Can Natural Gas Save Cyprus?
By Christopher Coats
After Cyprus was left scrambling to salvage a bailout package left nearly dead after a titanic misstep last week, the country’s new-found energy potential finally entered the conversation despite assurances from on high that it would not.
Cyprus is one of a handful of countries in the Eastern Mediterranean with a firm claim on one of the largest natural gas finds in the region, offering access to an estimated 50 to 60 tcf of gas and 1.7 billion barrels of crude in waters off its southeastern coast. If exploited with care, the reserves could bring in as much as $400 billion over the coming years, providing a boon to a deeply damaged economy as well as meet domestic demand.
Despite such promise, many local leaders have insisted that no pressure be put on the reserves until they actually start producing revenue, which they expect as early as 2018 or 2019. To do otherwise – and start securing loans on the back of future earnings – would be irresponsible and run the risk of selling off the country’s future at low rates; a sentiment held by Nicos Anastasiades, the center-right candidate who won national elections earlier this month. However, a new and potentially crippling development with the country’s banking system has cast doubt on the country’s immediate future, forcing the issue to the forefront of the country’s political and economic future.
First, for some background.
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