Cyprus and Norway prepare to sign energy MoU - KATHIMERINI

Norwegian Foreign Minister Ine Marie Eriksen Soreide with her Cypriot
counterpart Nicos Christodoulides (PIO)

21 FEBRUARY 2020 - 16:43

Cyprus and Norway began preparations on Friday to sign a Memorandum of Understanding (MoU) on energy issues, that will contain provisions for the exchange of expertise in relation to the national hydrocarbon fund (sovereign fund), among other things.

According to the Cyprus News Agency, the MoU under discussion contains five components, concerning LNG bunkering, LNG legislation, and cross border interconnection for natural gas and electricity. Other provisions include Renewable Energy Sources and sovereign fund management.

The MoU will be signed at Ministerial level once the relevant preparation work is completed.

Diplomatic sources said Oslo recently discouraged a Norwegian energy company form entering into cooperation with TPAO, the Turkish Petroleum Corporation.

After it was approached by TPAO to cooperate over drilling issues, the company contacted Norway’s Foreign Ministry, which in turn appeared negative to the prospect of the two companies cooperating.

Cyprus could create a leaky hydrocarbons wealth fund - FINANCIAL MIRROR

As of 30 June 2018

24 February, 2019

A long-delayed bill creating a Cyprus hydrocarbons fund will be put to parliament for a vote, with the aim of utilising profits from natural gas for future generations to enjoy but there are fears the cash cow will be abused.

The government submitted the bill in 2015 but it got shelved as it fell victim to politics and confrontation between the parties.

While a general consensus was built amongst political parties that natural gas revenues should be set aside for future generations through the creation of the Hydrocarbons Fund, economists and some MPs have expressed fears that it will become a “fiscal hole filler”.

A University of Cyprus professor and energy policy expert said that while MPs are ready to vote in the bill, extra powers will be given to the Finance Minister and loopholes introduced.

“My fear is that we may see the Hydrocarbons Fund having the same fate as the Social Insurance Fund reserves which have been spent through the state budget,” said UCY professor Constantinos Papaloucas.