Samples of natural gas deposits in the exclusive economic zone of Cyprus have not proved to be as promising as initially expected. The drilling results in plot 12, called Aphrodite, show that the capacity of the region is around 85-255 billion m3 of natural gas. This is much lower than the initial assessment of the exploring company, Noble Energy, which a few months ago, had estimated that the volumes could exceed 290 billion m3.
The chairman of the state gas company in Cyprus, Costas Ioannou, said that the minimum reserves announced by Noble Energy are sufficient and even exceed Cyprus’ natural gas requirements, which are almost one billion cubic metres annually.
The opinion of the President of the Institute of Diplomacy and Global Affairs, Andreas Andrianopoulos is that if the reserves of natural gas in Cyprus prove to be sufficient this could change the geopolitical division of the region. If there are usable reserves of natural gas in plot 12, Cyprus could easily develop exports through Greece to Italy and thus, quickly fill a market niche, which could be very profitable for all participants in the project.
"Such a development would strengthen the political stability of Greece and the interest in not allowing our country to fail would be greater." Andrianopoulos stresses that the development of the reserves and the construction of transit facilities will generate revenue for Greece. At the same time, the reserves are not sufficient to change the geography of the world energy market. It is more important that their development will make the country more stable because the states dependant on the natural gas in plot 12 will have a serious interest in Greece’s political stability.
"We have lost the opportunity to get into the energy game through the Burgas-Alexandroupolis oil pipeline, but we can do this by the deposits in Cyprus." According to Andrianopoulos, one of the various problems hampering the implementation of the Burgas-Alexandroupolis project is the fact that Russia has never pledged how much fuel it will supply in order for the system to be effective and beneficial to all. The project cannot be developed until it is specified where the gas to the Greek-Bulgarian oil pipeline will come from.
According to Adrianopoulos, Russia must first find answers to the questions concerning its cooperation with Kazakhstan and then, the obstacles to the Balkan project will be overcome. Russia insists that the state has to be the only owner of the pipelines passing through its territory, but private companies, which are mutually cooperating in the extraction of oil from the Caspian Sea, do not like the idea. These issues have been dragging on for over a decade now, but the specialist states that in the end, Russia has the upper hand and solutions will be found sooner or later.
Andreas Andrianopoulos presented these observations at a lecture on the economic crisis and energy politics of Southeastern Europe. He explained that the future of energy economy globally is largely in the hands of Russia. "This country has huge reserves, but low productivity," he said explicitly, adding that Gazprom does not focus on making targeted investments to improve efficiency or to develop better infrastructure. Instead it spends huge amounts of money, not directly for the energy sector but for stakes in media, newspapers, and even for building a small city of the future, which is beyond the need of improving productivity.
As for Russia’s state trick in the energy market Andrianopoulos said, "The aim of Russia is to create a strong energy core in the economy and then, to start to privatize slowly and gradually." In his opinion, this strategy is correct and it will bring positive results for both the state and the development of healthy entrepreneurship.
Last but not least, Adrianopoulos stressed that Russia's current productivity cannot meet the promised deliveries of fuel for all possible gas and oil pipelines. Therefore, it is essential to embark on targeted investment in specific projects that actually will be profitable.
Regarding the USA, Andrianopoulos tried to explain an oft-repeated cliché about the presence of Americans in the Middle East. He said that the USA in fact imports more than 12% of the oil from the countries in North Africa and the Middle East, about 51% comes from own production, and the rest comes from the Atlantic and North Sea countries such as Angola and Venezuela. "As you can see, Americans are concerned with peace in the Middle East, not because it is the main source of fuel, but because a crisis in the region could cause great twists and Europe and Japan would focus on their sources of oil."