Cyprus: Offshore gas find gets investor interest

NICOSIA, Cyprus — A field off Cyprus where U.S. firm Noble Energy is conducting exploratory drilling holds an estimated 5-8 trillion cubic feet of natural gas, a significant find for the small island, the country’s president announced today.

Dimitris Christofias said the offshore discovery puts Cyprus on Europe’s energy map and is attracting the interest of many foreign investors. But it could also risk heightening tensions with rival Turkey, which doesn’t recognize Cyprus as a sovereign state.

It’s the first time the size of the deposit has been estimated based on actual drilling results. The site is some 115 miles south of the east Mediterranean island near a huge Israeli gas field estimated at 17 trillion cubic feet.

Officials have said that a trillion cubic feet of gas could meet the island’s energy needs for three decades.

Cyprus was split into an internationally recognized Greek Cypriot south and a breakaway Turkish Cypriot north since 1974 when Turkey invaded after an abortive coup by supporters of a union with Greece.

Turkey opposes any energy search by Greek Cypriots on grounds that it could undermine the rights of Turkish Cypriots to oil and gas wealth.

Greek Cypriots, however, contend that the gas could act as an incentive to speed up a peace accord, benefiting both Turkish Cypriots and Turkey.

Under strain from Europe’s financial crisis, Cyprus officials see the gas find as a potential boost to the island’s $23.5 billion economy, which is forecast to grow by a meager 0.2 percent of gross domestic product next year.

Christofias said a new licensing round for more exploratory drilling off the island’s south coast will be launched soon.