Charles Ellinas Russian interest in Cyprus EEZ and the East Med

Russian interest in Cyprus EEZ and the East Med


The Russian Ambassador to Cyprus Stanislav Osadchiy confirmed in a tv interview on 3 March that there might be Russian oil company interest to participate in the 3rd offshore block licensing round in Cyprus.
 
He said that the recent rounds of cooperation summits between the leaders of East Med countries has rekindled interest. In particular the recent meetings and discussions between Cyprus, Greece and Bulgaria and earlier between Cyprus, Greece and Egypt raised Russian interest in the region.
 
There have already been sounding meetings with Cyprus government and the response was positive. 
 
Russian companies Gazprombank and Novatec parrticipated in the previous round. Novatec was actually shortlisted with Total for block 9, before Total opted for blocks 10 and 11. It is understood that Novatec may be one of the companies showing new interest. Lukoil is already operating in Cyprus with a chain of petrol stations.
 
The timing of the 3rd licensing round is not clear yet, but having announced it last month the Energy Ministry is in the process of preparing the relevant documentation. Apparently the detailed re-evaluation of the seismic data from Cyprus EEZ based on the ‘Zohr model’ is still expected from the Ministry’s consultants BEICIP.
 
Russian interest in East Med hydrocarbons may be wider than just Cyprus. Adding another twist to a complex situation is an article last week by Reuters that in response to a request by Russian President Putin in October last year, Israel should consider bringing-in Gazprom to develop Leviathan. This would be controversial but the article states that it could enhance Israel’s security and strengthen its broader geopolitical position.
 
That Russia wants-in on Israel’s gas is not new. Over the past four years Russia has made several attempts to enter Israel’s gas market. In 2012 Gazprom bid for 30 per cent share of Leviathan, but lost out to Woodside and in 2013 it signed a deal to market LNG from Tamar but the project did not proceed. Russia may prefer that Israel’s gas does not compete with Gazprom, not only for sales to Europe but also to Turkey.
 
Dr Charles Ellinas 
 
Nonresident Senior Fellow – Eurasian Energy Futures Initiative - Atlantic Council

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