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Address of Ambassador T. S Shambos to the 2nd Annual International Oil and Gas Conference and Exhibition in Israel – 17-19 November 2015


Honored guests,
Ladies and gentlemen,

It is a distinct honor and a privilege to be addressing the 2nd Universal Oil and Gas conference here in Tel Aviv.

I felt it was important to take this opportunity and say some words on Cyprus’ vision on regional energy cooperation which as you know goes very much hand in hand with the vision of Israel.
When Prime Minister Netanyahu, visited Cyprus in July, he said that Cyprus and Israel are blessed with ‘manna’, not from the sky but in our sea. He was referring to the hydrocarbon resources that have been discovered in the Eastern Mediterranean, the sea that has connected Cyprus and Israel over the centuries. From the same podium just two days ago Minister Steinitz also made reference to the very close and sound coordination between CY and Israel on our shared vision as regards the collective energy potential of the Eastern Mediterranean.

Ambassador Shambos with the Italian Ambassador Francesco Maria Talo
And this is a fact. The discovery of hydrocarbons has created an unprecedented impetus in our relationship and has undoubtedly opened new horizons both in our bilateral and regional cooperation. This translates into much needed energy security, diversification, and exports for both countries.

Under this light the strategic importance of energy cooperation between Cyprus and Israel is also of particular importance to the United States and Europe, mainly in offering an alternative energy corridor route for the EU.

Geographically, Cyprus has the privilege of being at a crucial crossing point between Europe, Asia and Africa, as well as an EU member state at its South-Eastern most corner. Given our strategic know-how of the region, as well as the very good relations we enjoy with all neighbouring countries, CY is in a unique position to promote and facilitate the multilateral cooperation required in order to fully enjoy the benefits of the Eastern Mediterranean’s hydrocarbons wealth.

At present, Cyprus’ energy strategy is focused on three main pillars: In the shorter term, we would like to attract investment in the entire value chain of the oil & Gas industry. In the medium-term, we are working on ensuring revenues from the sale contracts related to hydrocarbons. And in the longer term, we aspire to create a knowledge-based Oil & Gas sector.

Undeniably, the substantial amounts of hydrocarbon resources discovered offshore Israel and Cyprus prove that the Mediterranean region can act as a key supplier and route with regards to the EU’s needs in natural gas.

As a result of the first exploratory well, drilled by Noble Energy, “Aphrodite” a significant natural gas discovery of 5 to 8 trillion cubic feet, in Block 12 was announced in December 2011. Further to the appraisal process and the latest independent resource assessment update of the “Aphrodite” discovery, the gross mean natural gas resources is estimated at 4.5 trillion cubic feet. “Aphrodite” has been declared a commercial field, which confirms the existence of substantial recoverable natural gas resources in exploration Block 12 of Cyprus’ EEZ. Cyprus is currently in the process of discussing with the Block 12 Licensees, the development and monetization of the “Aphrodite” field.

We cannot emphasize strongly enough the significance of the development of the Aphrodite field as it would be the very first time that Cyprus is moving from the exploration to the exploitation phase of its natural resources.
This is an important step towards the monetization of the country’s indigenous natural gas resources, both for domestic electricity generation and other uses, as well as exports via direct subsea pipelines to neighboring countries with which the Republic of Cyprus maintains excellent bilateral relations. At the same time, the huge recent discovery of the Zohr natural gas field in the Exclusive Economic Zone of Egypt enhances the prospects for further synergies in the region. This discovery is excellent news for Egypt and for our neighborhood as a whole. It is a proof of the potential of our region and the role that it can play in Europe’s energy security and in the international gas market.

May I also recall that the EU's recent Energy Union strategy has identified the Mediterranean as a strategic priority and has set the objective of boosting the energy partnership with the Southern and Eastern Mediterranean countries – inter alia by exploring the potential for more gas imports from the Mediterranean and the development of a Mediterranean gas hub – as an option for reducing EU dependency on particular fuels, energy suppliers and routes.

Having said this the geopolitical realities in the Eastern Mediterranean make it imperative for countries with traditionally an excellent track record of bilateral relations such as CY and IL to further strengthen their relations, through cooperation in the hydrocarbons sector. And this is exactly what we are doing.

There are currently upstream activities in Cyprus, Egypt and Israel. The Aphrodite, Leviathan, and Zohr natural gas discoveries have demonstrated that the Eastern Med can play a role on the European and international oil and gas market. The challenge now faced is that our countries need to expedite the plans of development of such discoveries and to secure as soon as possible buyers for gas through commercial agreements.

Here is the big picture vision: The discovery and production of hydrocarbons and a variety of natural gas transportation projects, in the Eastern Mediterranean, will serve as a means to potentially strengthen regional energy security and attract foreign investment which will lead to job creation; this could serve as a boost to the economies of the countries in the region. In addition, it would contribute to peace and stability, to the benefit all the States in the region, and of the EU at large, much like the precedent of Coal and Steel in Europe that led to the evolution of the EU.

Let me footnote that a pre- requisite for cooperation in the hydrocarbons sector, is the acknowledgement, recognition and respect by all the countries in the region, of the existence and exercise of rights and jurisdiction of their neighbours in the maritime areas where each coastal State has sovereignty or sovereign rights and jurisdiction, in accordance with applicable international law. This goes without saying.

Natural gas pipelines prove to have the potential to play an increasingly important role in facilitating bilateral and regional energy security and connecting the Eastern Med with other neighbouring areas (such as continental Europe and North Africa). In this context, Cyprus is in talks with Cairo for a direct subsea pipeline transferring gas from the Aphrodite natural gas field to Egypt.

Ladies and Gentlemen,

We have no doubt that in cooperation and coordination with Israel the development of the gas industry in the Eastern Mediterranean region, not only has the potential to fulfil regional demand, but also to impact European and Middle Eastern gas markets.
Cooperation in the hydrocarbons sector can feed into the bilateral political relations between the Eastern Mediterranean countries, hence building the foundations for regional stability and peace in an area in which peripheral cooperation is an expensive commodity.

The necessity for energy partnerships is an exercise of confidence building and one of trust creating. And this is of tremendous strategic value in our neighborhood. Energy synergies can ease tensions, and resolve conflict by establishing mutually beneficial channels of political communication in order to cooperate in the energy sector.

Under this light regional cooperation is instrumental to the creation of a stable and peaceful environment in the Eastern Mediterranean We are glad to note that our neighbors such as Israel are responsive to our calls and so are we to theirs. Τhe trilateral meetings at Ministerial level on energy matters are an example of the materialization of this joint regional vision.

Let me end by saying the obvious: As Cyprus we are determined to continue working with Israel and all the partners that share the same goal, consistently and steadfastly, to the benefit of a transformed Eastern Mediterranean region.

Thank you all for your kind attention

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