Contribution by the Minister of Commerce, Industry and Tourism, Praxoula Antoniadou Kyriacou to the Limassol Economic Forum Energy Panel Discussion

It is with pleasure that I participate today in the discussion on Energy within the framework of the 2nd Limassol Economic Forum, and I would like to congratulate the organizers for their initiative, as well as to express my appreciation for the panelists and participants.

Ladies and Gentlemen,

Energy is a major consideration in decision making world wide and policy decisions should aim at improving future prospects both in terms of economic and social development as well as in terms of establishing and strengthening peaceful relations.

Cyprus has so far been an energy island, in terms of the lack of energy interconnections with Europe or its other neighbours. Furthermore, Cyprus has till recently been almost totally dependent on imports of oil which burden the current account balance, the level of CO2 emissions and very often the rate of inflation.

As part of its medium term planning and in response to EU wide policies to support sustainable development, Cyprus has planned and is implementing a National Action Plan for the gradual increase of the contribution of Renewables to the energy balance, aiming at reaching a target of 13% percent by 2020.

At the same time, it has started to plan and to act in the direction of introducing natural gas as a source of energy in the production of electricity and else wise.

In the meantime, Cyprus was confronted with a sudden energy crisis last summer, when an explosion near the main electricity power station (at Vassilikos) caused extensive damages to the station which was covering 60% of the total electricity production of the country.

Nevertheless, as a result of the coordinated efforts of all government services, the Regulative Authority, the Administrator and above all thanks to the dedicated efforts of the personnel of the Electricity Authority of Cyprus, sufficiency of electricity supply was restored within one month of the accident with minimal impact on the economy of Cyprus. Medium plans as may be explained by the EAC include the restoration of full capacity in stages, initially by next summer and then within one more year.

Dear participants,

On 18th September, Cyprus began exploration drilling in site 12, in its exclusive economic zone with reference to hydrocarbons. Noble Energy which is conducting the exploration drilling expects to have some first indications of the possible existence of hydrocarbon reserves within 73 days of the commencement of drilling, i.e., roughly by beginning-middle of December.

To the extent that the first indications are positive, two appraisal wells will then be drilled to establish the size of the reserve. This may take 6-8 more months. In the meantime the Government of the Republic is now in the process of examining the next steps needed to be taken, both with reference to the way that reserves will be exploited once they are found as well as with reference to the 2nd round of licensing concerning the other sites in the exclusive economic zone of Cyprus.

To the extent that hydrocarbon reserves are identified in the exclusive economic zone of Cyprus, then new, wide and bright prospects open for both the current and future generations of Cypriots. At the same time, Cyprus will be in a position to contribute to the energy security of Europe through the provision of additional sources of energy and through its possible participation in new energy infrastructure linking Europe to sources of energy.

Dear participants,

The government of Cyprus is proceeding to exploratory drilling on the basis of the respect of the whole international community to its sovereignty rights, as these also arise from the UN convention on the Law of the Sea.

With regard to the benefits that will accrue once hydrocarbons are identified and exploited, I would like to reiterate the words of President Christofias in his televised address of 13th September, where he emphasized that the Turkish Cypriots are citizens of the Republic of Cyprus and as such they can enjoy within the framework of a reunited homeland the benefits of any natural wealth that Cyprus has.

The President stated that in the context of the Bicommunal negotiations for the solution of the Cyprus problem, it has been agreed that the issues of exploitation of the natural wealth of Cyprus belong to the federal government which will allocate revenues through the budget to the two constituent units. It is obvious, President Christofias stated, that the exploitation of any possible natural gas reserves in the exclusive economic zone of Cyprus can potentially motivate the attainment of a solution to the Cyprus problem soon, so that all the Cypriot people, Greek Cypriots and Turkish Cypriots, can benefit from any positive development (with reference to the hydrocarbon explorations).

Furthermore, on his way to the United Nations General Assembly, President Christofias reiterated the above and added that Turkey has a lot to benefit from the solution of the Cyprus problem, since the solution will lead to the normalization of relations with Turkey, to cooperation between the two countries and to the conclusion of agreements between the two in various areas, including in the energy sector.

Turkey, dear participants, now has a golden opportunity to prove itself to be a true peacemaker in the area of the Eastern Mediterranean, by respecting the sovereignty rights of all EU member states, through both words and actions; and by truly contributing to the success of the peace process with reference to Cyprus through the encouragement of the Turkish Cypriot leadership to work for an agreed solution of the Cyprus problem that will be reunifying Cyprus on the basis of the commonly agreed basis of a bizonal, bicommunal Federation with political equality as this is defined in relevant UN resolutions.

A bright horizon of peace, cooperation and economic growth will then open for the area of the Eastern Mediterranean to the benefit not only of the countries and peoples of the area but also to the benefit of our wider European family.