Cypriot president: Underwater gas fields can help unite island

Story highlights

  • Cyprus is sitting on large underwater reserves of natural gas
  • Country is expected to exploit fields in coming years and generate billions of dollars in process
  • Cypriot president believes energy discovery could help unite the island

It may be early days in the quest for energy underneath the crystal blue waters of the Mediterranean -- but the eventual bounty may be sizable for Cyprus.

The Eastern Mediterranean is considered a new energy frontier with a 2010 report from the U.S. Geological Survey estimating there to be 122 trillion cubic feet of gas in the area.

Nearby Israel, Lebanon and Egypt have also marked their offshore territories and are evaluating their potential.

But for Cyprus, still bitterly divided between a Greek Cypriot south and Turkish Cypriot north, the rewards could be more than just financial.

According to the Republic of Cyprus' president Nicos Anastasiades, this rich supply of energy could help unite the island.

"The benefits out of the exploitation of the wealth of energy is going to the interest of all the people of Cyprus whether they are Greek or Turkish Cypriots," Anastasiades told CNN.

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"What I'm saying and trying to convince our compatriots is that the wealth is belonging to the state, the residents of Cyprus. You (Turkish Cypriots) have the nationality of Cyprus as well, let's find a solution on the basis as has been agreed then you will have your proportion in participating in this wealth."

    Texas based Noble Energy undertook its first drilling work in Cypriot waters last summer. French firm Total and ENI of Italy, meanwhile, will start exploration later this year.

    In between the ports of Limassol and Larnaca there are plans for a $10 billion facility to manage the natural gas discovered offshore.

    Cypriot officials say that the reserves in the one block that has been surveyed so far, when brought to market, would represent more than 100% of the country's GDP of $23 billion dollars.

    Early indications from Noble also hint that there are many millions of barrels of oil in their field as well.

    With such a potentially valuable asset, Anastasiades believes it is important to take heed of the experiences of other countries with large energy reserves and for Cyprus not to be caught out by the resource curse.

    "That's why we are talking about the Norwegian model," he said referring to the Scandinavian nation's sovereign wealth fund that invests a large chunk of the money generated from its own underwater oil and gas fields.

    At the same time Anastasiades hopes to manage expectations as to the level of wealth Cypriots can expect to gain.

    "We are trying to pass on to people that when we talk about energy we are talking about future generations and not for the present only." However it is important that they "do not have any expectations that we are going to become like the Arab Gulf Emirates and so on," he added.

    Anastasiades also recognizes that external factors have the potential impact how this lucrative new industry develops in the region.

    He points out that Turkey has been "violating (Cyprus's) economic zone" in recent years as they attempt to influence relations between Greek and Turkish Cypriots.

    These actions may still come to impact attempts to unify the country in the future, he said, but he is confident that will ultimately not be the case.

    "All of us nowadays are realizing that it's a high time to give an end to these this protracted problem. This is why I have mentioned before as an incentive the energy, the hydrocarbons and all these kinds of things."

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