NICOSIA — The government has started the process to set up a national hydrocarbons fund, Commerce Minister Neoklis Sylikiotis announced here today, in his address at an international symposium on “Gas and Oil Energy”, co-organised by the European University Cyprus and the Chernomyrdin Moscow State Open University.

In his address, read by a Ministry senior official, Sylikiotis said the fund, to be established by law, will aim at creating conditions of equality and prosperity for the present and future generations of Cyprus.

Part of the fund’s shares will be directed towards the hydrocarbons’ industry, another part will go to the state budget, and a third part will be kept for the benefit of future generations, the Minister noted.

He also said that the government has decided on the members of the government team to negotiate with “Noble Energy”, the company licensed to drill in block 12 of Cyprus’ Exclusive Economic Zone.

The mandate of the team, he went on, will be to conclude a series of agreements with “Noble”, in order to proceed with the domestic use and commercial utilization of local natural gas reserves the soonest.

Houston-based “Noble Energy”, with a concession to explore for hydrocarbons in an offshore field, south of Cyprus, known as Block 12, estimates gas reserves at 5 to 8 trillion cubic feet. Block 12 field borders reserve-rich ‘Leviathan’ in Israel’s EEZ.

Sylikiotis expressed confidence that an agreement will be concluded soon with companies, in the framework of the second licensing round in the EEZ of the Republic of Cyprus.

The government reached an initial agreement to grant licenses for 4 EEZ blocks in Cyprus’ EEZ, including ENI/Kogas joint venture for block 2 and 3, Total/Novatek/GPB joint venture for block 9 and Total for block 11. Negotiations are expected to conclude within 2013.

Sylikiotis said moreover that comprehensive tenders are being currently evaluated for the construction of the oil storage terminal at Vassiliko, on the southern coast, and negotiations are expected to start soon.

He added that the government decided to proceed with the necessary procedures for the creation of a Natural Gas Terminal at Vassiliko, by 2019, adding that the project attracts strong investors’ interest.

The Southern Mediterranean area can be turned into an area of common interest, Sylikiotis said, and he concluded by saying that Cyprus can be a bridge of peace and cooperation between Europe and the Middle East.

Cyprus has signed an agreement to delineate the Exclusive Economic Zone with Egypt and Israel with a view to exploit any possible natural gas and oil reserves in its EEZ. A similar agreement has been signed with Lebanon but the Lebanese Parliament has not yet ratified it.

Published by: www.incyprus.com.cy