Following a tumultuous few years of political and economic upheaval, the small European nation of Cyprus has suddenly found itself the subject of more official U.S. interest than it has seen in 50 years. In addition to visits from James Townsend, the assistant undersecretary of Defence for Europe and NATO issues and Amanda Sloat, the assistant US Undersecretary of State for European Affairs this month, the capital welcomed Vice President Joe Biden, the highest ranking U.S. official to arrive in five decades.
“I wanted to come to primarily underscore the value the United States attaches to our growing cooperation with the republic of Cyprus,” Biden said shortly after arriving in May, according to a Guardian report. “This relationship is now a genuine strategic partnershipwhich holds great promise.”
Although the visits have focused on everything from security cooperation to reunification with the island’s Turkish held northeast, the diplomatic push appears rooted in the issue of energy security and regional unity – two issues that are increasingly aligned.
Since a 2011 discovery, Cyprus has sought to establish itself as an energy hub in the region, joining new industry actors like Israel in promoting the potential of the Eastern Mediterranean’s new-found offshore reserves. However, progress has been slow, as the country’s weakened economic standing has made it difficult to nail down the financing needed to pursue exploration, production and export options. Although Cyprus currently lays claim to an estimated 50 to 60 trillion cubic feet of gas and 1.7 billion barrels of crude in waters off its southeastern coast, the country faces substantial financial challenges associated with export options, such as pipeline projects or possible Liquified Natural Gas plants.
For Washington, helping Cyprus overcome those financial challenges, as well as political disputes with Turkey could not only help put the small country on its way towards energy independence and growth, but also provide a viable alternative to Russian natural gas. Easing dependence on Russian gas reserves has long been a goal of Washington and Brussels, but has become especially pressing since the suspension of gas exports through Ukraine in 2009, resulting in winter shortages across Eastern Europe. Russia’s recent expansion into Crimea again cast a spotlight on the need for Europe to seek out viable alternatives.
While Washington’s focus on Cyprus is a welcome vote of confidence for Nicosia and the country’s current leadership, it is likely driven more by regional, not local potential. Rather than just offering an energy option for both Cyprus and possibly a broader European market, the country’s offshore claims could provide a catalyst for change for a number of long-standing regional challenges.
“The U.S. saw an opportunity to solve a number of issues,” said George Pamporides, a Nicosia-based attorney and author of the book,The Hydrocarbons of the Republic of Cyprus. “By encouraging Cyprus to pursue (exploration and production), they push Turkey to view new gas sources from Cyprus and Israel instead of more expensive imports from Russia.”
In addition to providing a domestic source of energy and revenue, a successful Cypriot gas operation could also be seen by Washington as a viable component of a broader Eastern Mediterranean energy alternative for European consumers and force for regional cohesion. Specifically, natural gas potential has been mentioned in discussions related to reunification talks between Nicosia and the Turkish-held northeast part of Cyprus, which has remained separate since 1974.
“Hydrocarbon reservoirs are not bounded by political boundaries, therefore it is important that the countries in the region need to work together to use these transboundary resources in a cooperative manner instead of fueling confrontations,” Amos J. Hochstein, deputy undersecretary for energy diplomacy at the U.S. State Department, told the Greek newspaper Ethnos earlier this month.
Despite bullish rhetoric from Washington and Nicosia, Cyprus gas remains a long-term goal. Earlier this year, Eurasia Group Senior Analyst on Global Energy and Natural Resources Leslie Palti-Guzman laid out a lengthy path for Cypriot gas, beginning with an assurance that offshore reserves actually meet early predictions, followed by a regulatory improvements and then finally nailing down buyers, which could prove difficult with new suppliers like Cyprus. Palti-Guzman suggested that the country’s contribution could be something to consider after 2020.
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