The East Mediterranean offers wonderful opportunities for investors, who will now have the opportunity to assist Cyprus in developing its newly discovered energy resources. Not only will the gas fields be a huge windfall for Cyprus, but international investors can also profit from assisting Cyprus develop its energy resources. As the Levantine basin has emerged as a main source of hydrocarbon, many companies are seeking novel business opportunities.
Whilst Cyprus has certainly suffered some of the effects of the global financial crisis, the recent discovery of offshore gas brings real prospects for increased prosperity, with the attraction of foreign investors and the stimulation of the economy. All these attractions will require legal professionals to be on hand to advise investors. Whilst the construction of a liquefied natural gas plant and exportation plans will take time to implement, the next decade can expect to see the prospering of the Cypriot economy and massive investment in the nation’s infrastructure. Reports have also revealed that the amount of offshore hydrocarbon which can be explored is equivalent to the energy needs of the entirety of Europe for the next thirty years. This is fantastic news for Cyprus, as the region will become a key player in the global energy markets, sitting right at the heart of the trade in global gas, and all the investment and industry that accompanies it.
Investment: A stake in the prosperity of Cyprus
The Cypriot gas industry is still in the very early stages, and this is an added lure for investors who can purchase a stake in the future prosperity of Cyprus. The unearthing of gas in the Levantine basin is perhaps the world’s largest offshore gas discovery of the past decade, and it is possible that more deepwater gas may be unearthed in this beautiful region. These latest opportunities have huge potential for both exploration and exports, which is another fantastic opportunity for investors.
As well as the advances in gas exploration, there are new challenges and regulations which will need to be adhered to and overcome in a number of key areas. As well as general investment prospects, there will be opportunities for infrastructure construction, and collaboration on licensing. A key role will need to be played by technology companies, and the necessity of concentrating on the building of international relations and collaboration must not be underestimated. In addition to investment, companies must consider the purchase of professional indemnity from leading international providers. In the European markets, the European Union oversees the regulations where it is deemed necessary to consider the matter of risk allocation in offshore gas exploration and exportation, as regards indemnity, exclusion, and limitation of liability. The European Union recognises the importance of the availability of natural gas at a time where consumer appetite for gas is rising, so that the internal European market for gas must grow. It is therefore legislating to ensure a reliable and secure market.
Act quickly to ensure benefits
These rapid changes in Cyprus demand quick thinking and fast decisions from investors if they are eager to reap the benefits of this fledgling gas industry. The discovery of gas in Cyprus is a wonderful opportunity for international investors and those who intend to profit must know how to turn these challenges to their advantage.
The Government of Cyprus is intent on making the nation as attractive to foreign investors as possible, and work has already begun on the natural gas pipeline network, which will ensure an uninterrupted supply of natural gas. Significant funding for the pipeline network has been received from the EU funds under the European Economic Program for Recovery. Investors in Cyprus can also relax in the knowledge that the national legislation of Cyprus for the natural gas market is fully harmonized with the European Directive 2009/73/EC concerning the common rules for the internal natural gas market.
Source: Melissa Ravenscroft
Date: 12/11/2013
