* Minister – Kassinis battle does not seem to let up *
The island’s ambitious venture to prospect for natural gas and rescue the troubled Cyprus government from financial collapse seems to be headed for catastrophe before the exploration drilling even produces any tangible result, as the Minister in charge and her subordinate are locked in a bitter feud over control.
The main opposition parties, Disy and Diko, have also joined the arguments, fuelling daily skirmishes on TV debates and tempers often running high with government officials.
Energy Service Director Solon Kassinis told a parliamentary committee hearing that he and four other colleagues were stripped of their duties by Commerce and Industry Minister Praxoulla Antoniadou Kyriacou, with the latter defending the changes by saying that these were initiated by her predecessor, Antonis Paschalides of the former coalition partner Diko.
The Minister told the House Trade Committee that Attorney General Petros Clerides has advised her that she can take disciplinary action against Kassinis, who she accuses of leaking confidential information about Noble Energy’s activities to the media and opposition party officials.
Antoniadou said that Kassinis did not brief her properly and spread rumours that the government had been planning to delay the drilling process in Block 12.
Texas-based Noble, that is partnering with Israel’s Delek, already started exploratory drilling, with the first results expected in December. Following a second exploratory procedure, the government plans to proceed with auctioning or even outright awarding exploration licenses for the remaining 12 blocks in its Exclusive Economic Zone beyond the island’s southern shores.
A delegation from Lebanon is also expected in Cyprus to discuss delineating the maritime borders of the two countries respective EEZs, while Israeli President Shimon Peres’ two-day visit starting Wednesday is expected to have common gas exploration and development high on the agenda of bilateral talks.
UNDER FIRE
Opposition MPs were highly critical of the Minister asking her why she did not order a criminal investigation against Kassinis, who will now be suspended, but at the same time responsible to prepare the documentation for the second round of licensing of the remaining offshore blocks.
Despite the great pressure, Antoniadou did not reveal the names of the technocrats who are assisting her ever since Kassinis was ordered to hand over keys to the archives of the exploration projects to weeks ago.
On Monday, Kassinis told a conference at the University of Nicosia that the Minister was wading into uncharted territory that should be the domain of technocrats, claimed that the Energy Service has been rendered toothless and that currently no one is in charge of energy affairs.
He claimed that as a result of being sidelined, over the last fortnight the Service has received no reports from Noble on its drilling operations in Block 12.
Kassinis argued that gas reserves in the Cyprus EEZ were so immense that they would require an LNG plant with three trains, each with a capacity of 5 million tones per annum.
He said Block 12, estimated to hold up to 10 trillion cubic feet of natural gas, was not even the best prospect within the EEZ.
TURKISH THREATS
Turkey’s Energy and Natural Resources Minister Taner Yildiz and Turkish Cypriot officials are expected to sign a license agreement that will allow the Turkish Petroleum Corp. (TPAO) to explore oil and natural gas along the northern coast of the island.
Yildiz recalled that on September 21, Turkish Premier Recep Tayyip Erdogan and Turkish Cypriot leader Dervis Eroglu had signed in New York an agreement on the delineation of the continental shelf in the East Mediterranean.
Under the agreement, TPAO will be able to make three dimensional seismic research and drilling in the occupied north.
Turkey said it is sending a new ship named “Oceanic Challenger” reportedly rented from Norway to carry out 3-D seismic research and prospect for gas and oil in a 1,100-square-kilometer area and stay for 40 days. There are also reports that TPAO is ready to buy a new seismic research ship worth $150 mln that would aim to research in Turkey’s territorial waters and if needed in international waters.
DEFA DISMANTLED?
The chairman of the state-run company responsible for the import and distribution of natural gas, DEFA, said it has been left completely in the dark on how and when natural gas will be brought to Cyprus.
Costas Ioannou, executive chairman of the Natural Gas Public Company told CyBC last week that the company was not party to decision-making processes, had no say in what was happening and was left with no direction as to how it should go about its job.
Ioannou said that DEFA is to be the sole importer and supplier of natural gas in Cyprus, and is responsible for any type of gas, whether in its pure form, compressed or liquefied.
He said that Noble Energy gave numerous presentations to DEFA, the government and Electricity Authority of Cyprus, saying that they could bring natural gas to Cyprus via pipe by 2014 if given the go-ahead.
“We have not answered, we have not discussed it with them. We don’t have a mandate to sit down at a table and understand what exactly they mean. If they are prepared to guarantee this supply by 2014? How? On what economic terms? All this is in the air,” said Ioannou.
“NO TIME”
According to the US Geological Survey, the Levant Basin, adjoining Cyprus, Gaza, Israel, Lebanon and Syria, may contain as much as 122,000 bln cubic feet of recoverable gas, equivalent to 20 bln barrels of oil.
The Financial Times quoted Hans Jochum Horn, a Norwegian businessman with deep knowledge of the oil and gas sectors of Norway and Russia, as telling Cyprus’s leaders: “You have no time. You have to get the key issues on the table very soon and take some quick decisions. If you set the right framework at the beginning, you will not squander the riches.”
Cyprus may choose to create a national energy champion, as Norway did when it established Statoil in 1972, he observed. “If so, the company should be run like a private company. It should have independent directors and should be quoted on a major stock exchange.”
Horn, who is deputy chief executive officer of the Renaissance Group, an investment company that specialises in emerging markets, said that if Cyprus set up a wealth fund, “everything you earn offshore should go into the fund and only a little bit should trickle out [for current expenditure]”.
