Hydrocarbon companies active in Cyprus urged the government to find immediate solutions for infrastructure-related issues and help firms providing support services.
Representatives of ENI, Total and ExxonMobil, attending the 6th Eastern Mediterranean Gas Conference in Nicosia, also referred to Cyprus’ capacity to become a hub providing services for hydrocarbon activities but underlined the need to find immediate solutions, for Cyprus to gain a competitive edge.
Allesandro Barberis, the Managing Director of ENI Cyprus, talked about the country’s location, its EU membership and its attractive fiscal system.
But challenges remain, such as the lack of existing infrastructure and port facilities. Barberis also noted a recent announcement for the creation of a new port at Vassiliko, expected to be ready in 2023.
“We need to have alternatives in the short and medium term,” apart from long-term solutions, he underlined.
The ENI official added that Cyprus is in still in the exploration phase, while neighbouring countries are moving with a different pace.
“If Cyprus doesn’t take decisions soon, maybe it will not be able to compete with more advanced projects in the region,” Barberis said.
He called on the government to provide incentives and concrete measure to companies, something which will allow Cyprus to play a different role in the area.
“Cyprus has all the characteristics needed and we hope it will move in this direction.”
Yves Grosjean, the General Manager of Total, spoke about the urgency to create a centre providing support services for hydrocarbon activities, noting that the work of specialized companies amounts to more than 80% of the total working hours when drilling.
Their work involves conducting environmental surveys, monitoring, drilling, plumbing and waste management, he said.
“These companies need infrastructure and highly-skilled technicians and engineers.”
On Cyprus’ development into a service centre, Grosjean said this is a long-term prospect which will only materialise with the discovery of large quantities of energy resources, maybe in 5-10 years’ time.
Varnavas Theodosiou, ExxonMobil Managing Director in Cyprus, addressed the need to have a stable and predictable investment climate in Cyprus.
He also said that the process to license the company and proceed with the drilling of the wells in Cyprus’ exclusive economic zone (EEZ) block 10 was fast.
Speaking about challenges, he said that the government should institutionalize a one-stop-shop to allow companies to cope with bureaucracy.
The ExxonMobil official argued that in order to have more findings, increased activity is needed, and this cannot be done without facilities and service operators.
Charles Ellinas, CEO of E-C Natural Hydrocarbons said that Cyprus should focus on becoming a service centre and construct an LNG plant by using Israeli gas and existing discoveries in Cyprus’ EEZ, including the Glafcos, Aphrodite and Calypso reserves.
“The longer we leave it the most difficult it becomes,” Ellinas said.
He predicted that LNG needs in Europe will decrease, partly due to the use of renewable energy sources.
Referring to the possibility of Turkey drilling in the south of Cyprus, Ellinas said this would be a huge destabilization factor and the government must be ready for this.
Andreas Koutsoulides, Commercial Lead at Cyprus Hydrocarbons Company, analysed the island’s basic choices for the exploitation of its energy resources.
He said the government’s number one priority is the construction of an onshore LNG plant at Vassiliko, calling it a strategic plan with additional effects for Cyprus’ economy. For this to happen, a minimum of 10-15 tcf of natural gas is required.
He said existing LNG plants in Egypt, saying that they come as a second choice. He added that after 3 years, relations between the two governments have matured and there is a good understanding.
As for the option of a Floating LNG facility, Koutsoulides said this technology is considered to be mature enough and Cyprus is looking at that very carefully, since it provides a lot of flexibility in terms of location and a much lower cost.
He said that decisions on the ambitious EastMed gas pipeline project are currently on a political level, aiming at establishing the right intergovernmental framework.
