Energy (20 per cent).